American Music Festival Industry: Its Significance and Representation in The Modern World

Today, music festivals are far more popular in America than ever before. There was a time when there were only a handful of music festivals for Americans to attend, but now there are hundreds of festivals each year that cover almost every genre of music. According to Billboard.com, 32 million Americans attend at least one music festival every year. (Lynch, 2015). To put that into perspective, this is more than the population of the state of Texas and slightly less than the population of the state of California. Slightly under half of those who attend at least one music festival every year are millennials, the generation between 17 and 34 years of age, which accounts for 14.7 million of those who attend a music festival each year. “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 US 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 huge swell in festivals” (Reedy, 2015). These are considered to be big time events that are immensely popular with their fans. The biggest music festivals such as Coachella and Lollapalooza generally sell out within a few hours of tickets going on sale, before they even announce their lineups. In 2014, three-day passes sold to Lollapalooza were sold out within an hour of the tickets being put on sale (Reddy, 2015).

The increasing popularity of music festivals has led to a dramatic change in the economic landscape of the festival industry. Music festivals have become big business raking in large sums of money for weekend-long event. “The five biggest festivals combined grossed more than $183 million in ticket sales in 2014 not including sponsorship or merchandise, food and alcohol sales” (Reedy, 2015). The highest revenue producing music festival of that year was Coachella, which grossed a record-breaking $78 million in just two weekends. This was followed by Austin City Limits at $38 million, Lollapalooza at $29 million, and Outside Lands which brought in $19 million (Reedy, 2015). These hugely successful festivals have encouraged many entrants into the market.

The marketing of American music festivals through the internet and social media has been a significant factor in the increase in the popularity of the music festival industry. Furthermore, the increase in fan attendance and revenue being generated from these festivals has led to an increase in the number of music festivals being created; in fact, there has been such a tremendous increase in the number of music festivals that many are wondering whether the American music festival market has become so saturated that it can be compared to a bubble that is about to burst. Notwithstanding this, the instances of corporate sponsorship has become an increasing part of the music festival industry creating more revenue for participants and a bright outlook for the music festival industry. Throughout this paper, I will explore the current state of the music festival sector of the music industry including how it got it to its current state, some of the problems that the industry faces, the potential bubble, and what the future holds for the American music festival industry.

Background and History of American Music Festivals

George Wein is credited with being the person who started the American music festival. “The pioneering jazz musician and music producer launched the first Newport Jazz Festival in 1954. It was the first big outdoor music event of its kind and has spawned a host of other groundbreaking musical venues since then” (Miller, 2010). Thus, this first outdoor music festival paved the way for larger more well-known music festivals.

One of the most famous music festivals to occur after thus first outdoor festival is that of Woodstock that took place in August of 1969. This famous music festival took place on a dairy farm in New York and attracted approximately 400,000 people. The music festival featured 32 acts including legends such as Jimi Hendrix, The Who, The Band, Janis Joplin, Johnny Winter, Credence Clearwater Revival, Jefferson Airplane, Ten Years After, Joan Baez, Santana, Joe Cocker, and Crosby, Stills, Nash, and Young. It is considered to be one of the most significant moments in American music history and by far the most famous music festival that took place to date. Due to poor organization, the people of the town in New York in which the event occurred poorly received the original Woodstock festival. Subsequently, the town passed laws to prevent an event of that scale from ever happening there again. However, the stage for large American music festivals was set and today they are very significant events in the music industry that are important for artists, fans, brands, and more.

Music acts, especially up and coming ones, welcome the opportunity to participate in music festivals. These festivals give them a chance to build a name for themselves and increase their popularity. “It’s so good for an up and coming band because when we go to a new territory, we don’t have to have the pressure of filling the club all by ourselves, we’re just part of this huge thing and they’re promoting it and they’re doing all the cool stuff for it” according to Laurie Shook of the Shook Twins (Robinson, 2015). For music acts that already have sufficient popularity, festivals mean lucrative paydays. It has become commonplace for bands to route their tours around music festivals. “Bands build tours around the high paydays of festivals, and they schedule album releases around the most conspicuous appearances” (Currin, 2014). Thus, there is something in participating in music festivals for both the little known groups and the big named artists alike. In addition, festivals are a great way for underground acts which don’t get a great deal of airplay to build their fan base (Stevens, 2011).

