The economics of music festivals
- 10 television actors who turned to movies
- Bond yields fall after RBI cancels open market sale of debt
- Markets set to be bullish this week, investors to watch Fed minutes, oil prices
- London’s iconic red buses to run on biofuel made from old coffee
- Review: Jabra Elite Sport (2017) is not quite in the Apple AirPod league, but makes a strong point
It’s that time of the year. You have dusted off your flower crown, picked out clothes you’d never wear on a normal day, and practised “heart hands” till your hands hurt. You’re readying to go on that great annual pilgrimage—the music festival. It’s going to be the best, the biggest, the baddest edition yet. And somewhere between paying the Rs4,000 entry, buying that Rs500 LED bubble gun and a little before passing out from drinking your fourth Rs800 vodka bucket, you look around at the 20,000-strong crowd chanting Nucleya’s name and think, “Can you imagine the money these festivals are making?”
Well, chew on these numbers. Last year, Coachella, the US’ biggest music festival, raked in $84.26 million (around Rs575 crore), miles ahead of the next highest-grossing fest, San Francisco’s Outside Lands, which brought in $24.3 million. Coachella was attended by 198,000 people, to catch acts like AC/DC, Jack White, Drake and Florence and the Machine; 70,000 attended Outside Lands. Stagecoach Festival in Indio, California, brought in $21.88 million over three days with around 70,000 attendees.
In India, over 25 big-ticket festivals now happen every year, up from two 20 years ago. If industry numbers are to be believed, up to 1.5 million unique attendees (individual entries not counting repeat ones) are buying tickets to these fests. Sunburn festival, held annually in Goa, reported a footfall of 350,000 in 2015, with tickets starting at Rs7,250. Its rival, Viacom’s VH1 Supersonic, claimed the same number of people over its main festival in Goa and auxiliary events all over the country. Ask industry punters about the current size of the music festival market in India and they’ll throw around figures from Rs250-500 crore. It’s easy to be taken in by all the chest thumping—it’s a lot of big numbers. It’s also a lot of hot air.
“Rs150 crore is the highest estimate for the festival market today,” says Vijay Nair, CEO of OML, the company that organizes Bacardi NH7 Weekender. Nair is one of the very few promoters willing to go public with his numbers. “I know what we make, and I know what Sunburn makes, because we’re friends, and we are two-thirds of the music fest business in the country. The remaining 30% is divided between festivals like VH1 Supersonic, Enchanted Valley Carnival and the smaller ones.” But, here’s the shocker. “We’re the only profitable festival in the country, currently. That’s just a fact; having known every other festival and what they do, everybody is in debt at this point of time.”
It’s almost impossible to believe; to the outsider, it looks like a booming market. Every year, there’s a new festival announced. Last year, music giant Universal Music Group bought a 50% stake in Enchanted Valley Carnival that takes place in Aamby Valley in Maharashtra. Devraj Sanyal, MD and CEO, UMG South Asia, who was also co-founder of Sunburn, led the deal. “For me, after my years with Sunburn, it was logical to get my own festival. My options were to build my own or acquire. I chose to acquire as that was the smart business thing to do,” says Sanyal. But given the volatility of the market and profitability dancing on a knife edge, did it make sense to invest in a festival at this point in time?
“There is never a good time to invest,” says Sanyal. “You make the decision and then make that decision work for you. It’s my fundamental business ethic and it’s served me well in my 22 odd years in the business.”
It sounds great, but the truth is that most music festivals in the country have folded up. Independence Rock, India’s oldest festival that ran for 26 years, shut shop after sponsorships dried up. Great Indian Rock Festival in Delhi called it a day after 15 years with the death of founder Amit Saigal in 2012. Storm Festival in Bengaluru folded up in three years, Rock in India in five, and Ragasthan in two years. Invasion Festival, OML’s EDM experiment, “lost a of lot of money when we did Prodigy in the first year and with David Guetta in the second year, we recovered the whole thing. Then, both my partner and I said fuck it, because we saw the trend going completely south,” says Nair. Eastwind ran for one edition, as did metal festival BIG69. It’s a long game, and it takes a tremendous amount of money to see a festival through to profitability. “Right now, music festivals won’t make money,” says Arpito Gope, former head of activation and events at Rolling Stone India. “You need strong financials, either funding from someone, or your dad has to have money, because people aren’t attending in large enough numbers yet to be able to support the music festivals.”
