Which Kind of Music Festival Do You Want To Invest Like?
A Final Thought On The Value of Time Tested Consistent Value (3 min read)
THE MODERN WORLD OF MUSIC FESTIVALS
If anyone talked about a music festival prior to 1990, there was a 90% chance they were talking about the original Woodstock festival in 1969, billed as 3 Days of Peace and Music, that saw over 400,000 descend on White Lake, NY. In the 90’s, there were multiple efforts to tap into that “magic” (and financial opportunity) that gave birth to the modern world of music festivals. Today, Lollapalooza (began in 1991) and Coachella (1999) are two of the largest, most successful, and longest running annual music festivals, bringing in over $100 million each. From coast to coast, continent to continent, live outdoor music festivals have become a huge attraction, and a huge money maker.
But with extravagance come hiccups. If you’re one of the biggest and most successful, you’ve likely learned to minimize losses, but even Coachella earned negative headlines in 2019 when gunshots from an apparent drive-by shooting rang out at an afterparty. Woodstock’s attempt to rebrand in 1999 ended with massive fights, widespread fire, flipped vehicles, and rioting. In 2017, an “attempted” luxury festival in the Bahamas ended with no music and the promoter behind bars, facing over $100 million in damages. And most recently, there was the tragedy at the Astroworld Festival in 2021 where over 2,400 were injured and 10 were killed in Houston. The point is, as promoters try to go big, history has shown that there's money to be made but with it comes high risk if you don’t have your systems in place.
NEWPORT FOLK FEST: A MUSIC FESTIVAL THAT MUNGER WOULD APPROVE OF
Charlie Munger is 98 years old and I doubt he’s going to many music festivals these days, but I’m pretty confident he’d approve of the model the Newport Folk Festival has adopted under Executive Producer Jay Sweet. Most people only know of Newport Folk because of Dylan’s famous “gone electric” set in 1965, but since then, the festival has recast itself as one of the best, and most consistent, festivals in the country.
Rather than chasing the big stars or the big names, Newport Folk has dedicated itself to filling out a lineup with diverse artists who all bring something to the table. Where the big festivals pack in as many people as they can to see the likes of Beyonce, Harry Styles, and The Weeknd, Newport limits attendance to 30,000 and all tickets sell out in minutes, months before any of the artists are even announced. Unlike the big festivals that announce and advertise their headliners early and often, Newport doesn’t chase the big win on the coattails of a few but instead produces quality from top to bottom year in and year out that people can blindly trust. In fact, stars like Roger Waters (from Pink Floyd), James Taylor, Mumford and Sons, and Dolly Parton have actually been unannounced (secret) acts…to hammer home that idea of Newport trying to build something different to separate themselves from the pack.
When it comes to building that trust, the system Sweet uses is simple:
The philosophy is pretty easy. There are three criteria to play Newport and you have to meet two of the three or else you won’t ever get added to the bill. The first is I want you to play. The second is that the audience demands that you play, and the third is the artist wants to play. So if I want you to play and the artist wants to play, I don’t care if the audience has ever heard of this band or don’t want them to play. If the audience demands that the artist plays and the artist really wants to play, but I’ve never heard of the band – then we’ll give them a slot.
HAPPY ARTISTS = HAPPY CONCERTGOERS
The basic tenet for a good property management company is that happy tenants make happy clients. The property owners being serviced are going to be happy with longterm, hassle free tenancy and the key to that is valuing your tenants and managing the property with their well-being in mind. Similarly, Newport is different from other festivals because the artists are happy/excited to play there…they do not have a cash incentive to come…they simply want to be a part of it. Sweet shares that the bigger names that play Newport the last weekend of July could easily get paid 10 times more to play elsewhere, but they choose the storied folk festival instead.
That enthusiasm spills out from the stage and those in attendance more often than not witness a performance they wouldn’t see elsewhere. When the musicians are happy, the customers are happy, and year in and year out you sell all your tickets in a matter of minutes. The equation is consistent: Add value consistently without chasing big wins and losing sight of your goals, and in time you win big. The same holds true for real estate investment.
A performance Beck will never forget is the perfect recipe for a music festival customers will remember
Notes:
https://fs.blog/avoiding-stupidity/
https://finance.yahoo.com/news/charlie-munger-turned-wesco-financial-072403781.html
https://stylecaster.com/how-much-are-coachella-tickets/
https://www.jambase.com/article/interview-newport-folk-festival-producer-jay-sweet
Great article brother! I have found that the 80's rock bands cannot make money performing by themselves so instead they have to be part of mini festivals where they are 1 of 10 or 20 bands to play. This provides them the opportunity to meet for fans who necessarily wouldn't have seen just them directly, and gives the audience the chance to see hundreds of years of experience for a volume discount. Check out this mini festival im going to next week in Philadelphia: https://blerocks.com/events/. Steven Adler from Guns N Roses is the headliner.