Today’s music festivals are a totally different beast than the era of Woodstock and low-tech, niche attractions. The last decade’s record-breaking growth has created both new opportunities and new challenges for fests.
Following another booming festival season in 2015, Eventbrite and IMFCON teamed up to uncover the biggest challenges modern festivals face. We surveyed 139 festival organizers, promoters, and production companies that hold at least one fest a year. The result is “Music Festivals in 2015: Perspectives from Backstage,” a series that investigates organizer attitudes about everything from brand acquisitions to securing sponsors.
In surprising uniformity, festivals of all sizes and genres agreed on three main challenges they face. Read on to find out what the top challenges are and what you can do to take them on.
Challenge #1: Making a profit
To anyone that’s ever worked in the festival space, struggling to make a profit is probably a familiar difficulty. So it’s no surprise that 39% of respondents ranked profit as a top challenge, regardless of the type or number of festivals they organize.
| Type of organizer | Production companies | Festivals | Festival promoters |
| % challenged by making a profit | 27% | 36% | 68% |
Without question, profit is top of mind for festivals across the board. The bottom line especially keeps festival promoters up at night, with 68% reporting it as their biggest challenge.
Profitability and ticket prices go hand in hand — especially if you’re working over multiple years without major investments. This may be why 59% of festivals with 2,000-10,000 attendees struggle with profit. They’re big enough to need to invest some major dough, but small enough that they can’t charge their fans the same premium as larger fests.
Luckily, there are some tricks to drive demand at any price point. As Tom Russell, cofounder of Founders Entertainment, puts it, “Ticketing is the most important part of the festival from a business standpoint. It has to be right.” By understanding how to best set your prices, you can motivate people to buy earlier and spread the word, so you get more money in the bank faster.
Industry Tip:
Our research shows that music events have an average of 5-6 early sale tiers, and offer an average of 10% off for early birds. That’s a small enough percentage to avoid a significant impact on your bottom line, but big enough to motivate 15-20% of fans to buy early. Go beyond the basics of early bird ticket sales by creating urgency through one of these methods:
- Unorthodox pricing tiers: If you want to reduce the discounts but drive the same level of buzz, try quantity-based tiering, which you can do anytime you want to boost sales. You’ll be amazed at the difference you can drive by offering 5% off to the first 50 people to use a discount code. You could even steal a page from Uber’s book. Let your fans from previous years give a discount code to their friends to drive loyalty among totally new attendees.
- Enticing premium packages: Eventbrite’s research shows that VIP experiences account for up to 10% of ticket sales and 25% of revenue for some events. There are lots of unique ways for fests to take advantage of this trend. You could offer exclusive areas, discounted drinks, backstage passes, or camping and hotel bundles. Even a simple bonus like a festival T-shirt or priority entry can motivate people to splurge with negligible costs to you.
Want more tips & tricks to optimize your profit? Check out our full report on How to Make More Money with Your Event Pricing Strategy. You’ll learn how to factor in scarcity, competition, and demographics into setting your core price. After all, there’s nothing more important to your bottom line than optimizing your pricing strategy.
Challenge #2: Securing or retaining sponsors
With more and more festivals competing for limited resources, 36% of respondents say it’s hard to make their event stand out to sponsors. For fests with less than 5,000 attendees, the competition reaches Hunger Games-levels of intensity: 60% view winning sponsorships as a major challenge, hand-in-hand with their struggle for profit.
| # of attendees | <2K | 2-5K | 5-10K | 10-50K | >50K |
| % thought getting or retaining sponsors are an issue | 60% | 60% | 42% | 35% | 25% |
In addition to ticket sales, sponsorship directly affects your fest’s topline revenue. Brands spent an estimated $1.34B on music festival sponsorships in 2014 to reach more big-spending millennials. These days, it’s not enough to offer logo placement on the main stage in exchange for $50,000. Brands want authentic activations that create real connections with your attendees.
Industry Tip:
Prove how well you know your audience: Why should the brand want to invest in your fans? In addition to demographic info like age, gender, geography, and income, you should be able to outline psychographic data around spending habits, lifestyle, and why fans choose to come to your festival. It’s easy to gather this info through custom questions in ticketing, or with free surveys using tools such as SurveyMonkey. If you don’t have those resources, do some research on social media to listen in on fans who’ve used your hashtag.
Offer creative sponsorship options: Some examples from the past include a VH1 photobooth with social media integration, a Garnier Fructis salon at the multi-day Voodoo music festival, or sponsorship of your custom mobile app. Have a great idea but not quite sure how to pitch it? Master your sponsorship proposal with our simple 6-step guide to Event Sponsorships in Today’s Live Music Industry.
Challenge #3: Market saturation & competition from other festivals
The growing number of fests for both fans and sponsors to choose between was a concern of 30% of organizers. It was especially top-of-mind for new and destination festivals. And in contrast to the first two challenges, competition is the largest concern among the biggest fests. Over half of organizers with more than 6 fests a year and nearly half of fests with more than 10K attendees report market saturation as a central worry.
| Frequency of festivals | 1 per year | 2-3 per year | 4-6 per year | 6+ per year |
| % thought market saturation was a challenge | 19% | 37% | 39% | 52% |
| # of attendees | <2K | 2-5K | 5-10K | 10-50K | >50K |
| % thought market saturation was an issue | 13% | 10% | 25% | 48% | 45% |
Creative marketing is the best way to stand out from the competition. As a result, festivals trying to differentiate themselves also ranked reaching a new audience and knowing where to spend marketing dollars as major concerns. In the modern age of social media and infinite websites, finding the right places to advertise and the right way to speak to fans is harder than ever.
A recent study shows that one of the best places to speak to festival fans is on Twitter. People who tweet about music festivals are 34% more likely to tweet at least five times per day, and are 16% more likely to have over 1,000 followers than the average Twitter user. Not only is social where the chatter is, it’s where the money is as well. At Eventbrite, we’ve seen that each tweet about a music event leads to 28 event views and $2.18 in additional ticket sales.
Industry Tip:
Hone your hashtag: Unfortunately, among the top 10 most discussed music festivals on social media in 2013-2014, only 19% of posts contained branded hashtags. This means organizers didn’t see four out of five posts driving fans to their fest. To track and engage with more posts, choose a hashtag that’s easy to remember and clearly related to your fest, and use it consistently wherever you post. For more on how to use a conversation analysis of 20 million posts about music festivals to inform your social strategy, check out Top 2014 Music Festival Trends and Insights.
Conclusion
Some challenges facing fests are universal and timeless; others are niche and unique to the modern era of music. Smaller festivals are looking to grow by reaching a new audience, while making a profit tops the list for mid-sized festivals. Larger festivals with over 10,000 attendees are more concerned with competition and booking new or unique top talent and acts. For the biggest festivals, the pressure is on to deliver a unique experience that will convince fans to drop major dough on their festival.
So how do these festivals go about gathering a crowd in a crowded market? Stay tuned to find out which fests are most challenged by the increasingly saturated market, and how fest professionals actually feel about large acquisitions in the industry.
The International Music Festival Conference, taking place December 13-15, 2015 in San Diego, California, is the only conference for music and film festival professionals and entertainment executives to network, learn from one another, establish partnerships, and understand the latest trends in festivals, music and film.
The post The Top 3 Challenges Facing Music Festivals — And How to Overcome Them appeared first on Eventbrite : Education.