Moreover, music festivals today are barely about the music—it’s about selling an experience. And this experience is expensive. A fest today needs its own mini “city”, a space that can accommodate, say, the 350,000 people you’re expecting. That’s venue cost that varies enormously with the city it’s held in. A ground is Mumbai, for instance, will cost you three times what it will in Pune. The festival acts need to be spread across at least three stages, each with its own décor, sound systems, barricades, bars and pyrotechnics. You need to hire security for crowd control and standby medics and emergency help. You have to set up food stalls and merchandise stalls. Then there are art installations that people can take selfies around. These are all production costs. The other big chunk is artiste costs, especially for international artistes, which includes flights for the band and crew, excess baggage—and that can rack up very quickly with musical equipment—five-star accommodation and local travel. Then there’s insurance for unpredictable eventualities like strikes, protests and bad weather; taxes; licensing fees and this is without even venturing into marketing, which is a whole other beast.
This is where India has an advantage. Traditionally, festivals in the country have been structured around the sponsorship model, as opposed to a ticketing model as followed internationally, where all revenue is dependent on the number of people you bring to the festival. Sponsorships subsidize costs significantly, so organizers are not dependent on footfalls to bring in the revenue. Weekender is the prime example of this model, where up to 70% of income is from sponsors and 30% from ticket sales, a ratio Nair hopes to bring to 50-50 in the next few years. Bacardi has worked to build a near-inseparable relationship with the experience—today festival-goers steal Bacardi drink buckets as souvenirs to mark their memories (or lack of) of Weekender. On the other hand, Magnetic Fields festival in Rajasthan, which combines music and glamping against the backdrop of the 17th-century Alsisar Mahal, works on the ticketing model. Founder Munbir Chawla believes this is the model that all festivals should aspire to. “It’s not sustainable to be so reliant on sponsors and therefore lose control over your event. Bacardi NH7 Weekender doesn’t serve beer, for example. We never wanted to not be able to do what we want.” It’s worked out well for Magnetic Fields, which went from a small, hipster carnival in 2013 to a must-attend event in four years, almost solely by word of mouth. However, the festival is still not profitable. “We’re hoping to maybe break even this year. But even that’s up in the air,” say Chawla.
There’s also the challenge of scaling up, and EDM festivals have it particularly hard because of rising artiste costs. Sunburn and VH1 Supersonic have consistently brought down the world’s biggest DJs—Tiesto, Martin Garrix, Dimitri Vegas and Like Mike, Hardwell, David Guetta and more—all of whom command from $100,000-350,000 a show. To be profitable, these festivals have to draw more people every year and to bring more people in, they have to book bigger artistes. It’s a self-devouring cycle of debt.
Experiential festivals like Weekender and Magnetic Fields have it a little easier, where the artistes are not at the heart of the draw. “We’re playing the slow game; we knew exactly what we were getting into. We’re never going to grow from 1,000 to 4,000 to 8,000 to 12,000 punters,” says Chawla. “We’re growing, but as a ‘community’ and that’s why people come back year on year.”
The other big challenge is simultaneously taking on government apathy and active interference. From the relentless rigmarole of landing licences to “bandobast fees” and pulling permissions at the last minute because of unpaid bribes, the government machinery wields a hefty lathi. Elsewhere in the world, music festivals are money spinners for the local economy, generating tremendous income and jobs from transport, hospitality and tax revenue. Consider these numbers. The Electric Daisy Carnival, the US’ largest EDM event, contributed around $350 million to the local Clark County in 2015 and created 3,270 full-time jobs. Since 2011, the festival’s revenue impact on the local economy is pegged at $1.3 billion, according to US-based independent research firm Beacon Economics. In India, for local governments, music festivals are a nuisance to be tolerated. Both Sunburn and VH1 Supersonic have moved their festivals to Pune this year, from Goa, because the government wouldn’t issue permissions, citing unpaid dues and hiked fees. In a statement on their Facebook page, Sunburn said, “This year the story changed a bit, maybe due to infrastructure constraints or forthcoming elections. With months having passed since our application was filed for #Sunburn10 to be held in Goa; we still wait for an official response from the Goa Government and local authorities. We have been waiting patiently for months....” It’s a huge setback for the festival as it will have to start the infrastructure and investment cycle all over again in a new city, pushing profitability further away.
