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Bigger audiences are attracting bigger investors. Although the global festivals industry is dominated by independent operators and entrepreneurs, bigger umbrella groups like Live Nation and Music Festivals have designs on becoming festival empires. Music Festivals owner Vince Power, who runs Spain's Benicàssim and Britain's Hop Farm festivals, raised $10.4 million on London's small-cap Alternative Investment Market in June to grow his festival business into a $160 million operation over the next five years. Music retailer HMV has also jumped into festivals in 2009 it bought live-music company MAMA Group, which hosts Britain's Great Escape and High Voltage as a way to revive its struggling brick-and-mortar business.
Still, the road to expansion is fraught with risk. Attracting artists big enough to fill hectares of empty pastures with fans is costly and requires a certain finesse. Outfitting an empty field with temporary infrastructure robust enough to accommodate tens of thousands of fans also isn't easy. And there's the threat of bad weather, which can wreak havoc on events where fans are unprepared for torrential downpours and muddy fields. Last year, when ash from an Icelandic volcano grounded flights across Europe, attendance at Power's Benicàssim festival plummeted. At Belgium's Pukkelpop festival in August, four people died and more than 70 were injured when strong winds from a thunderstorm caused a stage to collapse. Building a fan base also takes time. Newbie operators "don't realize that you're probably not going to sell 50,000 tickets in the first year," says Live Nation's Ridgeway, and cash-flow problems can occur when events don't sell out. Glastonbury has flirted with bankruptcy, most recently in 2008, when festival loyalists were turned off by the decision to headline the traditionally rock-oriented event with rapper Jay-Z.
Barring those pitfalls, the payoffs for well-executed festivals can be huge. Putting thousands of people in close quarters for two or three days creates an ideal sales environment for high-margin food, drink and merchandise vendors. And when the audience is big enough, corporate sponsors like Ford, Jack Daniel's and Intel come running.
Corporate involvement has taken its toll on festival culture. What was once the playground of '60s hippies is now a more mainstream affair, often flush with upscale amenities like babysitting services, waitstaff and rentable Winnebagos. But many of today's festivalgoers don't seem to mind. In fact, corporate backing can actually "make festivals seem less threatening" to mainstream audiences, says Andrew Bengry-Howell, a sociologist at the University of Southampton who co-authored a recent study on festival branding.
With money pouring in, more European festival operators are looking abroad, especially to the U.S. Surprisingly, the country that invented the concept with California's Monterey Pop in 1967 and New York's Woodstock in 1969 hosts only a handful of major pop events, including Tennessee's Bonnaroo and California's Coachella. "It's such a huge place, and it's underserved," says James Barton, who runs Creamfields, a popular 13-year-old electronic-music festival near Liverpool. Bonnaroo's 80,000 attendees this year paled in comparison with the 700,000 people who turned out for Poland's Przystanek Woodstock in April.
Crowds like that are drawing attention to untapped markets in Eastern Europe, Latin America and parts of Asia. Already Barton has expanded his Creamfields empire from the U.K. to 11 other countries, including Argentina, Australia and Malta. Sony Music bought a majority stake in Hungarian live-events group ShowTime Budapest last year to build on "the many synergies between the recorded and live-music industries," said Marton Brady, managing director of ShowTime Group. Ridgeway says Live Nation is looking at prospects in Australia, Dubai and Hong Kong. And Festivals Republic head Melvin Benn is eyeing China's Guangdong province, home to over 150 universities. "One would assume that a market like that could accommodate at least one big festival," he says. For a country with 200 million young people craving more access to pop culture, that's an understatement.
This article originally appeared in the November 14, 2011 issue of TIME Europe.