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A business interruption fund is needed to boost confidence

Following the last-minute cancellation of Bluesfest, the AFA’s Julia Robinson warns that a lack of government-backed insurance could impact business confidence

03 May 2021

Julia Robinson, AFA

By the time a festival is ready to open gates, up to 70% of its costs can already be spent. While health risks are understandable, they remain uninsurable.

Given Australia’s appetite for risk in this pandemic, it means every festival promoter, supplier, and sole trader is sometimes gambling everything on the daily Covid announcements.

As we’ve seen, just a single positive test can lead to cancellation. After a year of near-zero income and reserves eaten up by last year’s cancellations and postponements, the risk-versus-reward argument has a clear outcome. It’s risky.

One promoter has told the Australian Festival Association that it’s so risky that the company’s board will have their homes on the line to proceed with this year’s show. Cancellation would mean the end of a beloved festival brand paired with the loss of personal assets.

Some have pivoted to smaller shows, which carry less risk, but they also receive less income or may only break even. Others might be ‘lucky’ enough to continue hibernating. But at what cost? Will audiences remain loyal? Will they lose their place in the market?

What happens when consumer confidence is high and business confidence is low?

Targeted industry funding has been welcomed and has helped, to an extent. Those lucky enough to receive a grant for excess Covid costs (some over 40% higher than pre-Covid) have been able to continue planning events. Funding has also been available to festivals shifting their format to small concert series or digital events.

Promoters who continue have been handsomely rewarded for persevering too. Fans want to get out to shows. Consumer confidence is high.

It’s great that audiences are keen to come out. Though it begs a number of questions, such as: What happens when consumer confidence is high and business confidence is low? Is that how you get a missed opportunity?

At the time of writing, some €3.2billion (or nearly AU$5bn) has been committed in shared risk or insurance schemes across Europe for festivals and live events. The UK industry has been pushing for something too.

While shows may be a long way off in some of those markets, planning could continue without as much risk with a cancellation fund.

Everyone is impacted when one part of the industry isn’t functioning

By comparison, Australia, and more specifically only two states, have implemented a combined AU$17m festival and event cancellation fund. Those states are Western Australia and Tasmania. So far, nothing has been committed for the largest markets on the East Coast. As the industry knows all too well, this is a national ecosystem.

Whether you are a solo artist playing locally or a festival promoter touring nationally, everyone is impacted when one part of the industry isn’t functioning. Financial ramifications aside, the recent cancellation of Bluesfest had a devastating emotional impact on the industry. We all felt the collective slump of shoulders.

The suppliers, crew and vendors who work these shows all know each other from working the same festival circuits. Often, they follow the weather, moving from show to show, as if in migration.

For many who work in festivals, it’s more than a job. It is their passion and their community. At times gigs in the festival industry have to be substituted with corporate shows or events. So many do it for love, not for money.

Recently, I was reminded of that love when onsite at the first big outdoor show I’d been to in well over a year. It was like being home. I knew the promoter, site crew, security, suppliers, venue and staff from my days working the circuits.

If business confidence was increased, there would be more shows in the pipeline

Trigger warning for those in lockdown or missing physical connection: There were more hugs given and received in the first five minutes than since the beginning of the pandemic. These weren’t polite obligatory greetings either. This was a genuine and joyous reunion that left me giddy. Everyone was excited to be there and talking about other upcoming shows with enthusiasm. It was a few weeks before Easter.

Fast-forward to Bluesfest, and I can only imagine the feeling of being onsite when it was cancelled. A far cry from the exuberant homecoming I had witnessed.

Sure, an insurance fund doesn’t guarantee these disappointing setbacks won’t happen. We have a long climb out of this pandemic. But if business confidence was increased, there would be more shows in the pipeline. At least that could lessen the blow on an industry whose primary function is to deliver happiness to people.

 


Julia Robinson is general manager at the Australian Festivals Association.

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