One example of a popular music festival is that of Coachella which takes place in Coachella Valley in Southern California. Coachella is the largest US music festival and takes in April every year. For the past few years, this festival has been so successful that it has sold out two weekends with identical lineups

Founded in 1999, The Coachella Valley Music and Arts Festival has inspired a destination concert circuit that stretched from Washington State to Tennessee and Rothbury, Michigan, to Miami, and included 72 festivals at its height before the 2008 economic downturn…The event is truly a spectacle: spread over six polo fields in Indio, California, it features five stages and massive art instillations. Because of its location 146 miles from the nearest major metropolitan area of Los Angeles and proximate to the vacation community of Palm Springs, Coachella is considered a get-away (Cormany, 2015).

This calls for a substantial financial commitment from fans who must pay for transportation and lodging as well as concert tickets for the three-day event.

Similar to Coachella, Lollapalooza is a massive three-day music festival held every year in Chicago, Illinois which 300,000 people attend annually. Originally, a smaller alternative music event, this festival has increased in both size and diversity since it began. South by Southwest, another big music festival that takes place every year in the U.S, claims to showcase over 2,200 acts that range from virtually unknown to legends. In addition, electronic dance music festivals such as Ultra Music Festival, Electric Forest, Electric Daisy Carnival Las Vegas, Mysteryland USA, Electric Zoo, TomorrowWorld, and Time Warp USA are increasing in size and popularity in the U.S; these electric dance music festivals try to give the crowd the same feeling that is created by the immensely popular Belgian music festival Tomorrowland. In fact, there are now music festivals for every genre of music that people can attend to join the hundreds of thousands of current music festival goers.

Music Festivals Promote the Growth of the Music Industry

Music festivals today are an important part of a changing music industry dynamic. With revenue from recordings in a constant state of flux, the music industry has had to find other ways to make money from music fans. The music festival has emerged in recent years as a one of the most lucrative commercial vehicles for the music industry at large. “Coachella is part of a rapid build-up in stationary music festivals, big and small, across the country and reflective of live music's explosion of growth since the millennium. While it won't compensate for a 50 percent drop in U.S. recorded music sales since 1999, concert ticket sales filled nearly 40 percent of that loss between 1999 and 2009” (Parker, 2013). Music festivals offer fans both a concert experience and a social experience. “’There's an increased trend of multi-faceted, social events and people are more willing than ever to make sure they don't miss out on experiential, destination weekends with friends,’ writes Joe Reynolds, CEO of Red Frog Events, [who produces Firefly music festival in Delaware each June]” (Parker, 2013). Music festivals are becoming the social go-to event on which many are choosing to spend their entertainment budget.

The increase in the popularity of music festivals has led to a need for more big name acts to headline these festivals. However, the number of acts worthy of headliner status is limited, “There are only so many big-name acts to anchor a big festival, and they earn good money. While the lowest-rung act at Coachella made $15,000 in 2010, headliners can command seven figures. It's turned into a nice living for some acts” (Parker, 2013). Music festivals today are giving artists the chance to make big bucks and revamping the music industry.

In 2001, the last time Outkast hit the road for a major tour, they were coming off a multiplatinum album and a Number One single, "Ms. Jackson." André 3000 and Big Boi played 46 shows on the Stankonia tour, and grossed $4.8 million, according to Pollstar. That sounds impressive – until you compare it with the reunion tour they're launching this spring and summer. Outkast will play fewer gigs – 40 shows, every one at a festival – and make vastly more money: around $60 million, according to concert-business sources (Knopper, 2014).

This is not a unique story within the music industry and with regard to music festivals. In fact, many old groups are reuniting to play at music festivals for big bucks. “Outkast's success reflects a new reality: Thanks to huge competition for "event bookings" that sell $300 tickets and even more expensive VIP packages, festivals can afford to pay headliners up to $4 million” (Knopper, 2014). While these increasingly lucrative paychecks lure old bands into reuniting, they often headline multiple events and cause festival lineups to look awfully similar.

Cities often welcome music festivals because they are a huge boost for the host city’s economy. “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” (Reedy, 2015). Coachella, the most profitable of the American music festivals offers a powerful example of the benefit of a music festival coming to a city in terms of revenue. “When you consider the $254 million Coachella brought to the desert region around Indio (and $90 million to the city itself), you can see why a city would do whatever it can to help” (Parker, 2013). Furthermore, these events, which attract large numbers of tourists as well as hometown fans, help to brand a city and make it a more desirable place to visit and live.

