Festival Economics

2009 Boston Folk Festival canceled


Keywords: Array, boston folk festival, Festival Economics
By Notlob Music

The Boston Globe cites lack of "corporate sponsors" as a cause, but as one who has been close to the festival for the past seven years, as well as in tune with WUMB's format changes (from roots and folk to AAA), I suspect other factors are at work.

For the last few years the festival has been on the decline, shrinking from two days to one, creating an unfriendly "us and them" vibe by catering to "VIP's" with private concerts and providing high backed chairs down front, eliminating the dance stage two years ago and the workshop and busker stages last year), a scarcity of vendors, running the main stage as a workshop stage, and following the Duncan Donuts Festival's lead by headlining country and pop artists in place of folk artists.

News of the Boston Folk Festival's demise reached me via Google alert at 2:12am that "hit" this Boston Globe gossip column story.
 Read more »


Lefsetz' season pass


Keywords: Array, Bob Lefsetz, Festival Economics, season pass, tickets

Given the state of the economy, live music promoters are scrambling to figure out a way to get people out to concerts and music festivals without attendees having to spend a small fortune for tickets or to travel long distances. What better way to get people seeing music on the cheap than by venues offering season passes? In a recent edition of the Lefsetz Letter, seasoned music industry expert Bob Lefsetz posted an article supporting the idea about how to get more people out to more shows using the season pass. Coming from the perspective of an income driven music lover, Lefsetz describes the current live music event as more of a special occasion for most people than a regular occurrence—something it should be. In order to make the transition from special occasion to regular occurrence, season passes need to be offered by venues, which will get more people out to shows more often, making the venues more money:  Read more »


Fests try ticket promotions to nab holiday shoppers


Keywords: Array, Bonnaroo, Bumbershoot, Festival Economics, ticket promotions

Even some of the biggest festivals are getting creative to meet their ticket sales goals, especially with the early-bird and holiday shopping season in full swing.

For the first time, Bonnaroo is offering a payment plan option for ticket purchases. The Bonnaroo box office opens for business December 4.  Early bird pricing is in effect for general admission at $210 and VIP for $1350. With the payment plan, buyers may space out their payments over five months.

Seattle's big Labor Day weekend culturefest Bumbershoot offers a deep holiday discount for members of its Bumberfan Club community—just $60 for a three-day pass.

   Read more »


City festivals most vulnerable for cutbacks


Keywords: Array, Festival Economics, festival industry
Economy Watch
By Dan Ruby

The cancellation of a regional festival franchise in Riviera Beach FL and cutbacks by the City of Chicago at its several festivals suggest that city-managed festivals may be the first festival sector to be impacted by the recession. Of course, every festival producer is operating in a new economic environment, but most long-running events will be staged as usual in 2009. Smart producers are tightening their belts, expecting that attendance will be down, and hoping it's a one-year phenomenon.

Some of the nation's top festivals are city run—in some cases wholy produced by the city's department of cultural affairs (or some such) or produced in partnership with a non-profit festival organization. Cities may produce festivals as an expression of civic pride, to promote tourism and economic activity, or for other reasons. Successful events reach a point of sustainability where the funding necessary is negligible or even cash-flow positive.  Read more »


Ted Lehmann: Some thoughts on the bluegrass festival market


Keywords: Array, Festival Economics, festival industry

Ted Lehmann attended 26 music festivals in 2008—mostly bluegrass but some with a broader mission. His thoughts on the state of the market concludes with this observation:

Festivals, in order to succeed, need to reach out to a wider and more diverse audience. Varying the kinds of music, even within the label bluegrass, will help to create a more welcoming and interesting environment. Reaching out to a younger and more culturally diverse audience will increase the size and enthusiasm of audiences. Establishing clear guidelines for audiences in terms of smoking, drinking, dancing, and other behaviors and then ENFORCING them will pay off big time. Much of the festival environment is still attractive and will continue to entertain a wide variety of visitors. Camping, field picking, visiting with old friends, a range of vendors, exciting music, and a festive atmosphere all yield a good time. Thoughtful promoters will find ways to continue the traditional elements making up successful festivals while attracting new audiences through creatively altering their programs and formats.  Read more »


Why festivals will survive the coming recession


Keywords: Array, Attendance, Festival Economics, festival industry, Festival Lifestyle
Analysis
By Dan Ruby

I recently provided answers to some survey questions from a college student about the economics of the live music industry, which gave me a chance to write down some of my thoughts about the underlying appeal of festivals and the likely impacts of the economic downturn on the festival market. It struck me that some of those answers would be interesting to also post to the site. Comments are welcome.

What is it about festivals that intrigues you?

