Flying across continents, taking multiple flights and trains, staying in tents for days to staying back for retreats with fellow festival goers. Standing in lines for tickets to pre-booking on emails for national and international festivals weeks in advance! Music festivals globally have come a long way in the last few years. And the burgeoning popularity has made these experience seekers the center of all their plannings and offerings.
What started out of a communal spirit has now grown into a mainstream business reaping millions in profits, attracting corporate sponsorships, 1000s of people attending each year for tickets sold at more than a premium. The culture of music fests is comparatively new in India but has been on a steady rise in the last decade with big international festivals like Lollapalooza now stepping into the country as well, alongside mega Indian music fests like Sunburn, NH7, Ziro and other small, niche & genre specific music fests. The oldest music fest in India dates back to 1986, called the Independence Rock Festival. Popularly known as the “Woodstock of India”, now renamed as Mahindra Independence Rock, it is the oldest and biggest rock-fest in India till date.
However, organizing a music fest is not an easy task let alone generating revenue out of them. There are a million things that can go wrong and you’ve got to prepare for all of them. Cost and revenue from a festival depends on multiple factors such as the size of audience, location, permission costs, duration, infrastructure, format (destination camping or city) and not to forget promotions & marketing costs. Even for a successful IP like NH7 Weekender in India, it’s hard to estimate costs and profits. One of the biggest music festivals in the world, Coachella, reported a record high gross of $114.6million in 2017 making it the only recurring music festival to earn more than $100 million. According to studies published in Statista, the revenue in the music events segment is expected to cross $27 billion globally, and cross $204 million in India, in 2023. In the same study, it projects the number of users in India to reach 21.8 million by 2027. And if industry numbers are to be believed, over 1.5 million unique attendees (yep, unique NOT REPEAT) buy tickets to these fests- in India alone.
The reason music festivals have evolved from being a communal gathering of people jamming to the same type of music to a commercially profitable format is the shift in their audience’s spending behavior. People are now more likely to spend on experiences rather than material goods. As a result, brands have now moved towards “experience economy” where they get to target a much larger group in one space and hence capitalize on the opportunity. This is why you see big brand names from the liquor industry, food & beverage, clothing and even social networking sites like Bumble, Snapchat and Instagram, associating with such festivals.
According to a survey by Deloitte in 2019, 32 million people attend music fests every year and 57% of that group values the experience of traveling and seeing the world over anything else, even owning houses. Social media has become an integral part of this culture for both the organizers and the attendees. For organizers, social media has become the key space to promote the event globally creating over 20 million conversations online across Twitter, Facebook and other platforms, including conversations about tuning in to live-streams of the festivals online. This also means over 20 million touchpoints for brands to reach their customers.
A music festival typically has 3 sources of revenue: Ticket Sales, Food & Beverage, & Merchandise.
The audience’s listening behavior has also changed over the last few years. While they can now stream music online for free or for a very minimal subscription fee, concert tickets and merchandise now make up for the bulk of their expenditure on music. It has eventually become a way for them to connect with the artists. This is again something that the brands & organizers alike have capitalized upon. As we now see a massive increase in Band-Brand merch collaborations, we also see event organizers & promoters being more keen to pay artists higher to tour and appear on live stages. Ultimately attracting more unit and ticket sales, respectively. This is a win-win situation for artists as well. They don’t have to go through the grind of touring anymore and at the same time get paid more to do 1 show across a few festivals spread across the year. Since the number of streams online increases both before and after the festival, their earnings from revenues on online sales increase as well.
Food & Beverage is another crucial revenue source for these festivals. 1 food stall could cost the organizers hundreds of dollars. To ensure profits from it, they need to make the right deals with the right brands. Big sponsors from the industry like Bacardi, 100 Pipers, Budwiser, etc. make it easy for them to attract more brands, providing things at a cheaper rate and getting more eyeballs.
Of course the ultimate success of the event lies in the line-up. The number of big, famous artists scheduled on the roster as well as the discoverability of newer artists is a major motivator for the people involved in the music culture. Listeners today will flock more towards a music festival that offers a variety of genres and artists. This gives organizers more leverage to attract bigger sponsors, in-turn inviting bigger artists and higher ticket sizes thus easing the load to get bigger volume in ticket sales.
The experience and excitement of music festivals is not dying anytime soon though. Big festivals such as Coachella, Summerfest, Tomorrowland, etc. sell out tickets within hours if not minutes with hundreds of thousands of people attending them from across the world every year. The success and longevity of music festivals across the world of course depends on big music conglomerates who provide the kind of backing needed in terms of funding, getting sponsorship deals, managing infrastructure and capacity, providing the right human resources, etc.
Music festivals these days have become huge sources of income, both direct and indirect, for everyone involved in them. And not only that, they have become ego boosters for everyone involved from the teams to the attendees who get to brag about them being a part of major cultural movements globally. The experience of being a part of such moments and being able to share them online is what the audiences crave for. And thus, the culture of music festivals is not dying anytime soon. In fact, if industry rumors are anything to go by, the future of the music event segment could also involve crowdsourcing lineups!