In recent years, a growing number of festivals have been forced to close their doors. This situation has been a long time coming. Everybody focuses on Covid, Brexit, and increasing costs, but the inflationary pressure was coming even before that with the digitalisation of music, where artists were no longer making the bulk of their revenue from selling albums. The moment they started relying on touring, we started seeing performance fees creep up.
Putting on a festival is costing more and more money, and recent events have driven costs up further across the board. Financial constraints mean people are more selective about which festivals they attend, often limiting their participation to one or two events per year.
This shift in consumer behaviour has made the market more competitive. Consumers are spending on either the higher end or the lower end, and everything in the middle is suffering. All of these things have contributed to where we’re at today. More festivals are having to close. In the UK, there are 50 and counting, and everybody is trying to find rational explanations as to why, whereas I think we should be looking at what we can do about it. Complaining about it is one thing, but addressing the issues is more important for their long-term survival.
“Find other means of generating revenue outside of the traditional ticketing, sponsorship, hospitality, and F&B”
To combat these pressures, festivals must diversify and annualise their financial models. If I were to summarise, there are three steps. The first step is annualising the model – a festival is an event generating revenue from a weekend or two weeks, so mitigate the risk from it being able to exist all year round. The second thing is diversify and find other means of generating revenue outside of the traditional ticketing, sponsorship, hospitality, and F&B.
The third thing is working on comms and the unique selling point of the festival. In the last few years, there has been an overabundance in the offering of festivals, and those that are faring better are either the big ones or the ones that are looking at niches. It’s being able to have a very strong identity, a strong USP, and being very precise as to what they’re about. That’s all down to the brand, the content, and the audience. It’s looking at your event in those terms and then articulating your activities around that and making sure that you’re able to analyse, diversify, and amplify.
We live in a digital world – that’s undeniable – whether you’re a festival, artist, or a regular punter, everybody consults social media. Embracing it is a way of annualising your presence, so leverage the audiovisual element to make yourself present all year round.
“You know your brand, you know your content, you know your audience, and brand sponsors are buying into that”
And short of a big broadcast deal with the BBC, social media is the easiest way to do that, so capture the experience as best as you can, build a story with what you capture, and then communicate that across your social media channels. However small or large your festival is, that is something you can control. Leveraging existing content, such as recordings and performances, can create new revenue opportunities. For example, the Montreux Jazz Festival has tapped into its extensive audio-visual archives to generate additional income.
Obviously, not all festivals are equal – Montreux is lucky – but it’s about looking at other sources of revenue outside of the traditional three. Festivals have extensive experience in event organisation. Offering these skills as a service to other events or companies on a white-label basis can be a lucrative business avenue. You can also be looking at licensing your content and then working more closely with your sponsors to create branded content on their behalf. Merchandising is an easy win.
A sponsorship deal is usually quite structured in the sense that you allow a brand to have a certain visibility across your event in exchange for cash. However, if you add an audiovisual element, you’re able to upsell. You know your brand, you know your content, you know your audience, and brand sponsors are buying into that. So use your experience to upsell that knowledge to the brand through this branded content opportunity.
Expanding the festival’s footprint internationally can also be beneficial. Primavera has been able to internationalise quite successfully, and Montreux has done that as well with festivals in China, Miami, and Rio. By viewing the festival as a brand, leveraging digital platforms, and offering their organisational expertise as a service, festivals can ensure their longevity and continued success in the evolving music landscape.
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Festivals must diversify their financial models
Nick Bonard, CEO of Montreux Jazz Festival Media Ventures, gives three examples of alternative revenue streams for events
13 Sep 2024
In recent years, a growing number of festivals have been forced to close their doors. This situation has been a long time coming. Everybody focuses on Covid, Brexit, and increasing costs, but the inflationary pressure was coming even before that with the digitalisation of music, where artists were no longer making the bulk of their revenue from selling albums. The moment they started relying on touring, we started seeing performance fees creep up.
Putting on a festival is costing more and more money, and recent events have driven costs up further across the board. Financial constraints mean people are more selective about which festivals they attend, often limiting their participation to one or two events per year.
This shift in consumer behaviour has made the market more competitive. Consumers are spending on either the higher end or the lower end, and everything in the middle is suffering. All of these things have contributed to where we’re at today. More festivals are having to close. In the UK, there are 50 and counting, and everybody is trying to find rational explanations as to why, whereas I think we should be looking at what we can do about it. Complaining about it is one thing, but addressing the issues is more important for their long-term survival.
To combat these pressures, festivals must diversify and annualise their financial models. If I were to summarise, there are three steps. The first step is annualising the model – a festival is an event generating revenue from a weekend or two weeks, so mitigate the risk from it being able to exist all year round. The second thing is diversify and find other means of generating revenue outside of the traditional ticketing, sponsorship, hospitality, and F&B.
The third thing is working on comms and the unique selling point of the festival. In the last few years, there has been an overabundance in the offering of festivals, and those that are faring better are either the big ones or the ones that are looking at niches. It’s being able to have a very strong identity, a strong USP, and being very precise as to what they’re about. That’s all down to the brand, the content, and the audience. It’s looking at your event in those terms and then articulating your activities around that and making sure that you’re able to analyse, diversify, and amplify.
We live in a digital world – that’s undeniable – whether you’re a festival, artist, or a regular punter, everybody consults social media. Embracing it is a way of annualising your presence, so leverage the audiovisual element to make yourself present all year round.
And short of a big broadcast deal with the BBC, social media is the easiest way to do that, so capture the experience as best as you can, build a story with what you capture, and then communicate that across your social media channels. However small or large your festival is, that is something you can control. Leveraging existing content, such as recordings and performances, can create new revenue opportunities. For example, the Montreux Jazz Festival has tapped into its extensive audio-visual archives to generate additional income.
Obviously, not all festivals are equal – Montreux is lucky – but it’s about looking at other sources of revenue outside of the traditional three. Festivals have extensive experience in event organisation. Offering these skills as a service to other events or companies on a white-label basis can be a lucrative business avenue. You can also be looking at licensing your content and then working more closely with your sponsors to create branded content on their behalf. Merchandising is an easy win.
A sponsorship deal is usually quite structured in the sense that you allow a brand to have a certain visibility across your event in exchange for cash. However, if you add an audiovisual element, you’re able to upsell. You know your brand, you know your content, you know your audience, and brand sponsors are buying into that. So use your experience to upsell that knowledge to the brand through this branded content opportunity.
Expanding the festival’s footprint internationally can also be beneficial. Primavera has been able to internationalise quite successfully, and Montreux has done that as well with festivals in China, Miami, and Rio. By viewing the festival as a brand, leveraging digital platforms, and offering their organisational expertise as a service, festivals can ensure their longevity and continued success in the evolving music landscape.
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.
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