From Glastonbury to Green Man, this is a frustrating business and don’t expect to make a profit
Mention the word “profit” to a festival organiser and they laugh. Like buying a football club or investing in films, setting up a festival is an easy way to lose a lot of money.
So why do it? “Insanity probably,” according to John Giddings, who revived the Isle of Wight Festival in 2002, which he runs alongside Solo, his music promotion business.
At least he’s not alone. In 2002, Mr Giddings said, there were 400 festivals in the UK. That compares with about 1,000 planned for this year. Many of these have been bought up by large companies such as Global. This year, Live Nation bought a majority stake in the Isle of Wight Festival, but a few independents remain, plugging away in a fickle industry.
So how hard is it for independent events to turn a profit? “No one is going out of here with enormous amounts of money,” Fiona Stewart, owner and director of Green Man Festival in Wales, said. “Festivals in the Noughties made a lot of money. The playing field has changed dramatically due to the rising cost of artists.”
Glastonbury has the luxury of paying about 10 per cent of what other festivals pay for artists, thanks to its cachet and BBC coverage. They are, Mr Giddings said, “not in the same game as us. They can sell out without announcing who the hell is playing. We have to book acts and they cost a lot of money and we pray that those acts are a good draw in a field, even if it’s raining.”
On top of that come security costs, which rose this year after the terrorist attacks. The Isle of Wight Festival paid £1 million for police and security alone. Another 20 per cent of income goes on VAT. Three per cent goes to PRS, the music royalties agency. Then there is the not insubstantial risk posed by Britain’s unreliable climate. “You spend your whole weekend with a crick in your neck, looking at the sky.”
People go home early when the weather turns, so they are not spending money in bars; haulage and hire costs go up; and there can be more damage to equipment.
“The year we had bad weather, I had to pay £250,000 to build roads in to the car park,” Mr Giddings said. “So it certainly wasn’t profitable then. It’s like gambling on a horse. It can go well and it can go wrong.” Still, he makes margins of about 10 per cent to 15 per cent on the festival, which represents about a quarter of Solo’s overall revenue.
The Isle of Wight Festival took three years to break even, better than average, according to the Association of Independent Festivals, which says that it takes most festivals about four years before they cover their costs.
A festivalgoer at Glastonbury, which can sell out without even announcing which artists are playing
Ms Stewart, who has been running Green Man since 2005, disagrees with that suggestion. “If you are running any small business, it has got to break even in the first year and start making money in the second,” she said. “You shouldn’t be waiting years for something to be sustainable, otherwise you don’t have a concept.” Green Man has annual revenue of about £3.5 million with margins “a lot less” than 10 to 15 per cent.
She has chosen not to take any sponsorship, which cuts out a huge slice of potential income — “There’s a business argument that it does create something very different” — and is keen to support small businesses, such as local brewers, which she could not do if, for example, if she sold exclusive “pouring rights” to a large drinks company.
Green Man invites ticketholders to come to the site early and to use it as a base to explore Wales. “From the point of view of the economy in the area, it creates jobs. Lots of hotels and tourist attractions will employ extra people over the period of the festival.”
It does not, however, fill Green Man’s coffers. “If you create a festival setting and put in hot showers and all the rest of it, then encourage people to leave, you’re not going to make much money. I can make that choice because I own it. I understand that’s going to be a loss. I don’t have loads of people to answer to. That is the joy and fear of running an independent festival.”
She is careful to ensure that the festival is sustainable and that there is money in the bank. “I have a lot of responsibilities to do with paying 1,500 people that are on the payroll at Green Man every year. If I don’t deliver certain things, it’s so much part of the economy there that it could damage many businesses that rely on the festival.”
Green Man keeps costs low by doing as much as possible in-house. “We run our own bars, we do our own licensing, our own operations. Every time you pay a supplier you are paying 30 per cent to 40 per cent on top of your basic costs.”
Keeping a rein on outgoings is key, and that stretches to the names that appear to the all-important line-ups. . “You can’t afford to pay too much for the acts,” Mr Giddings said. “What people need to realise is that the audience pay you to come and you pay the artist to come, so it’s more important to look after the audience because you want to make them loyal. You look after them properly, give them decent loos, decent security.”
Ms Stewart agreed: “You might have a heavenly line-up, but when they leave, if they’ve had a horrible experience through hygiene or other things, that’s what they remember.”
It also will become common knowledge. Paul Reed, general manager of the AIF, said: “People can be very vocal with their criticism now. Social media tends to be the vocal minority of people who haven’t had a great experience and the media will pick up on that.”
Indeed, there is so much that can go wrong, it seems remarkable that anyone would ever choose to run a festival. Yet, for Ms Stewart, there are moments during the weekend that make it all worthwhile: “It’s a marvellous thing when you see people seeing an artist for the first time.
“You sit on the wings and see people shuffling around, then suddenly they will engage with it and they all move a little bit forward to the stage. For people who do bonkers things like this, to see that is a fantastic thing. That’s why we do it, really.”
This business is not a land of milk and honey for everyone
In amongst the festival successes there have been some spectacular failures (Josephine Moulds writes).
According to Paul Reed, general manager of the Association of Independent Festivals: “Four to five years ago, the market did feel quite oversaturated. Like any market it always corrects itself, quite swiftly as well.”
Amid that market correction players bowed out gracefully while others collapsed in a mire of debt, leaving bands unpaid and ticketholders fuming.
All Tomorrow’s Parties in its heyday at Butlins, Minehead
All Tomorrow’s Parties, for one, gained a cult following in the 2000s for its holiday camp weekenders with avant garde line-ups. Now its name in the industry is notorious. The company fell into liquidation in 2012, leaving a trail of disgruntled creditors behind it. Undeterred, the founders set up a new business, which fell into more financial difficulties amid chaotic planning and cancelled events. In June last year, they announced it was closing for good.
Mr Reed believes that ATP’s story has had a lasting impact. This year a new entrant, Safe as Milk, tried to revive the format with a line-up of leftfield acts for a weekender at Pontins in Prestatyn. A month before the festival was due to start, it cancelled amid low ticket sales.
“People equated it with the ATP brand too closely and didn’t have any confidence in it as a result, because unfortunately ATP didn’t quit while they were ahead,” Mr Reed said. “They had a number of events that had to be cancelled at late notice and people’s confidence in those events were destroyed.”