a superstar problem

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On this week episode, we talked about the state of music festivals. Despite the record highs from live concert revenue, several well-known music festivals have canceled, while others have had lower demand and less impressive headliners. Is this a blip or a sign of what’s to come?

To discuss, I’m joined by friend of the show, Tati Cirisano from MIDiA Research. You can listen to us here or read a few highlights below.

TOGETHER WITH HUBSPOT​

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why would Beyonce return to the desert?

In April 2018, Beyonce was paid $4 million per weekend to give the performance of a lifetime at Coachella. Her fee was less than the $6.7 million that her Formation Tour grossed at Dodger Stadium in Los Angeles in 2016, but Coachella was a chance to make history— and even more money.

Beyonce was the first Black woman to headline Coachella and used the video footage to make a $20 million deal for her documentary, Homecoming, to Netflix. It made perfect sense.

But in 2023, Beyonce’s Renaissance Tour grossed over $45 million from ticket sales in three nights at SoFi Stadium in Inglewood. She also filmed the tour, distributed the concert film herself through AMC, and grossed $44 million from the box office revenue.

Why would Beyonce ever headline Coachella again?

In 2016, “Beychella” was a statement. In 2024, “Beychella” would be leaving money on the table.

The rise in demand for stadium and arena-level touring acts is one of several dynamics that have shifted the major music festival business. The festivals are less likely to command the A+ list superstars, so they now rely on the A- and even the B+ stars. It’s great to develop the next generation of stars who may become A+ listers, but it may also hurt the long-term demand for most festivals that can’t sell their shows without a strong lineup.

revisiting the music festival boom in the 2010s

Even before the pandemic, music festivals had started to hit their peak. By 2019, there were more articles and reports about canceled festivals, repetitive lineups, and oversaturation of the market. It was a sharp heel turn from the festival rise in the early 2010s.

The music festival boom was sparked by the millennial urge to experience Instagram-worthy events, coupled with the rise of EDM, and live music’s growing demand in the streaming era. But the festival boom went to another level thanks to a less discussed factor— the zero interest rate environment of the 2010s.

It was cheaper than ever for companies to borrow money. Some of that money was used to build and invest in fads that came and went, like electric scooter companies with unicorn-level valuations. Others used that money to buy NFTs and pet rocks. But hundreds of aspiring festival organizers used that money to launch their events. They received huge lines of credit to launch shows. These festivals often offered artists higher guarantees than they would be able to earn from a standalone show.

With the relatively low barriers to entry, these festivals popped up everywhere, but they weren’t sustainable. These events take time to build! A newer music festival may feature similar artists to those that performed at Coachella. The festival may even take place in a desert-like setting like Coachella. But that doesn’t make it Coachella. According to critics, the first few reviews of Coachella's early shows were quite critical. How many new festival organizers, and their deep-pocketed backers, are willing to wait that long?

We’ve now lost festivals like Made In America, Firefly, Beale Street Music Festival, and countless others. The power law has kicked in. Major shows like Lollapalooza and Glastonbury can survive, but the newcomers need to have deep pockets for plenty of runways, like Soundstorm in Saudi Arabia.

But whether it’s a major festival from yesterday or today, they all will have a tougher time convincing the stadium-level A+ megastars to come back and headline their shows. The economics of the solo stadium tour runs are too lucrative to pass up. These festival organizers and promoters will have to hope that audiences are fine with the next tier below.

Listen for the rest of our episode for more insights on:

• the future of genre-specific festivals like Rolling Loud or Stagecoach
• why so many artist-led festivals have came and went
• Gen Z’s relationship to festivals (compared to millennials)

Chartmetric stat of the week

On April 16, 2023, Frank Ocean gave one of the more forgettable Coachella headlining performances (so forgettable, that he was replaced on the second weekend by blink-182!). But Ocean's Spotify Monthly Listeners increased over 9% after his show, and have grown over 36% in the past year, reaching 33.42M listeners.

That Coachella bump still has power, regardless of how good the performance was.

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money moves

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