Impact of the Internet on American Music Festivals

The Internet and technology is having a notable effect on the American music festival industry just as it is on all other facets of life in America and abroad. Eventbrite, which is considered to be a premier platform for online ticketing and registration for both concert and music festivals, recently conducted a study to explore the booming popularity of music festivals in America. According to Eventbrite, “in the past year, 1 in 10 people have attended a music festival and 1 in 5 millennials have attended a music festival. The boom in music festival attendance is in part due to technology, according to the findings. Social media, has, in fact, fueled the fire for music festivals” (Kunz, 2014). The impact of technology in increasing fan attendance is especially true when examining electronic dance music festivals. This is a type of music that blew up online and garnered many millennial fans in the process. Fans often attend these music festivals without even knowing what the line-up of music artists will be; instead they attend for the overall experience (Kunz, 2014).

Social media plays a significant role in increasing fan attendance to music festivals by creating an online buzz about the impending event. Millennials, the group that most frequently engages in social media, are made aware of the event by this buzz that is created through social media and led to believe that the music festival is the event to attend. Generating a following through social media is a form of non-commercialized publicity that is popular with many millennials today. “With social media such a dominant force in America today, the online chatter about music festivals has helped drive up ticket sales, according to the research. And the demographics of the chatter are overwhelmingly young. In fact, 75 percent of music festival posts on social media come from millennials ages 17 to 34” (Kunz, 2014). Some American music festivals that have benefited significantly from this type of online chatter are: Bonnaroo, Burning Man, South by Southwest, and Coachella (Kunz, 2014). For example, in 2015 the first weekend of Coachella produced 3.5 million tweets (Lynch, 2015). Additionally, festival goers flood social media with photos and posts of how much fun they are having at the music festivals, helping to boost their popularity.

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, SnapChat, and other popular sites. Fans willingly share information highlighting how much fun they are having for friends and family back home to see, and the online buzz helps drive up ticket sales (Reedy, 2015).

Although the 3.5 million tweets that occurred during the first weekend of Coachella is still far less than the number of tweets that occurred during the Super Bowl which had 28.4 million tweets, these tweets along with other forms of social media are is still great publicity for a music festival due to the fact that it is not nationally televised.

The Commercialization of Music Festival

Music festivals today are becoming larger and more commercialized than ever before. According to the Huffington Post article “The Commercialization of Music Festivals and the Rise of Super Concerts”, music festivals emerged out of community driven music and arts gatherings that took place across Europe and North America (Mason, 2015). They have evolved significantly since the time when they were small gatherings of indie artists contributing to the culture of the time. “Music festivals began as small gatherings and developed into larger events, bringing with them a generated vibe that propels a festival forward through word of mouth and a must-attend quality to the event” (Mason, 2015). The growth of the scope and the audience of music festivals caused these events to become popular destinations which appealed to many, generating larger crowds with differing tastes to which these festivals desired to cater (Mason, 2015). One of the reasons for the popularity of music festivals, the article goes on to state, is that they are free from much of the mass commercialization that plagues the music industry in general. These types of events, traditionally, were geared at the fans and lacked much of the commercial atmosphere that is present in much of the music industry.

Music Festivals have evolved tremendously, however, from the days in which they were free from much of the commercialization that is present in the music industry and the type of commercialization that occurs with traditional concerts. In fact, music festivals, according to Mason (2015), have been evolving into mega-concerts frocked with commercialism.

There events that seem like music festivals but lack the grassroots history of the event, do not have years where the festival developed and saw audiences grow over time, and have an overall commercial presentation to fans. As commercialization increases, Super Concerts are labeled as music festivals and made to be a hot ticket of the summer. This is not a natural progression for the thriving music festivals in America and around the world, but a bastardization and redefinition of the concept of a festival, a word and event that is shared worldwide across cultures, a common thread of familiarity between everyone (Mason, 2015).

Some critics of the commercialization of music festivals argue that the traditional history of the music festival is getting lost. In recent years, tickets prices to these events have increased along with the commercial aspects of the music festival. Some examples of music festivals which critics argue are turning into super concerts include: Lollapalooza, Coachella, Peach Fest, Mysteryland, and more (Mason, 2015). “Attending these festivals now includes a hefty ticket price, optional / tempting VIP packages for those who don’t want to camp or deal with the general population of GA ticket holders, marketing of products to concert goers, all while they attempt to see and experience new and familiar music with new and familiar friends” (Mason, 2015). Thus, the fan experience has been significantly diminished by the over-commercialism of the music festival industry. Now fans can expect to pay exorbitant prices for refreshments while viewing acts which increase profits instead of fans’ enjoyment. This can effect a festival promoter’s ability to deliver a new and unique line up. In fact, according to Mason (2015), music festivals are running the risk of dying out all together and being replaced by Super Concerts. One reason for this is due to the fact that even smaller music festivals must include some commercialization in order to compete with the Super Concerts and their plush amenities.