But despite what seems like overwhelming odds, promoters are bullish on the future of music festivals, on account of the population, rising disposable incomes and optimization of technology. “With data getting smarter all the time, in the next 10 years I’ll know exactly who the 100,000 people coming to my festival are. There will be bidding on ticket prices, dynamic pricing on tickets, secondary markets, crowdsourced lineups, the business will change quite dramatically,” says Nair. Sanyal, too, sees a bright future in the camping festival format. “I believe as a nation we are supremely young and emulate what our millennial counterparts do everywhere else in the world. Fans actually buy tickets to go see their stars, spend real money to travel to these festivals, spend money on F&B and accommodation, and these numbers are fairly high, so I’m very bullish about this business.”
The first Indian rock music festival
To trace the roots of the Indian music festival scene, you have to go back not to 1986, when Independence Rock first kicked off, but to 1968, when the Imperial Tobacco Company (now ITC) initiated a contest to promote its menthol cigarettes to the rock-and-roll generation. The Simla Beat Contest ran yearly from 1968- 1972, with bands competing regionally, then making their way to Mumbai to battle it out at the finale at Shanmukhananda Hall. It was a fiercely contested competition featuring the country’s biggest bands—The Fentones from Shillong, Great Bear from Kolkata, The Confusions from Chennai and Dinosaur from Bengaluru, among others. Much of the competition’s history is lost, but its legacy lives on in a couple of LPs issued in the last two years of the contest. Interestingly, for a time when Indian bands mostly just played covers of popular Led Zeppelin and Cream numbers, on ‘Simla Beat 1970-71’, original compositions outnumber the covers.
What to look forward to at the festivals this year
Bacardi NH7 Weekender, Pune
When: 2-4 December
Where: Life Republic, Pune
What to expect: A host of Indian and international indie acts, including Swedish singer-songwriter José González, 1990s classic hip-hop producer DJ Premier, old favourites Anoushka Shankar and Karsh Kale, and current EDM superstar Nucleya. Don’t miss Steven Wilson’s melancholic, immersive prog rock and Shankar Mahadevan’s set that explores the folk roots of Bollywood songs. Look out for a travelling art festival featuring young illustrators, sets by stand-up comics and interesting food discoveries.
Tickets: Rs2,500-4,000; Insider.in
When: 9-11 December
Where: Alsisar Mahal, Rajasthan
What to expect: Luxe camping under Rajasthan’s winter skies, plenty of experimental electronica, secret parties, interactive art installations and a riot of flower crowns. Highlights include neuroscientist and producer Floating Points’ experimental dance music, Helena Hauff’s outré techno jams, jazz in the palace dungeons, and a taste of Sandunes’ new album ‘Downstream’.
Tickets: Rs8,500-64,500; Magneticfields.in
Enchanted Valley Carnival
When: 17-18 December
Where: Aamby Valley City, Lonavala
What to expect: A range of genres from Bollywood to hip-hop and electronica. Bollywood gets top billing with Farhan Akhtar and Arijit Singh headlining Day 1 and 2, respectively, alongside US rapper Flo Rida’s hook-laden set and Norwegian DJ and producer Alan Walker. Outdoor camping is the festival’s main talking point, with accommodation ranging from simple two-man tents to luxury tents with showers.
Tickets: Rs1,000-40,000; Bookmyshow.com
When: 28-31 December
Where: Kesnand, Pune
What to expect: A new venue may mean smaller crowds, so this could be the most intimate Sunburn yet. Usual suspects Afrojack, Armin van Buuren, Axwell & Ingrosso and Dimitri Vegas & Like Mike will headline the four-day EDM festival, and a series of buildup gigs will see Martin Garrix, ‘DJ Mag’s’ No.1 DJ for 2016, play a series of smaller shows across the country.
Tickets: Rs2,000-14,500; Sunburn.in
When: 10-12 February
Where: Laxmi Lawns, Pune
What to expect: VH1 Supersonic moves to join its rival Sunburn in Pune, with one great change: the festival will now take place in February. The line-up is still to be announced, but given their legacy, expect to see at least one name from ‘DJ’s Mag’s’ Top 10 list of the best DJs in the world.
Tickets: Early bird festival passes start at Rs1,500; Gosupersonic.in