Organizational Strategy / Product Development

Music Festival Season: Surging More Now Than Ever

Future_Music_Festival_2013_(8541725920)Music festival season is finally upon us with lineups being finalized every day, and fans eager to buy tickets as soon as they go on sale. It seems that more and more festivals are starting up every year, which brings up a big question. With so many options for fans to attend how is it that festivals like Lollapalozza, Coachella, and Bonnaroo keep expanding their sales? Just last year Coachella generated a staggering 78 million in revenue, which is up from 17 million in 2007. With most major music festivals selling out in a matter of minutes, Goldenvoice the company that produces Coachella, made the decision to expand the festival to two weekends. It seems after the immense success of Goldenvoices’s move many other festivals are quickly following their two weekend concept in hopes that the can replicate Goldenvoices’s success.

The opportunity to market to such a large base of potential customers in such an intimate setting allows people to relate good music to a company’s brand, making a sponsorship invaluable in terms of brand exposure. This means that now large portions of music festivals’ capital is coming from sponsorships from companies like Budweiser and other corporations that are seeking a new setting to market in. Paul Chibe, Vice President of U.S. Marketing at Budweiser admitted, “From a financial standpoint we put more in. We didn’t make money on it.” Chibe noted that, that benefitting financially wasn’t the point, it was about connecting with consumers on a personal level. It speaks volumes that music festivals are so large now that companies would be willing to take a loss just get brand exposure to the audience.

Moving forward it would be no surprise to see traveling festivals with one or two constant headliners that are on contract which would their typical booking price down per show. This would also allow wiggle room for music festival producers in terms of varying sponsors, along with the ability to alter lineups based on the cities they are traveling to. Mad Decent, a record label based out of Philadelphia, started employing this strategy in 2013. It allows their festival’s culture to reach a larger audience by making the events more accessible to cities that may not have festivals around; therefore, reaching new sources of revenue. In addition, instead of having one standalone festival with all of their revenue coming in one or two weekends, it becomes a more reoccurring revenue stream. Regardless of the structure whether it is a traditional stationary music festival or a traveling one like Mad Decent the music festival industry is showing no signs of slowing down.  It has proven that itself a worthy industry to invest serious marketing dollars in even if all of the positive feedback from consumers cannot always be quantified in dollars.

Austin Knight

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