6 Factors Driving the Massive Growth of Music Festivals.key

6 Factors Driving the Massive Growth of Music Festivals
Understanding the data behind the record expansion
and its impact on fans, musicians and local economies
Attending a multi-day music festival has become almost a rite of passage for the Millennial
generation. There are currently more than 800 music festivals in the U.S. alone. Aggressive
pricing, a huge lineup of top performers, diversity in music genres, social media buzz and an
abundance of cheap rentals on sites like airbnb are all contributing to the huge swell in
festivals.
In 2014, a staggering 32 million people attended at least one music festival according to
Nielsen Music. Half of them (14.7 million) were Millennials, the most sought-after target
demographic for sponsors (which explains the big-budget sponsorships at festivals). Nielsen
Music also reported that the average festival attendee traveled 903 miles to attend a
festival. Even if you consider that many fans fly to festivals, that’s a huge distance to travel
for live music.
Major festivals like Coachella and Lollapalooza regularly sell out within hours of launching
ticket sales. Last year, three-day passes to Lollapalooza sold out within one hour! But it’s not
just the fans that love these events. Increasingly, musicians are choosing the festival circuit
over touring on their own. Even popular bands like Modest Mouse and the Arctic Monkeys
play at multiple festivals a year and claim to love it.
After a decade of consistent growth in the music festival business, many cities are more than
happy to host one. The local economies of the host cities benefit greatly as they are infused
with millions of dollars in additional tourism-related revenue. Fans come for the music and
the unique experience, and sponsors and advertisers love that they have a truly captive
audience, not just for a few minutes but for multiple days. Which is why so many brands are
willing to pay megabucks to sponsor them in multiple ways.
Here are the top 6 reasons that music festivals are growing exponentially:
“The five biggest festivals combined grossed more than $183
million in ticket sales in 2014.”
1. There’s Big Money in the Music Festival Business
While this may sound obvious, the numbers are truly staggering. Multi-day music festivals in
North America have gone from a handful to hundreds. As music festivals have gone
mainstream, they’re reporting hundreds of millions of dollars in ticket sales and sponsorship
revenue. The five biggest festivals combined grossed more than $183 million in ticket sales
in 2014 not including sponsorships or merchandise, food and alcohol sales. Coachella
grossed a record-breaking $78 million over just two weekends in 2014. Austin City Limits
(ACL) made $38 million, Lollapalooza made $29 million, the Outside Lands Festival in San
Francisco grossed $19 million and the Electric Daisy Carnival Festival in New Jersey made
$7.2 million. More recently, the Stagecoach Country Festival in Southern California reported
$18.5 million in revenue earlier this year.
2. Millennials Are Driving Attendance At Music Festivals
The rise of the collaborative economy has established that Millennials value experiences
much more than owning things, and that they care deeply about sharable, personalized
experiences. Music festivals are a perfect example of everything they love. Friends, music,
alcohol, unique and curated experiences, a community of fans, a break from their hectic
lives in the city, highly-sharable moments and contributing to lesser-known musicians and
local economies. Plus, festivals have totally redefined how we experience music. Fans can
sample hundreds of bands and artists in a few days, giving them a chance to truly explore
new artists and genres.
While some experts predict that the growth of festivals may have reached saturation point,
event organizers and band managers believe that there’s actually room for even more
growth, and that the festival industry is just starting to come into its own. There are definitely
examples of festivals that have failed, like Bamboozle in New Jersey and Kanrocksas in
Kansas City, but these are considered exceptions.
3. Bands Make More Money From Festivals Than Tours
Many less-known bands are making more money playing festivals than clubs and small
venues. For these bands, being discovered and loved by the audience at a festival — and
the resulting social media buzz — can take their success to the next level. In today's festivalcrazed world, many artists credit festivals for helping them find new fans, create more
awareness of their music and even sign record deals.
LEARN MORE ABOUT UMBEL
A 2014 Rolling Stone article on the economics of music festivals stated that American hiphop duo OutKast made $60 million from playing 40 music festivals that year. But it’s not just
about the money. A lot of musicians like playing at open, pastoral venues and parks and
often have deeper connections with host cities. Also, an event’s reputation, and
endorsements from other musicians help bands choose the festivals they play at.
