As the musical duo Big Grams took the stage at the Bonnaroo Music & Arts Festival last June, Antwan Patton, better known as rapper Big Boi, looked out at the crowd in Manchester Park, Tenn., and saw an audience that had shrunk by half from his previous appearance.
Bonnaroo, named best festival by rock bible Rolling Stone magazine in 2008, has earned a reputation as one of the most successful and innovative music events in the country. Yet ticket sales fell to an all-time low in 2016 — a 46-per-cent drop from 2011 — and the festival lost several million dollars, according to people familiar with the finances who asked not to be identified.
“What we did last year didn’t resonate with the fan base,” Joe Berchtold, chief operating officer of Live Nation Entertainment Inc., said in an interview. Live Nation, which bought a stake in Bonnaroo in 2015 as part of a festival-buying spree by the world’s largest concert promoter, has sunk millions of dollars into improving physical facilities, such as bathrooms, and will have U2 perform its Joshua Tree album in June.
Even though the U.S. concert business has been growing 10 per cent annually for a decade and 32 million people attend at least one festival every year, Bonnaroo’s struggles worried many music industry executives. If one of the premier North American music events can’t make money, trouble might be contagious.
A number of smaller country festivals, including one created by Live Nation, have folded. Sweetlife, a festival created by food chain Sweetgreen, has shut down, too. Just two years ago, it expanded to two days and booked rapper Kendrick Lamar, one of the hottest acts in music. Attendance at Sasquatch, one of the biggest music festivals in the Pacific Northwest, fell about 40 per cent in 2016. The festival booked reclusive crooner Frank Ocean to lift sales this year.
‘More cancellations’
The closures and strains all point to a glut of festivals, promoters and agents say, with the least-creative promoters suffering the most.
“There will be more cancellations,” said Evan Harrison, chief executive officer of concert promoter Huka Entertainment. “The market got saturated and there are only so many dollars to go around.”
Huka stages two of the more popular festivals in the world, Pemberton in British Columbia and Tortuga. Tortuga, a country festival, garnered $6.7 million (U.S.) in grosses in 2016 — 18th among all festivals in the world, according to Pollstar. The event takes place in Fort Lauderdale, Fla., in April — a prime time and location — and blends stars with up-and-coming acts.
“Having a destination location is important,” Harrison said. “You don’t build brand or loyalty if you aren’t doing a bunch of things differently.”
Doubled in size
After a year in which critics complained Bonnaroo’s lineup left much to be desired, Live Nation shifted control of booking musical talent from AC Entertainment, which co-founded Bonnaroo, to C3 Presents, the promoters behind festivals Austin City Limits and Lollapalooza.
Live Nation needs a couple of years to leave its imprint, Berchtold said.
“Bonnaroo is a great brand and means something to fans across the country and internationally,” he said. “How we’re now approaching booking it and investments we’ve made in (the) physical site, which needed some renewal, will bring that brand back to what it has been.”
The modern era of U.S. music festivals began in the early 1990s, when musician Perry Farrell created Lollapalooza as a touring event, later settling in Chicago full time. Coachella, Bonnaroo and Austin City Limits followed.
Though the festivals lost money at first, Coachella and Lollapalooza now sell out every year, often before their lineups are announced. They also hold a special pull with artists. Beyoncé will play Coachella in April while seven months pregnant, then disappear for the rest of festival season.
Coachella grossed $94 million in 2016, making it the biggest music festival in the world. Meanwhile, raves such as Tomorrowland, Electric Daisy Carnival and Ultra turned electronic dance music into a profitable business.
Buying sprees
Live Nation has acquired many of the world’s top festivals over the past few years, taking stakes in the promoters of Electric Daisy Carnival and Bottlerock, as well as Bonnaroo, Austin City Limits and Lollapalooza. Rival Anschutz Entertainment Group Inc., which owns Coachella, has been on a buying spree of its own, acquiring the promoters responsible for the Hangout Music Festival in Alabama and Firefly in Delaware.
For well-run festivals, the finances pencil out. While promoters and ticket sellers have to share revenue with artists on a usual tour, festival promoters control every aspect of the event, from parking to food, and pay artists a flat fee.
A big promoter such as Live Nation can also use the same team of salespeople for every event and reduce the cost of talent by booking the same acts for multiple festivals.
“It’s super hard for independents,” Harrison said. “We don’t have the back-office efficiency to make the economics more attractive.”
Consolidation downside
The consolidation of festivals has a downside: lineups become homogenized. Big Grams performed at five festivals last year, while the DJ trio Major Lazer received top billing in at least six in the U.S.
British electronic act Disclosure played at Lollapalooza, Coachella, Sasquatch and Firefly.
In June, Bonnaroo is offering fans a lineup that, aside from U2, includes Red Hot Chili Peppers, The Weeknd, Chance the Rapper and Major Lazer.
“There aren’t too many festivals, there are just not enough good festivals,” said Randy Phillips, CEO of LiveStyle Inc., promoter of Tomorrowland and Electric Zoo.
“Festivals are lineup-driven and if you don’t have a great lineup, you’re screwed.”
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