Music festivals: a high-risk business | FT Film

Music festivals: a high-risk business | FT Film

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As an independent festival it's a risky, risky game. It's not for the faint-hearted. This is the first year we've properly sold out because there was such a demand for being in a field and people coming together. People have missed that. You can share a real connection with an audience when there's someone live.

There's nothing really like that. This film is about the risky business of music festivals, about the people who run them and the people who rely on them, about how they survive in normal times and how they can survive the pandemic. Festivals are a multi-million pound global industry. And 2019 was a record year.

In the UK, nearly 1,000 festivals contributed £1.76bn to the economy, supporting around 85,000 jobs. But in 2020, Covid brought it all to a halt. Glastonbury was one of the first to cancel. And it had a cascading effect.

In 2021 organisers started out more hopeful. Alex Trenchard is the founder of Standon Calling, an independent festival north of London. It's one of the first to attempt going ahead since the pandemic.

But with hours to go will he make it? Even now he's making calls to suppliers. Because of Covid our suppliers are wanting more payment up front. But obviously, because of Covid and uncertainty our ticket agents are more nervous about extending funds.

And so I've be making a lot of calls to suppliers. Everyone's kind of having to take each other a bit on trust. Even without a pandemic to contend with festivals are a high-risk business. Alex, the son of Viscount Trenchard, was lucky. He was able to start up on land part owned by his family. The first time we put the festival on it wasn't even a festival.

It was a party for 500 people. And at about 10pm the headliner was on, on the lawn of the house here. And a gust of wind came and just blew the stage over into the fields with the headline act on it.

That was the first time we tried to do live music. We didn't really know what we were doing. Some of the major events, like Latitude and British Summer Time, are owned by global live events companies like Live Nation and AEG.

But other festivals, like Standon Calling, remain fairly independent. No other company has a controlling stake in them. WOMAD was one of the pioneers. It started in the early '80s and aimed to bring world music to a western audience. Someone had the mad idea, well let's create a festival. And let's bring all those artists here.

Let's bring an audience here. And we will all be rich. That's not how the story ended. It was a financial disaster. I think WOMAD's gone bankrupt three times in its history...

not for a very long time. But the risks are huge. Everybody was making it up as they went along.

And mistakes were made. But lessons were learned, and triumphs were had. There are many newer entrants to the market, like Strawberries and Cream, which started out as an independent festival too. We were 21, 22. Didn't know anything from the insurance side to the toilets to what it takes to build a festival site.

We just saw the tickets. And with that ticket money, we kind of guessed at how much we could make on... we could spend on a line-up and spend on events and that sort of thing. So it was a... yeah, that first jump was a big risk.

In the very first one, whilst the show was going on, some of the contractors realised they weren't going to get paid. So they started taking their stages down. And some of the artists then had to perform on the ground. Alex took risks in the early days. And those risks led to jail in 2011. He had used the company credit card from his employer Tesco to pay off hundreds of thousands of pounds of debt.

I naively thought that the more acts I'd book the more people would come. Doesn't work like that. We were losing a lot of money. And I didn't really know what to do.

I started to use my company credit card to pay off the debts, thinking I'd pay it back one day. And of course that never happened because the festival lost more and more money. And eventually, after a couple of years, this all came to light.

And that was a good thing. It allowed me to go to prison for 11 months and think about things. His festival continued with tighter financial controls. The summer pandemic is the latest threat. Headliner Arlo Parks has had to pull out.

And self-isolation has forced hundreds of ticket holders to stay at home. Standon Calling isn't one of the government's pandemic test events. So he's also had to go ahead without the usual festival cancellation insurance.

But despite all that the festival is about to open. I walked up the hill to look down on the site. And I did have a moment. I did choke. And I couldn't quite believe it that we were about to open.

And some of the issues we've had today meant that we're not quite there... certain people not being able to make it due to the pandemic, this kind of thing. But the fact is we are there. We're about to open. I can hear sound checks on Laundry Meadows Stage.

And hopefully, the beer is flowing and people put a smile on their face because God, we've needed it after the last 16 months. I can't wait to know what you think about things. Believe me, I will always be there, so you can tell me anything and I'll listen. To go ahead is great for the 17,000 ticket holders. But it's essential for Alex's survival. And there are many more people that depend on festivals for a living, including the acts.

