More than 200 music festivals are held in the U.S. annually in front of millions of fans, and with ticket prices usually fetching hundreds of dollars, there's a lot of money to be made. This week, a few festivals have revealed the artists they've booked in 2014, which begs the question: Do lineups really matter?
After analyzing mountains of data to find an answer, I got more than I bargained for: Three lessons that blew what I thought I knew about music festivals out of the water.
Digging into the data
Attendance and profit rankings
The largest music festivals are just that: large. New Orleans' Essence Music Festival brought in 540,000 people over a four-day period last year, and stalwarts like Coachella and Lollapalooza typically average over 100,000 fans per day.
|10 Largest Music Festivals in the US, 2013|
|Festival||Location||No. of days||Avg. daily attendance (est.)||Pre-tax profit (est.)|
|Essence Music Festival||New Orleans||4||135,000||$6.36M|
|Electric Daisy Carnival||Las Vegas||3||115,000||$9.82M|
|CMA Music Festival||Nashville||4||80,000||$400K|
|**Austin City Limits||Austin, Tex.||6||75,000||$11.7M|
|Firefly Music Festival||Dover, Del.||3||65,000||$4.82M|
|***Burning Man||Black Rock Desert, Nev.||7||61,000||-|
Estimating profits isn't an exact science. Most companies only share snippets of information with the media. Still, the figures above help illustrate a few interesting insights below.
Lineup popularity rankings
In the next table, the biggest festivals are reranked by the popularity of their lineups over the past two years. The more chart-topping artists each had in 2012 and 2013, and the more platinum-selling artists it booked, the higher its lineup popularity score.
|Largest Music Festivals by Lineup Popularity, 2012-2013|
|*Attendance, Profit Ranks||Festival||**Popularity Score||Platinum % of Lineup|
|6th, 8th||CMA Music Festival||11.0||69%|
|9th, 7th||Firefly Music Festival||6.0||16%|
|1st, 6th||Essence Music Festival||4.0||24%|
|8th, 3rd||Austin City Limits||2.5||9%|
|2nd, 4th||Electric Daisy Carnival||2.5||3%|
Three lessons I learned
While there's always room to debate methodologies, it's tough to miss the broader relationship at play here.
1. Popular lineups don't always mean bigger festivals, nor do they guarantee profits.
In fact, three of the largest festivals by attendance -- Essence, Coachella, and Electric Daisy -- ranked in the bottom half of lineup popularity.
The same is true from a profitability standpoint. Festivals spanning two weekends typically make more money regardless of lineup popularity. The six-day-long Coachella, for example, made $31 million in estimated profits last year. Lollapalooza, which lasts just three days, earned half as much.
Ticket sales ultimately drive profits, and the more days you can keep customers on festival grounds, the better it is for business. Assuming set-up costs are relatively fixed, the additional expense of adding extra days is minimal. This may explain why Coachella added a second weekend in 2012, why Austin City Limits did the same thing last year, and why Firefly is extending to four days this year.
Of course, if ticket prices are too low, there's less money to be had. Events like Essence and CMA, which charge an average of 60% less than their peers, generate much smaller profit margins as a result.
So, what else drives crowds?
2. Other factors, like atmosphere and reputation, also affect attendance and profitability.
Electric Daisy is second in attendance and fourth in profitability, yet tied for last in lineup popularity. According to one Quora user, it's the atmosphere that makes it so special.
What blew me away more than the music...was the atmosphere and the people. They are truly incredible. Everyone is extremely friendly, always enthusiastic and willing to chat, and there is a genuine culture built around unity and friendship.
Likewise, a festival's reputation can also affect attendance and the amount of money it makes.
Lollapalooza has been around for over two decades, and regularly brings in 250,000-plus over its three-day schedule. It made an estimated $15.3 million in 2013.
Attendance and proceeds are less at younger festivals like Firefly, which had 65,000 a day and close to $5 million in estimated profits last year.
SFX Entertainment's (NASDAQOTH:SFXEQ) TomorrowWorld and Live Nation's (NYSE:LYV) Made in America are in a nearly identical situation, despite the fact that each books a similar number of elite artists as their larger peers.
This brings me to my next point.
3. There's a limited amount of top talent available in the summer festival circuit.
Whether it was The Black Keys in 2012, Calvin Harris last year, or OutKast this summer, it always seems like the best festival bands are in short supply.
In a way, they are. It's no secret that some artists hate the things. Others simply don't tour that often, or are relegated to one or two exclusive festivals a year. You'll probably never see U2 or Daft Punk at one, for example, and if you do, it'd be extremely rare.
This phenomenon is even evident in the data. In 2013, Bonnaroo, Lollapalooza, and Coachella each presented 170 acts, 13 of whom were platinum artists, on average. By comparison, Firefly had an identical number of platinum-selling names, but had just 73 total artists booked.
Where do we go from here?
Most of the biggest music festivals in the U.S. are well established. If there are years when their lineups suffer, attendance and profits should keep chugging along due to reputation, and in some cases, atmosphere.
If the smaller names do decide to get bigger, though, I expect them to follow in the footsteps of Coachella and Austin City Limits. They'll likely expand their roster of lesser-known, lower-end bands while booking a similar number of top-tier acts as previous years.
As for me, I'm getting married to a Firefly staffer in October, so you'll find me in Dover, Delaware this summer.