Some festivals insist that bands sign a "radius clause," which prevents them from performing
within a specific geographic radius (e.g. 100 miles) and time range (e.g. 3-6 months before
and after the festival dates). Though this restriction can complicate the booking process and
tour dates for bands, many of them are still willing to sign the “radius clause.”
Sponsors and advertisers are willing to spend millions of dollars to
target what they know is a truly captive audience, for a whole
weekend.
4. Music Festivals Are a Great Bargain for Many Fans
At most of the top festivals, a 3-day pass costs anywhere from $185 - $450 which includes
access to hundreds of concerts and multiple event stages. Considering what it costs to just
see one popular artist live in cities like New York and Chicago, these 3-day passes are
bargain for many fans. The sheer number and calibre of performances one can experience
at festivals helps fans justify the cost of not just the tickets, but also travel, food and lodging.
Plus, this way they only need to go to one major festival a year instead of multiple smaller
events.
LEARN MORE ABOUT UMBEL
5. Social Media Buzz Attracts More Visitors
During music festivals, fans flood their social media feeds with photos, videos and posts
highlighting festival fashion, top performances and more. In just the first weekend of
Coachella 2015, fans posted more than 3.5 million tweets. More than 1 millions tweets were
sent during SXSW 2015. A 2014 Eventbrite study found that 75% of the social conversations
about music festivals are created by fans in the 17-34 age group. The study also found that
23% of these posts were made by fans who weren't even at the events but were watching
remotely via live streams on YouTube, TV etc.
Festivals have bigger
audiences which means
more publicity and social
media buzz, with thousands
of fans constantly posting
selfies, photos and videos
of bands on Instagram,
Facebook, SnapChats and
other popular sites. Fans
willingly share information
highlighting how much fun
they’re having for friends
and family back home to
see, and the online buzz
helps drive up ticket sales.
There are of course
obnoxious side-effects of
living in a connected world:
people constantly blocking
your view of the stage with
their cellphones, a common
sight at most festivals.
The U.S. festivals that
created the most social
buzz in 2014 were Electric
Daisy Carnival and
Coachella, both West Coast
events. The content from
both events combined was
shared more than 700,000
times and it’s hard to tell
how many millions of
people saw it.
Infographic credit: ShareThis and PartyBody
LEARN MORE ABOUT UMBEL
But the social media conversation about festivals isn’t just during the events. It starts months
ahead when organizers announce their lineup, ticket sale dates, contests, discounts,
transportation and weather info etc. All this social buzz really helps inspire others to also buy
tickets and attend these festivals, and it doesn’t cost the organizers anything.
6. Sponsors are Paying Millions to Brand Festivals
Today, the popular festivals are able to sell out just hours after they start selling tickets.
Sponsors and advertisers are willing to spend millions of dollars to target what they know is
a truly captive audience, for a whole weekend. Music festival sponsorship spending has
been growing exponentially over the last couple of years. According to IEG, LLC, North
American-based companies spent more than $1.5 billion sponsoring music venues, festivals
and tours in 2014, a 4.4% increase from 2013. The biggest sponsor, beer-manufacturer
Anheuser-Busch, is partnered with 31% of U.S. music festivals followed by Pepsico, CocaCola, Heineken and Red Bull.
Here is a pretty great infographic that covers the music festival landscape and a beautiful
infographic from Billboard that captures some surprising statistics about U.S. music festivals.
What’s clear is that music festivals have hit mainstream and are here to stay for the next few
years at least. Which festivals survive and which ones don’t will depend heavily on whether
they can create unique experiences and snag the best artists to differentiate themselves
from their competitors. On the flip side, the recent TomorrowWorld fiasco has plenty of
lessons for music festival organizers about what not to do.
Photo credits: Fotor, Redfishingboat (Mick O) / photo on flickr
LEARN MORE ABOUT UMBEL
ABOUT US
Umbel is a tool that helps organizations use data to
understand audiences, sell out events, expand fan
bases and identify the most valuable consumers.
LEARN MORE
HERE’S HOW IT WORKS
We make data make sense (and cents).
Umbel connects your constituent data across systems — everything from email to CRM to
customer data and more. Umbel’s data collection tool also enables you to acquire new
customers in just days. Umbel's brand affinity data can also create highly customized
programming for existing constituents, in addition to finding strategic sponsorships. You can
query your data based on demographics, brand affinities and lifetime value to run targeted
and personalized campaigns yielding higher conversion rates and increased ROI.