Has the Music Festival bubble burst?

Has the music festival bubble burst? Explore the factors that contributed to the dramatic rise in music festival cancellations.

Has the Festival Bubble Burst?

by ArtistVerified

Festival Overload

It’s no secret that music festival ticket sales are down substantially this year. Coachella is almost always a guaranteed sellout, but not this year. Over 50 festivals have been canceled in Europe alone and the trend seems to be carrying over to North America, there is evidence from other markets such as Asia and Australia/New Zealand that this is a wider problem. When a business model becomes successful in a specific market, it’s almost a given that copycat businesses will flood the market until there is market saturation and an eventual bubble burst. What we are now seeing in the festival space may be the start of the inevitable. But what are the causes and what can be done to bring the crowds back next year?

CAUSES

Market Saturation: Has the music festival bubble burst?

The simplest and most obvious cause is market saturation. New festivals are popping up every year and they are competing for the same dollars. That means that the cream will rise to the top and fans (and sponsors) will have to choose which festivals appeal to their hearts and wallets. Traveling hundreds of miles to the mainstay festivals with the premier lineups is no longer necessary when there’s a festival with a great lineup within an hour or two. Most music fans can’t afford to attend multiple music festivals and inflation isn’t making it any easier.

The Headliners

Quite simply put, the number of true festival headliners is finite and dwindling. How many festivals can Foo Fighters or The Killers continue to headline year after year? This is a result of a number of factors but the one that is most troubling is the DSP algorithm effect. An artist that has a massive amount of streams may not be a great festival headliner. Streaming numbers cannot be equated with record sales. True festival headliners are artists with a broad appeal and a reasonably robust touring history. There are less and less contemporary artists that have that today, partially due to playing more festivals than headline dates. Further, festivals are cannibalizing the other side of the touring industry; the club dates and arena tours, which are now suffering even more than the festivals. Just ask The Black Keys or J Lo.

The Undercard

When festival lineups become increasingly unrecognizable and odd to even the youngest music fan amongst us, it’s probably not a good sign. Festival curators are losing an unwinnable battle at present because they’re becoming dependent on booking and traction data that is based on metrics that tend to lean to prediction rather than history-based analysis. The days of “this artist is gonna blow up” are over for the most part. And it’s not the curator’s fault. Like the headliners, there is a finite number of acts that people are willing to pay to see more than once a year or less. Further, some music fans want a more curated lineup appealing more to their specific tastes and aren’t getting it from the Coachella/Gov Ball “too cool for school” DSP/Tik Tok-driven lineups. Genre-targeted festivals/tours that have remained focused on artists of a particular type — whether they be established or emerging, eg Knotfest or Inkarceration seem to be doing better than Coachella or Glastonbury.

The Post-Covid Hangover (Gonna party like its 2021/2022)

The dreadful summer of no live music that was 2020, meant that music fans were chomping at the bit to get out and see more shows than ever in 2021 and 2022 and seemed to continue to do so into 2023. Artists could tour constantly if they wished and the fans would come out. The live music industry was apparently crushing it like never before. But like all good things, 2024 has signaled that the party has come to an end. Festival organizers now have the data that the pent-up demand in 2021/2022 was an aberration, not a new normal. Most artists are coming to the sad realization that successfully touring every year isn’t a reality. Artists will have to return to “taking the year off” from touring in order to sustain their market-demand, at least in the US. We likely won’t see many of this summer’s headliners back at it next year unless they tour outside North America.

The Hard Costs

Like just about every other market currently, the costs of doing business as a music festival are higher than they have ever been. But because the festival market is now more saturated with new festivals, promoters aren’t able to simply raise their prices without seeing a negative effect on sales. This is simply supply-demand economics.

Limited Sponsor Dollars

Most music festivals rely heavily on substantial sponsorship dollars to even come close to break-even, much less profitability. Sponsorship dollars are not flowing like they have in the past and the competition is even greater now with more hyper-targeted and market-curated festivals popping up. Sponsors expect more for their money and have less of it to spend. The competition for these dollars is fierce and getting fiercer.

SOLUTION?

Organic Growth

Most of the big-name festivals with longevity and history started very small and grew organically. Today, we see festivals pop up with an incredible lineup in year one and zero chance of breaking even. Certainly, it’s not easy to break even in year one or two even, but slow and steady wins almost every race. The festival that builds a sustainable relationship with attendees will stand the best chance of having longevity.

KYC

Festival attendance is almost entirely driven by experience. Yes, the artist line-up is what’s on the poster. But it’s the experience from the previous year or years that keeps people coming back. It’s imperative for festival promoters to not only know who their customers are, but what they love or don’t love about their festival. If someone has a bad time at your festival, it’s almost guaranteed that they won’t be back. Know your customer. Know as much about them as you possibly can. They bought a ticket and watched some artists on some stages and bought some merch. Which artists ? Which stages ? Which merch ? What do those fans do before attending ? Afterwards ?

Creative Curation and Experience

Festival lineups that look like every other festival lineup that year will see their turnstile numbers decrease as quickly as they grew. It’s no longer good enough, and the festival that is creatively curated to stand out as an outlier may be the one with the best shot at getting the festival-goers dollars today. Unique and memorable festival experiences will bring the fans back again and again.

Conclusion

At the end of the day, we have far exceeded the critical mass of music festivals to the point of market oversaturation, at least in the current economy. We are also seeing a sales slump at the arena and shed level. A correction is coming and those festivals which are creative and resourceful will live another season, while sadly, some others won’t.

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