Booking Trends for Music Festivals

There is a tremendous amount of risk connected to booking any type of shows for music promoters. “When it comes to festivals, it’s even more so — promoters need to front massive amounts of cash to pay artists’ guarantees to perform, and if ticket sales are sluggish, or weather forces cancellations, the promoter (and their insurance company) takes the L. All it takes is one bad year to decimate an annual festival” (Ruiz, 2016). Thus, no matter how popular a music festival has become promoters may need a greater sense of security when hosting an event. This is the primary reason that the booking landscape for music festivals recently changed in a way that mitigates the risk to promoters.

The trend in booking headliners for music festivals is that of booking well-known mega-star headliner acts which have headlined music festivals many times before; this booking trend diminishes the uniqueness of the music festival experience. In fact, in the HTF magazine article, “Rock Rant: Are Festivals Running Out of Worthy Headliners” rock editors and writers argue that although the American music festival circuit is hot right now, these festivals run the risk of people not coming back year after year if they select the same headliners of the limited number of headliners from whom they have to choose (Westbury, 2013). This sentiment is echoed by the New York Times article, “Music Festivals Scramble for the Same Headline Talent” which asserts that the music festival circuit has hit a peak and suggest that a downward slide is next due to repetition in headliner selection (Heyman, 2015).

Intense Competition and Consolidation

Because of the risk that is involved with booking music festivals, many festivals that once started off as independent festivals are no longer independent. In fact, big corporate promoters are rushing to buy up these independent music festivals. “Since 2012, four of the top five music festivals in America by attendance went from independent operators to acquired by Live Nation. And Live Nation is only one of the several companies rushing to buy up their own stock of festivals” (Fong, 2016). This has led to a form of market consolidation that has not been seen in the music festival industry before.

Eventbrite offers some warnings about what the corporatization and consolidation of the music festival industry means for the music festival industry and the fans. One of the first cautions concerning the consolidation of the music festival industry that Eventbrite offers is that it may lead to the replacement of a unique local music festival experience with a generic global music festival brand experience; thus, in the future, it may no longer matter what music festival one chooses to attend, they will possess so much similarity to one another (Fong, 2016). In addition, Eventbrite warns that smaller festivals will not be able to compete with larger ones as artists begin to hold out for bigger festivals that can pay them more money and give them a larger crowd for which to perform. Furthermore, Eventbrite warns that large corporations will be more focused on making money from the festivals and the soul of the music festival will get lost in the process. Eventbrite also states that due to the increasing popularity of music festivals in recent years, there will still be opportunities out there to get in on the music festival action. “After all, while the market is getting more competitive, demand is rising as well. Per capita spend on live music events including festivals grew from $29 per person in 2008 to $48 in 2014. The music festival industry may be changing, but with so many hooked fans, there’s no shortage of opportunities for organizers to make their mark” (Fong, 2016).

AEG and Live Nation

One may be unaware that the majority of big named music festivals are run by the same two promoters. The two biggest promoters in the world, Live Nation and AEG Live, have taken aim at the biggest, most successful festivals, and are slowly gobbling them up, piece by piece. AEG Live has owned Goldenvoice, — which puts on Stagecoach, Firefly, and Hangout festivals as well as Coachella — since 2001. Live Nation, the only publicly traded live music company, produces more than 60 festivals, and has been on an acquisition tear of late. The company now owns controlling stakes in Bonnaroo, Austin City Limits, Sasquatch!, Lollapalooza, and Budweiser’s Made in America, among others (Ruiz, 2016). Thus, there is a tremendous amount of market consolidation that has taken place in the music festival industry and this trend is not likely to change soon.

Big promoters such as Live Nation and AEG Live are squeezing out independent promoters trying to enter the music festival market. The mega-promoter is on an aggressive acquisition streak w that is bringing more and more music festivals under its control. “Live Nation’s acquisition of a controlling interest in the massive Bonnaroo Music & Arts Festival in Manchester, Tennessee, from founders AC Entertainment and Superfly continues the global concert firm’s aggressively acquisitive streak in the U.S. festival space, and at the same time eliminates the "independent" status of what was the largest independent music festival on the continent” (Waddell, 2015). With this acquisition, Live Nation has made a definite statement. “As the only publicly-traded live music company, Live Nation aims to show Wall Street it is a force in this robust space” (Waddell, 2015). To date, Live Nation has accomplished its mission of making a good showing to Wall Street. “Live Nation now has more than 60 festivals in its portfolio of European and North American events, including U.S. events like Lollapalooza, ACL Fest, Electric Daisy Carnival, an exploding country music fest roster that will have at least seven events in 2016, and, now, Bonnaroo” (Waddell, 2015).

