The corporate future of music festivals?

Music festivals are in trouble. All over the place. We were first alerted to this by an article in the Dutch media, highlighting the difficult choice for major music festivals -  cut costs or find big investors.

The first option is challenging with costs rising significantly since the pandemic, and at the same time consumers demanding that everything be bigger, better and louder. Our colleague Martijn Mulder highlights the problems of increased regulation and licensing fees, as well as the growing reluctance of consumers to pay more for already expensive events. Sustainability issues are also looming, as large festivals grapple with the costs of eco-friendly practices such as waste management, recycling initiatives, and reducing carbon footprints. Security costs continue to rise and competition for headline performers is becoming stiffer, putting pressure on artist fees.

As a result, some festivals are turning to large investors to cover the growing costs. In the long term, Martijn Mulder sees this as influencing the programming at festivals, with more popular acts to generate bigger crowds and greater returns. This is likely to marginalize alternative and niche performers.

There is also growing concern about the effect of some festival investors. For example, KKR (Kohlberg Kravis Roberts) acquired Superstruct Entertainment, which owns and operates festivals including Field Day, Mighty Hoopla, Sónar and Tramlines, for approximately $1.3billion in 2024. Artists including Massive Attack and Brian Eno have boycotted KKR owned events over their alleged links to Israel. Similarly, Live Nation, which controls a large proportion of major music events, is owned by  BlackRock, Inc. a global investment management corporation. BlackRock has financed several Israel-based technology companies, including areas such as artificial intelligence, renewable energy, and cyber security. There are claims that some of this activity includes weapons capability. Links like these do not go down well with many festival-goers.

Across the Atlantic, similar festival challenges are reported by CNN, with falling ticket sales and greater competition leading to cancelled events. There is also a generational shift. Many major US festivals emerged in the 1990s, and are now struggling to keep up with contemporary consumer tastes. Whereas the previous generation of festivals enshrined the idea of people coming together for a communal experience, now it is more about the entertainment value. And these days, that is expensive.

Sónar Festival in Barcelona

With the corporatization of the festival industry, more emphasis is likely to be placed on generating bigger audiences and more turnover. Superstruct owns more than 80 music festivals across 10 countries, and generates annual revenue of more than €100 million. At the moment the management of these events might be independent, as Sónar, one of the events owned by Superstruct has argued: “Our independence remains intact across all areas that define Sónar’s identity: the artistic direction, management of the festival, and our ethical and cultural commitments, with which we have stood firm over the course of 32 years.” How long Sónar and other events owned by big investors will be able to maintain their independence remains to be seen.