The festival bubble, closer to bursting than ever before

Shinding, Nozstock, Pine Fest, Chilville, Mañana Mañana or Psy-Fi are just some of the more than 100 festivals in the UK (about 40 festivals) and Holland (about 60 festivals) that have announced their cancellation or their last edition this year. Festivals among which are long-lived events such as the British Towersey Festival, active since 1965, or Beale Street Music Festival, an event that puts an end to its history after 46 editions.

In Spain, festivals such as Cala Mijas, SeaSon Fest in Baiona (Pontevedra), the edition of Boombastic in Tarragona, the 80s to 90s Festival in Galapagar (Madrid) or the Air Music Fest in Getafe have not been able to take place this year either. It seems that, after the festivals’ craze after the pandemic, we are entering a moment closer than ever to the bursting of the bubble in which the sector finds itself.

Sky-high ticket prices and unaffordable production costs

As can be read in the article by Music Festival Wizard – a specialized festival media that keeps track of cancelled festivals internationally – and corroborated by the Association of Independent Festivals, most festivals claim the termination of their events for economic reasons. Ticket sales in 2024 are down significantly from previous years at most festivals, even at some of the largest. As The Economist reminds, events such as Coachella or Burning Man have failed to sell out this year, something that had not happened since 2010 in the case of the Nevada festival.

In Spain, within the top 10 of the biggest festivals in the country only Mad Cool can boast of having increased the number of attendees, with almost 20,000 festival-goers more than in 2023. In 2024, the number of attendees has generally been maintained with respect to the previous year (as is the case of Sónar, Cruïlla, Primavera Sound or Arenal Sound), when in previous editions they had managed to improve their attendance figures. However, in the events that are at the bottom of this top 10, the downward trend is beginning to show: Bilbao BBK Live closed its last edition with 10,000 less attendees than in 2023, as well as Resurrection Fest.

This drop in the number of attendees is due to ticket costs, which have only increased after the years of post-Covid euphoria. Tax increases have also been another reason for the current high ticket prices. In the Netherlands VAT has increased from 9% to 21%, while in the UK the reduction of VAT on tickets from 20% to 5% has just come to an end. So, now that demand is stabilizing four years after the coronavirus crisis, audiences are refusing to pay high festival prices.

If we add to the drop in ticket sales the “significant increase in costs (referring to the operational costs necessary to carry out the show) in a very difficult economic situation (exacerbated by the economic impact of Brexit in the case of the UK)”, as explained from the British Penn Festival the cancellation of the festival, these events are impossible to maintain. According to El Blog Salmón, in Australia the production costs of festivals have increased up to 40%, which has caused the fall of festivals such as Grooving the Moo, where singers like Billie Eilish have become headliners.

Many festivals or extreme weather situations

Although the economic factor is determinant to understand why we are so close to the bursting of the bubble in which festivals find themselves, there are others that help to worsen their situation. One of them is the large number of festivals we have today. In Spain, more than 1,000 festivals are held annually and, year after year, this number has tended to increase.

Jointly, despite the huge variety of these events, the programmes are repetitive, as the same artists headline the festival in most of them. In addition, large festivals are not niche or focused exclusively on one music genre, but tend to be more generic. “Algorithmic recommendations from streaming platforms like Spotify have funneled fans into more fragmented niche markets than in the days when everyone listened to the same radio playlists,” explains The Economist.

We can not either forget that, although attendees are willing to enjoy festivals whether it’s 40 degrees or raining cats and dogs, in recent years the weather has proven to be another danger to face. In 2022 a festivalgoer died at the Medusa Beach Festival after one of its stages collapsed due to strong gusts of wind. Another example is the 2023 edition of Burning Man, in which the Black Rock desert completely flooded by a strong storm, making the last days of the event to be summed up in mud, lack of resources and tens of thousands of attendees unable to leave the venue.

Acquisition of festivals

The events sector has historically been one of small agencies, oblivious to capitalist movements, but since 2017 we have been living a fever of mergers and acquisitions that has become a craze in the last two years. If we look at festivals, last year Mahou San Miguel acquired 51% of Mad Cool Events, a company that from then on exploits the land in Villaverde (Madrid) where the Mad Cool Festival is currently held.

In addition, in the midst of the crisis in which festivals find themselves, investment funds are also beginning to take an interest in this type of event and to acquire shares. This is the case of the American investment fund KKR (Kholberg Kravis Roberts), which has acquired Superstruct Entertainment, promoter of more than 70 festivals in Europe and Australia. In Spain it has around twenty macro-festivals, including ElRow, O Son do Camiño and Sónar. With this movement, the concentration in a few hands of the big festivals grows, and so the smaller ones can not cope with the competition and are forced to announce their end.