Similar to Live Nation, AEG has been on a quest to rack up some big name music Lewis, 2016) festival shopping spree, with a portfolio of 27 festivals that includes the highest-grossing fest in the world, Coachella (through its Goldenvoice division), and the pioneer in the space with the New Orleans Jazz & Heritage Festival. AEG Live chairman Jay Marciano has focused on investing in businesses that, unlike tours, create sustainable revenue, and has doubled down on festivals, which Marciano believes will "continue to explode in North America” (Waddell, 2015).

Goldenvoice Partnerships

Goldenvoice, has entered into some significant partnerships with popular music festivals in recent years, helping to solidify AEG Live’s standing in the music festival industry. Goldenvoice, originally a punk rock concert promoter that begin thirty years ago, escalated to the forefront of the music festival scene with its leading event, Coachella (Lewis, 2016). In 2011, the FYF Fest, or the Fuck Yeah Fest, entered into a partnership with Goldenvoice. In 2014, Goldenvoice joined with another well-known music festival, entering into a joint venture with the founders of the Firefly Music Festival, Red Frog Events, to promote and produce the festival (“Goldenvoices Announces Partnership”, 2014). The Firefly Music Festival which began in 2012 “is one of the fastest growing music festivals in the country.” (“Goldenvoice Announces Partnership”, 2014). The Firefly Music Festival is an annual music festival held in June at the Dover International Speedway in Delaware (“Goldenvoice Announces Partnership”, 2014). Goldenvoice entered into another joint venture in 2015 with Hangout Music Festival, a smaller Gulf Shores, Alabama music festival; this music festival boasts a beach backdrop and smaller crowds than other large music festivals. Goldenvoice has also entered into partnerships with Camp Flog Gnaw Carnival, and Panorama music festivals.

In January of 2016, Goldenvoice announced both the dates and location of its initial Panorama festival which is billed to be the New York City version of Coachella (Nelson, 2016). This event will be held on the second to the last weekend in July 2016 on Randall’s Island. The billing and scheduling of this event has caused some commotion in the music festival industry due to the fact that the Governors Ball, a six-year-old independently run music festival, is considered to be the New York City version of Coachella.

The Governors Ball, which will be held the first weekend in June at the same location as Panorama festival, is a music festival which has quickly become very popular in New York City. It is an event that was created by Founders Entertainment, an independent promoter. The first year of the music festival it was a one-day event that drew a crowd of 18,000 people and was held on Governors Island (Nelson, 2016). By 2012, it had doubled in size. By the third year of the festival it had expanded to a three-day event which drew in a crowd of 135,000 guests.

Due to its interest in protecting the Governor’s Ball, its founder, Founders Entertainment was very vocal in urging the city of New York to reject the proposal by AEG to have a music festival in that city, in close proximity to the Governors Ball. Although efforts by Founders Entertainment were unsuccessful, largely due to the lack of support that the independent promoters received from the people of the city of New York, less than 10,000 of which were willing to sign a petition to prevent AEG from holding a music festival in the city, it can be argued that the Governors Ball is in a much better position than AEG’s Panorama festival due to the dates of the two festival. “Late July is a terrible tome to hold a three-day music festival in New York City. It is a terrible time to be outdoors at all in New York City. Many residents abandon the city entirely July weekends; they go to the Hamptons or the Rockaways or the Jersey Shore or Cape Cod or anyplace else one might find water and sand and bathing suits” (Nelson, 2016). The pleasant weather of mid-June that the people who attend the Governors Ball will experience will be replaced by the often dreadful weather that New York City experiences in late July; in late July the humidity in the city is uncomfortable, the heat causes the subway odors to be more putrid than they would be normally, and torrential downpours often occur (Nelson, 2016).

Whether the Panorama festival will be as successful as AEG’s other music festival events in its first year is still undecided. AEG originally wanted to hold the Panorama festival in June but the city of New York would not allow it to take place during that month. Thus, the timing of the music festival may have an effect on whether or not it is able to draw a crowd that it would like to attend the event. Furthermore, AEG wanted to hold their music festival in Flushing Meadows, an area which can be easily accessed for a number of travel routes and which has a significant number of hotels in the immediate vicinity (Nelson, 2016). This location is also twice the size of Randall’s Island. Yet, AEG’s failure to procure the dates and locations that it desired did not stop the Panorama festival from intimidating the Governors Ball.