Getting the line-up right is essential for ticket sales. There's three types of artists. There's your headliners. Then there's the acts that you think are going to break and become huge but aren't when you book them in October. And then there's like your heritage acts that have been around for a few years. And our first thing we'll try and do is get a line-up out before Christmas because the sooner you can get it out, the sooner you're out there, the more people know about you, what you're doing, and the more likely you are to sell tickets.

Because nothing stays the same for too long anyway. It's all... And for the bands performing live is all important. It's extremely difficult to make a living out of streaming. But festivals can be more lucrative than one-off shows as well as a way to attract new fans.

Live work is my main income. So I do it all the time in various forms with various groups, not always with the same group, lots of different musicians, and lots of different set-ups. So yeah, live work is my job. Each summer we'll do different amounts of festivals.

It would be a sad summer without it. Financially, I would say it's a sizeable chunk, at least half. For artists, live music is a crucial form of their revenues because of the rise of streaming and the ways that digital music is now sold. They make often very little money, actually, out of their own music when it's sold to people. So instead they've had to increasingly rely upon live music and, in particular, festivals, where they get the big numbers in order to make their money. And they can make big sums from playing these big festivals as well.

At Standon Calling, alongside Hot Chip and Sister Sledge, are Bristol-based group Elder Island. Their talent manager is Ross Patel. Because of the way that festivals are structured often the fees are better from a festival than you would get from the headline show. So sometimes they can be two or three times the amount of money that you could make from a headline show. You're in amongst a lot of other artists, often associated with them.

So there's an opportunity to discover new talent and to be discovered by the audiences that are there to see other artists perform. Learn to make it till morning. I think that's the nice thing about festivals. You make new fans. People come to discover new things.

And they will just stumble past you playing and be like, wow, what's this, check it out, and then follow you. And then you've made a new fan, which is brilliant. Like two years ago I made basically all of my money from live events in Iceland. And since Covid I made basically all of my money from non-live events. So I don't really know how touring and festivals and stuff like that is going to play into my financials yet.

Also at risk when festivals suffer is the network of people working behind the scenes. Festivals are a huge employer in the UK and around Europe. They employ all sorts of different people from the creative industries, people who would often be working on, say, film sets and TV studio sets. It takes all sorts of skill-sets to make these things happen, whether that's trained medical staff or trained security staff through to the creative teams who make things look incredible and do the big decor pieces and the big set builds. But also you have all the people selling the hot dogs, the burgers, the beers, the T-shirts. These are all important parts of local economies.

On a festival about the size of Standon Calling, which is 17,000 capacity, we have up to about 1,500 staff, guests, and performers. Building the show currently we are at about 220 people on site. And as you can imagine, the larger the shows the bigger the teams become to build them. They employ tens of thousands of people every year, particularly those in part-time work. For them, they depend on their livelihood and generate a lot of money. In fact, it's estimated that a 5,000 capacity festival is worth around £1.1m to the local area.

A 110,000 capacity festival can be worth over £27m. Production manager Iain Mackie says in the summertime he works full time on festivals. And he surrounds himself with people he can count on.

Covid hit hard. It's not like a normal job. They're your friends.

You look after each other. It's different. It's a family. It was really tough. I had to let staff go.

I had to sack people. And that was horrific. I hated doing it.

It was tough. I kept paying them for a short time from 2020. For about six months I managed to keep paying them. But eventually, I just had to stop.

And they had to go and find other work. They went driving trucks, driving Amazon, finding something else to do. But we're still here, just. If we hadn't received any grants, which we got one fairly modest grant, I wouldn't still be in business. To break into profit festivals are also dependent on their cut from on-site vendors, including food and drink. Will Davis says organisers take a 30 per cent to 35 per cent cut, so margins are tight.

In the festival season we make our money for the year. So we usually work through from May through till late September is kind of our... well, it is definitely our festival season. So every weekend it's event into event into event.

And it's delightful. Delightful is the word. I love it. If festival season didn't happen this year then I really couldn't see a way into next year and maybe ever doing a festival again, to be honest.

With tight margins organisers are always looking to reduce risk. I would say once every few years you have a triumphant year. And that goes really well, and that sets you up for the next two or three years. And then the next two or three or four years, you're living hand-to-mouth because it doesn't always go according to plan. It is an incredibly risky business model. Your entire business is concentrated into year-round planning for a three-day event.

And we know that the average cost is over £6m. Those three big revenue generators... the tickets, the sponsorship, and the bar money are very variable. And you can never guarantee them. The profit sits in the food and the beer and all the merch. So it's a very narrow line between profit and loss in the industry.

