Stake logo

A live music festival at night with lights blaring out over a sea of people.

Don't stop the music

Music festivals are big business, with over US$5.5b generated by the industry in 2019. Billions of people attend them each year, but what exactly are the economics behind them?

Imagine turning your Spotify ($SPOT) top listens into a music festival. You don’t have to imagine the poster, see yours here. Go on, we’ll wait. Now you’re looking at it, how much would you pay to go to such a gig? Maybe you’re an indie darling and those artists would be fairly low cost, but the reality is that festivals aren’t cheap. 

Music festivals have come a long way from being a place for counterculture. Just look at Glastonbury, which began as a gathering of 1,500 free-loving people where tickets cost just £1 and included free milk. It is now one of the largest music festivals in the world, hosting the likes of Rolling Stones, David Bowie and Beyoncé and costing over £250 to attend. With no free milk. 

So despite a near 25,000% increase in price, are music festivals still worth it? According to economist Alan Krueger, you’re actually getting a bargain. This is because concert ticket prices for solo artists have also exploded.

Even just this year, acts like Lady Gaga and Harry Styles are on world tours with tickets often in excess of US$100. There’s been a 38% increase in ticket sales since 2019, benefitting listed entertainment companies like Live Nation Entertainment ($LVNY) and Eventbrite ($EB). There used to be more companies like Ticketmaster and SFX Entertainment, the brand behind EDM festival Tomorrowland. But both have been acquired by Live Nation Entertainment in the last decade. 

Back to ticket prices, the reason why music festival prices can be cheaper is because artists can share the costs, and with multiple acts across the stage it’s an elegant way to improve the productivity of performers. But this doesn’t mean festivals are cash cows. Costs have risen massively over time, particularly with increased logistical challenges. On top of that you have artists' fees. Ariana Grande charged $8m to perform at Coachella in 2019, a fee equivalent to over 18k tickets. 

So how much would your Spotify festival cost? Well, hopefully you get a corporate sponsor like Coca-Cola ($KO) and American Express ($AXP) – they’ve been known to sponsor festivals. But maybe you don’t even need a top performing artist. Maybe all you need is to present a new experience, which is exactly what consumers are looking for

Want more?

You know what to do

Insights, trends and company deep dives delivered straight to your inbox.

Stake logo
Over 7,000 5-star reviews
App Store logoGoogle Play logo

Subscribe to our free newsletters

By subscribing, you agree to our Privacy Policy.

Stakeshop Pty Ltd, trading as Stake, ACN 610105505, is an authorised representative (Authorised Representative No. 1241398) of Sanlam Private Wealth Pty Ltd (Australian Financial Services Licence No. 337927) ('Sanlam') and an authorised representative (Authorised Representative No. 1241398) of Airwallex Pty Ltd (Australian Financial Services Licence No. 487221) ('Airwallex'). Stake is not authorised by Airwallex under Airwallex’s AFSL to arrange for clients to be issued with securities as Airwallex is not authorised under its AFSL for this purpose. Stake is not authorised by Sanlam under Sanlam’s AFSL to arrange for clients to be issued with a non-cash payment facility as Sanlam is not authorised under its AFSL for this purpose. Stake SMSF Pty Ltd (‘Stake Super’) is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up a self managed super fund (‘SMSF’). When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment of a SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. Stakeshop Pty Ltd will also run marketing and promotions to you under. For more information about SMSFs, see our SMSF Risks page.The information on our website or our mobile application is not intended to be an inducement, offer or solicitation to anyone in any jurisdiction in which Stake is not regulated or able to market its services. At Stake and Stake Super, we’re focused on giving you a better investing experience but we don’t take into account your personal objectives, circumstances or financial needs. Any advice given by Stake is of a general nature only. As investments carry risk, before making any investment decision, please consider if it’s right for you and seek appropriate taxation and legal advice. Please view our Financial Services GuideTerms & ConditionsPrivacy Policy and Disclaimers  before deciding to invest on or use Stake or Stake Super. By using our website or service in any way, you agree to our Privacy Policy and Terms & Conditions. All financial products involve risk and you should ensure you understand the risks involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance. Stake and Stake Super are registered trademarks in Australia.

Copyright © 2024 Stake. All rights reserved.