I believe that as our lives become more isolated and mediated by technology, we are seeking out immersive experiences that connect us with "live" communities and give us a sense of participation in a technicolor, multi-sensory world. Festivals are uniquely suited to providing this kind of experience in a contained weekend-long break from our otherwise humdrum, cubicled existence.  Read more »


Part 4: Festival Economics


Keywords: Array, Festival Economics, festival industry

By Dan Ruby

So as we head towards high festival season, we can already mark down 2008 as a year of frenetic festival launches. Whether it also pans out as a year of boffo festival attendance remains to be seen.

The launch activity certainly suggests that major producers think the market remains ripe for development. And there are reasons that the festival business might continue to do well this year despite an economic downturn.

Even with rising ticket and travel costs, festival attendance remains an affordable luxury when bigger ticket items are being trimmed. The fundamental draw of festivals--participating in a live community event--will continue to attract festival patrons seeking opportunities to have a memorable live experience.

My best guess is that total festival attendance will match the industry performance in recent years, but that there won't be the big growth spurt that the production companies seem to be expecting.

Most attendees will substitute attendance at one festival to take a chance on one of the new ones, although some will gladly add one or more new ones to their schedule.

We're still waiting for news about Mile High and possibly others for 2008. The bigger question is how the industry will fair this year and how that could affect each of the new events in 2009 and beyond.


Part 3: Land Rush


Keywords: Array, Festival Economics, festival industry

By Dan Ruby

So consolidation and corporatization is one big explanation for the outbreak of new festival activity. Another is the land rush to lock up key markets and geographies, especially in urban festivals held in big city parks.

This one is slightly counter-intuitive, since the trend in festivals since Woodstock is to put big musical events in rural locations that are within reach of big cities but not right in them. That makes sense because it has been easier for promoters to clear local ordinances when dealing with smaller localities. Also rural festivals can provide camping for attendees while city festivals typically do not.

While big city festivals as civic enterprises are not new--see Bumbershoot, Summerfest and others--big urban rock festivals as for-profit enterprise is a novel phenomenon. Lollapalooza proved that festival model when it transformed its dwindling success as a festival tour into a top-five powerhouse when it sunk stationary roots in Chicago's Grant Park.

The success of Austin City Limits Festival in the Texas captial's Zilker Park, also staged by Lolla producer C3 Presents out of Austin, gave further proof that urban rock fests can be big winners.

So this year we see new festivals in Liberty State Park, a stone's throw from Manhattan, and in San Francisco's Golden Gate Park. The Mile High festival was originally slated for Denver's downtown City Park, but was derailed by community opposition and may now take place in a Denver suburb. As noted, Vineland began as a proposal by C3 Presents for a Lollapalooza type event in Philadelphia's Fairmont Park.

With most of these events, promoters will not be providing any camping facilities, so attendees who would be traveling to the festival need to find other accommodations, greatly increasing the cost of the experience. Already we see some grumbling among fans about the cost of attending All Points West, and the same situation will apply in San Francisco for Outside Lands.

In an increasingly competitive environment and weakening economy, I expect the All Points West and Outside Lands will draw well among area residents but may fail to meet expectations for out of town draw.

In a counter trend, New York-based Festival Network, long-time producer of the Newport Jazz and Folk festivals, is rolling out two or more new festivals this year–all situated in resort destinations. Though full details remain unannounced, the company's event calendar lists Whistler Music & Arts Festival for July 19-20 and Jackson Hole Music & Arts Festival without a date attached. It will also hold a second edition of its 2007 debut of a festival on Martha's Vineyard.

Destination festivals are nothing new in the market. Places like Newport and Telluride are legend in the festival business. Accommodations are obviously pricey in these locations, too, though camping can be an option in some cases.


Part 2: Clash of Titans


Keywords: Array, Festival Economics, festival industry

By Dan Ruby

Every year brings new launches in the festival business, an economic sector known for attracting more than its share of dreamers. But the level of activity this year is unprecedented, with major bets being laid by hard-nosed business players.

Still, considering the slowing U.S. economy, you have to wonder what's really going on here. Is there truly a market for all these new festivals? How can we explain the frenzy in festival launches?

The most obvious factor is the rapid consolidation of the festival market. What was once a fragmented industry, with individual for-profit and non-profit companies owning one or a small number of festival events, is rapidly evolving into a competitive alignment of top-tier festivals controlled by a few producer alliances.

While the festival business was once sheltered from the overall music industry, the growing importance of touring has raised the profile of festivals. For bookers and promoters, festival venues represent a fast-growing slice of the live music market, a recognition of the relative economy of festival versus concert attendance.

