Bear Market Blues: The Effect of an Economic Crisis on Music Festivals

As we are all aware, there is currently an economic crisis plaguing the United States as well as most of the world. Obviously, in times like this, many are forced to make certain financial sacrifices by spending what they have on necessities, and dismissing other, more pleasurable wants and desires. Unfortunately, this means that the time and money it takes to attend most music festivals is no longer affordable to numbers of potential patrons. While pondering how, and to what degree music festivals would be affected by the crisis, I decided to search through the blogosphere in an attempt to find some answers. What I found, however, was not a simple, cut and dry explanation. Using two excellent sources in particular, (both of which were published on October 24, 2008), I became aware of some very interesting, and very different theories as to what the outcome may be. The first post I looked at is entitled "Bands at New York's CMJ Music Festival Eye Economy" by Robert Gibbons, a reporter for the news service Reuters Group Limited. In his article, Gibbons focuses specifically on a particular festival put on in New York City by the College Music Journal and how the bands as well as the fans have been affected by the economy as far as attendance is concerned. Then, in addition to Gibbons' piece, I looked at an optimistic post by Dan Ruby, a writer for the Festival Preview website, entitled "Why Festivals Will Survive the Coming Recession." In it, Ruby discusses how, although some festival's sales fell during this last summer, the current economic difficulties may have done some good for the music community in the long run. Also, since both of these posts were written after the end of 2008's "festival season" (summertime), I compared both different outlooks on what's happening and what's to come with what was predicted by Steve Knopper, a writer for Rolling Stone, in his article "Gas Prices, Economy Shake Sales for Summer Tours" which was published in July, at the height of the time in which these events normally take place. After looking at the different aspects of each viewpoint I commented on both of these writer's posts, and have provided those comments below.

"Bands at New York's CMJ Music Festival Eye Economy"
Comment:
Thank you for forming an interesting and informative argument concerning the effects of our current economic struggle on the world of music festivals. I think that you make an excellent point on the matter pertaining to the "music industry's dramatic transformation." Given that artist's work is being so easily downloaded for free, whether illegally or not, they must make the majority of their profits some other way now, and it makes logical sense that ticket sales from live shows would be their next biggest means of earning. Plus, they always make quite a bit by selling merchandise at their events as well. The concern that arises from this new structure of the industry is, as you quote Matt McDonald, the vice president of CMJ Network as saying, "Are people still going to have the entertainment budget to go out, spend money for tickets and beer, merchandise from the band? That's certainly a big question." As the economy plummets, and the average citizen is forced to regulate their budget, will people still come out for shows and festivals like they did before? In July, Steve Knopper of Rolling Stone reported that "gas prices are eating away at the summer-concert business, with top festivals and tours taking unexpected box-office hits over the past few months." According to these findings it would appear as though festivals truly have gone into a slump along with the economy. On the other hand, however, many legitimate sources that I looked at concerning the subject reported that there were more music festivals in 2008 than ever before. So even though the numbers at some festivals are lower, they could be accounted for elsewhere. Looked at from this point of view it seems possible that the attendance of fans is not the biggest issue here, but rather the other problem that you bring up, the cost of traveling for the bands. As you say, "Higher costs, including gasoline, food, hotels and equipment, have cut into an already slim profit margin for up-and-coming acts." If this is the case, that crowds are spread so thin by the increased amount of festivals coupled with fans' lack of funds to afford the shows, that bands are not making enough of a profit to even play, then that could have a serious problem.

"Why Festivals Will Survive the Coming Recession"
Comment:
First, let me thank you for retaining such a positive attitude toward the future of music festivals. I have been researching what various bloggers think about the effects of the current economic crisis in relation to these events, and most of them have been very pessimistic. I must admit that I myself was rather skeptical when I started reading that 2008, in actuality, had more festivals than any year before given all the reports about how ticket sales have been down. As Steve Knopper of Rolling Stone reported all the way back in July, "In a year with more festivals than ever, the biggest have endured sales dips for the first time in years." Given the soaring gas prices, especially over Summer, it seems logical that festival organizers would want to put on more events so that they would be more easily accessible from further locations. As you say, "the dynamics in the music business motivated national promoters to aggressively move into new geographical markets with new festival brands." Also, you claim that "the next year or two will see retrenchment followed by continued growth in subsequent years." My question is whether or not you think that these new festivals which have sprung up will flourish as well, or will their respective audiences return to the larger, more well-established events once the recession has ended? In addition, do you believe that it might be possible for the festivals to be spread too thin? If there are so many that none make a large enough profit then a few years could be all that it takes to close a number of them down. In the end though, I completely agree with you that festivals will continue to thrive if for no other reason than the fact that they are relatively cheaper to attend than concerts, as well as the calling to "the continuing attraction of 'the festival lifestyle."