The bulk of all that cost goes on making the event possible. Every person you bring in above breakeven you're doing really well. But equally, because of that every person you're not, you're below breakeven, you can equally do very badly. It's very finite margins, which is why most players in the market are part of larger organisations now. For Alex, reducing risk has meant letting a larger events business, Broadwick Live, take a small stake in Standon Calling.

WOMAD spreads the risk by holding festivals around the world. And last year, Strawberries and Cream integrated with a subsidiary of Sony Music. It's really changed the kind of dynamic of how we operate as a company. Obviously, we're still kind of frugal and move like an independent in many ways.

But you have kind of the confidence, which I think is the key, to make the decisions that really move the needle. One thing organisers rely on is festival insurance. It includes protection against cancellation because of bad weather. But during the pandemic the insurance market collapsed. And the UK government wasn't stepping in with a backstop. What's happened is there is this huge reticence, inability to write a communicable disease Covid cover on standard cancellation policies because there have been such massive losses.

To have your event cancelled two or three days before, you could be 90 per cent of your costs. And that could bankrupt you. Normally, it would be full of people. We can pack the space in certain areas, make the space wide in other areas. So you create the movement and flow and the colour and the excitement.

It feels very sad to be here without all of that going on, I have to say. We could have taken the risk to happen this year. But the risk was that if it failed that's it. We're almost finished.

Government's view was that they would look at it once festivals were operational. But that misses the point of being able to plan with confidence. And that's why you've seen so many cancellations. 2021 was this strange year.

As such, anyone who had a festival lined up was in this sort of limbo of not knowing whether or not their festival could go ahead or not, whether or not the government would support them or not, whether or not they can get any insurance or not. For many, they decided not to take the risk. One of the hardest parts of that, for me, was phoning up contractors who had stood by us and saying, look, we have to pull. We can't go ahead. Legally, we can't go ahead.

Financially, we can't go ahead. And they said, well, that's us. We're finished. We're closed now. We can't go on.

For Alex, after cancelling in 2020 he decided he had to go ahead this year, even without insurance. I mean, if we went down now it would be a huge question mark. I'm not sure we could recover. But then again, if we hadn't continued to push forward... festival business is something that needs to happen.

If it doesn't happen for a while it's hard to bring it back. It's hard to bring the people back. It's a creative undertaking. And you need to keep your people to do that.

Otherwise, it's just a stage in a field. In early August, late in the season, the UK government did finally agree to become insurer of last resort for festivals. It'd come too late for Alex, who was insured against cancellation for extreme bad weather but not Covid. At Standon Calling, the fans are expected to arrive with proof of negative tests. What's been hard is dealing with requests for refunds from people who didn't come, not because of positive tests but because they decided they just didn't want to take the risk. Alex thinks it's gone well.

The queues are very, very smooth. The app caught about 120 positive cases that could have made it into the show. It's good to know we have a system that worked really well. But on Sunday afternoon the site is hit by a lightning storm and torrential rain.

We got through about 7pm when we decided that the flooding was making things too unsafe to continue. We then made the decision to stop the show, which was heartbreaking, especially after two years of everything that we've been working on. But at the same time, you've got to look on the positives. And at least it happened on a Sunday night and not on a Friday night.

He is crossing his fingers that many disappointed ticket holders will be willing to hold on until 2022. That's one of the things that Covid has created is a sort of spirit of working together. And people try and understand our position, and we try and understand theirs. So the rollover works well. And that way we get to celebrate with them next year.

While some have survived the pandemic so far, others won't return. I think there's going to be a big labour shortage and a big skills gap. A lot of people have taken either work in other industries and aren't coming back to festivals and events. Most people aren't on a salary. So they don't have that wage security like other industries.

And I hope that after this that changes, because when the gigs stopped I know people that were going hungry after two months. And that's terrible. I was able to teach over Zoom, which saved a lot of stress financially for me. Yeah. I think we will have maybe lost some great musicians because they won't have been able to adapt or they won't have been able to find a way to make it work. But where there is music, there is hope.

Thank you. I think the future half looks bright because people will always love live music and live events. And people want to be part of them. And I think the demand will still be there. It seems the risky business of festivals proves that sometimes it's about the love and not so much about the money. Well, I'm going to spend a week putting everything back together.

My kids go back to school in September. And that's when we start planning Standon Calling 2022.

2021-09-17 13:10

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