I say relative because the cost to the festival attendee is also soaring. At Coachella, fans pay $90 a day or $265 for the weekend for a general admission ticket. VIP tickets come in around $600 for most big-time events.

The two big kahunas in the concert industry, Live Nation and AEG Live, are now slugging it out to own key properties in the festival market. So far, AEG has been getting the better of it.

The company's home-grown festival production unit, Goldenvoice Productions, is responsible for Coachella, Stagecoach, a country music festival launched last year, and the new All Points West.

AEG Live is also partnered with producer Madison House Presents on the other big launch of 2008, Rothbury Music Festival. And it will have another big one if the resituated Mile High Festival comes off as expected.

AEG Live is also partnered with producer Madison House Presents on the other big launch of 2008, Rothbury Music Festival. And it will have another big one if the resituated Mile High Festival comes off as expected.

Live Nation's big play for 2008, Vineland, itself a substitute for an earlier planned Philadelphia festival, failed to come off as planned. It would have been the first U.S. festival for British promoter Melvin Benn, whose Festival Republic company is now majority owned by Live Nation. We'll see how it plays out in 2009.

Live Nation also has a new play in the touring festival market, partnering with the creators of Van's Warped Tour to create The Rockstar Energy Mayhem Festival, which will play in 30 Live Nation amphitheaters across North America this summer.

Among festivals, Live Nation got Sasquatch when it bought House of Blues. There are published reports that the company is seeking to produce an all-new event in Pemberton BC for the western Canada market.

So even though Vineland misfired this year, don't discount Live Nation's designs on the marketplace. Gaining three or four major festival footholds is key to the company's vertical integration strategy, in which it controls booking rights for both venues and artists--something like the old Hollywood studio model where a few single companies owned both product and distribution.

In most cases, one company cannot own it all, so they commonly seek out partnerships with other production companies that bring local connections or genre expertise. Thus we see players such as jam market biggie Madison House Presents teaming with AEG for Rothbury, or San Francisco powerhouse Another Planet Entertainment aligning with Bonnaroo's Superfly for Outer Lands. (Another Planet is the three-year-old startup from key executives of the old Bill Graham Presents formed aft  Read more »


Part 1: Year of the Launch


Keywords: Array, Festival Economics, festival industry

By Dan Ruby

Now that the dust has settled in New Jersey with one new mega rock festival set for August and another one postposed till 2009, this is a good time to review the state of play and try to make sense of the spate of major festival launches in 2008.

So far, the big new events for 2008 are All Points West, a Coachella-style event for the New York market, Rothbury Festival, a Bonnaroo wannabe in western Michigan, both produced by divisions of entertainment conglomerate AEG Live, and Outside Lands, a Bonnaroo offshoot in San Francisco's Golden Gate Park.

The big event in southern New Jersey, Vineland, was announced with great fanfare in November by AEG competitor Live Nation but later postponed. More shoes may drop in the weeks ahead with a Mile HIgh Music & Arts Festival widely expected for July in the Denver area (AEG again) and another probably less likely one near Vancouver in Pemberton BC (Live Nation).

Meanwhile, another festival powerhouse, Festival Network, producer of the Newport festivals and others, plans to roll out a series of new festivals in resort locations, including Whister BC and Jackson Hole WY.

All this activity comes in a market with established players like Bonnaroo, Coachella, Lollapalooza, Virgin and many more. The next tier of festivals contains a dozen or more successful festival brands: Langerado, Wakarusa, High Sierra, Sasquatch, 10,000 Lakes, All Good, Voodoo....the list goes on and on. Many of those are also looking for opportunities to expand, as with High Sierra's brand-new DelFest coming to Maryland in May.

And that is not to mention the more eclectic city festivals that draw huge audiences for top name talent: New Orleans Jazzfest, Bumbershoot in Seattle, Summerfest in Milwaukee and many more.
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Article updates

March 19: AEG Live Rocky Mountain Division announced the first annual Mile High Music Festival, July 19-20 at the outer fields at Dick's Sporting Goods Park. Headliners are Dave Matthews Band, Tom Petty & The Heartbreakers, John Mayer and The Black Crowes with many others also named.

March 13: Based on Billboard's reporting, it appears that Pemberton Music and Arts Fetival is now a sure thing for July 26-29 in Pemberton BC, a co-oprduction of Live Nation Canada and Good Boy Productions, the latter a partnership of Coldplay's and Depeche Mode's business managers. Attached artists include Coldplay, Tom Petty, Nine Inch Nails, Jay-Z, My Morning Jacket, The Tragicaly Hiip, Flaming LIps, Death Cab for Cutie and lots more.


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