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Upstart music fests feed market demand

Music for Screens: Summer 2012

The U.K. and Europe may have led the way with their hundreds of yearly music festivals, but as U.S. audiences seek more bang for their music buck amid a tight economy, the U.S. concert biz is being transformed by a growing wave of upstarts and expanded festivals.

The question is how well promoters will manage three “Ps”: proliferation, pricing and packaging.

The U.K. biz was hit hard by an oversaturation of music fests this summer, leading the Guardian newspaper to declare the season “a washout,” though C3 Presents co-founder Charles Attal believes the U.S. festival market remains “underserved.” And pricing sensitivity had organizers of the Coachella and Stagecoach fests threatening to pull their events from Indio, Calif. earlier this year when the city proposed a tax that would have added $36 to each ticket.

Right now, though, the festival concept is providing cash-strapped U.S. consumers with a value proposition that has found traction alongside the traditional touring-band model.

“If you’re going to see 130 bands for $150 to $200, it’s a lot better than seeing two bands for $100 at an amphitheater,” says Attal, whose company co-produces Lollapalooza, started Atlanta’s CounterPoint fest, kicking off in September, and partnered with Metallica to launch the metal band’s Orion Music + More festival this past June.

Concert promoters, in fact, are adding new events and widening current offerings at a staggering pace to meet demand.

Live Nation started nine new festivals this year, including the St. Paul’s River’s Edge Music Festival and Philadelphia’s Jay-Z-curated Budweiser Made in America. AEG subsid Golden­voice successfully expanded alternative music festival Coachella from one weekend to two. And C3’s Austin City Limits fest will likely grow similarly in 2013.

While amphitheaters “are by all means the bedrock of our summer schedule,” Live Nation co-president of North America Concerts Mark Campana says his company is “absolutely looking at festivals to play a bigger part in the overall business plan.”

In addition to tentpole festivals like Coachella, Lollapalooza and Bonnaroo, there has also been a rise in what AEG Live president-CEO Randy Phillips calls “minifests”: events in secondary and tertiary markets, like Pryor, Okla.’s Rocklahoma or Columbus, Ohio’s Rock on the Range, that may bring more artists into that city for a one- or two-day fest than the area is likely to see all year.

“(These markets) don’t normally get an A-list arena headliner on tour … unless it’s a routing date,” Phillips says. “So what you get with the minifest model in the smaller market is it serves a need. You’re not competing with the plethora of choices you are in a major market. There’s a lower ticket price, but a lower risk as well.”

When it comes to planning a new festival, organizers weigh a number of key factors, including proximity of competing events and available talent.

“The biggest headliner in a festival is actually the location,” says Phillips. “You can never under underestimate the site.”

Unlike Bonnaroo, where most attendees stay on the Manchester, Tenn. grounds, most multiday festivals need to offer options for on-site camping as well as nearby hotel accommodations.

Just as Goldenvoice uses the same grounds for country fest Stagecoach as it does for Coachella, Live Nation found that after producing the Sasquatch Festival at The Gorge for several years, the Quincy, Wash. amphitheater was ripe for two more festivals. So the company added both the electronic dance festival Paradiso and country-themed Watershed this summer.

But even while organizers have found more opportunities in an expanded palette of music fests, as the number of festivals rises, so does the competition for talent, leading to hard choices.

“You have to be selective (in deciding) when you bring out the big checkbook rather than the little checkbook,” Campana says. “You, as the producer of the event, pretty much set the scale.”

The best-case scenario is when the festival becomes a big enough draw to sell itself.

One of the ways Coachella deals with escalating talent prices is to “put tickets on sale without announcing our lineup, just to underscore how powerful the brand is, so when we’re negotiating with artists, there’s not a gun to our head,” Phillips says.

All three promoters are keenly sensitive to the impact of ticket pricing.

“You overprice a show and you’re dead in the water,” says Attal.

Phillips, recalling Goldenvoice’s June dustup with the city of Indio over a possible additional $36 per-ticket fee, says, “That was a row too far for us. We couldn’t pass that on to the consumer and we couldn’t absorb it.” The city council backed down from the ballot initiative.

Now, amid the widening fest landscape, there is the question of just how large the consumer appetite will be.

Though promoters say the U.S. has a long way to go before it reaches the saturation level of the U.K. , it was only a few years ago that a number of U.S. events ended their runs: AEG ditched its Rothbury (Mich.) Festival and New Jersey’s All Points West Festival; Live Nation shuttered its Pemberton (B.C.) Festival after one year.

Campana, though, still sees growth potential in country and electronica events. Toward that end, Live Nation acquired electronic music concert promoter HARD Events and its two live fests.

Phillips hopes for continued expansion into the minifests.

And Attal believes more lifestyle fests that cater to specific segments, such as snow boarders or yoga enthusiasts, will emerge.

“We’re still on an upward trend,” Attal says. “There’s room for more.”

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