The Future of Music Festivals

Disparate Trends Power Growth of the Festival Phenomenon 6/19/2017 10:40 PM Eastern
In Festival Season, Hoping for the Best, But planning for Any Contingency

Continued terrorist attacks on Western targets in Europe for the past two years, as well as an assault-weapon rampage at the Pulse nightclub in Orlando, Fla. that resulted in 49 deaths and 53 serious injuries underscore the vigilance festivals must apply in safeguarding against acts of terrorism.

Take1 Insurance has made a name for itself within the event production community in recent years, most prominently with its involvement with the Event Safety Alliance and insurance offerings aimed to protect vendors from weather-related events. Now, in response to high-profile terrorist attacks in recent years involving entertainment sites, the company has debuted Combined Crisis Cover, which it bills as an insurance protection policy for the live and special event industry. The policy provides immediate coverage of up to $35 million annually in the event of—or threat of—“malicious acts,” including terrorism, active assailants and other antagonists who interrupt or cause the cancellation of a planned live event.

The motivation behind the policy originated for Take1 executive vice president & program director Scott Carroll when he attended London’s International Music Conference in March, 2016: “There was a particular panel focused on the incidents from the Bataclan nightclub attack in Paris that had occurred five months prior, in November, 2015. A question was asked of the panel: ‘Do you believe that the Bataclan incident was a random act or was it a specifically targeted event?’ One panelist thought it was completely random—it could have been a grocery store or a mall, and there was low security, easy access, lots of people. That didn’t sit well with me, to be honest, because I felt differently as to whether entertainment and music was particularly targeted.” Conferring with other music and insurance professionals, Carroll soon confirmed he wasn’t alone in that view.

The result was Take1’s Combined Crisis Cover, which was designed to more specifically address the needs and issues related to a terrorist event, though taking a different approach than the backing proffered by the U.S. government’s Terrorism Risk Insurance Program Reauthorization Act. TRIPRA may be applicable to cover some companies affected by terrorism, but its guidelines are narrowly defined.

“After 9/11 took place, TRIPRA was written so that the United States government steps in as a backstop—not for the insured, but for the insurance industry so that it doesn’t collapse,” said Carroll. “It’s the only thing that is offered routinely to insurance customers in response to a terrorist act. Our policy responds to what we really think is going on in the world—because it’s not always a terrorist attack; for instance, the Boston Marathon bombing and the Pulse Nightclub shooting in Orlando weren’t declared terrorist acts by the federal government. When it is triggered, TRIPRA requires a Secretary of Treasury determination that something is a terrorist act [and] it requires five million dollars of property and liability damage. So your property has to have been damaged to that extent for TRIPRA coverage to enact it.”

The Combined Crisis Cover, by comparison, does not require a federal government mandate or determination that something qualifies as terrorism, and instead refers to the relevant authority for confirmation. “That’s a critical component and that is true whether it’s the malicious act element of our policy or the terrorist element of our policy; it doesn’t even have to [be carried out]; it’s simply the threat,” said Carroll. “Let’s say the Broadway theaters here in New York can’t hold their matinees because there’s a bomb threat in Times Square and the police have shut down the area. If I’m a theater owner, I’m not able to put on the performance and I have to refund ticket money—that is called a business interruption loss under a normal property policy. But in order for you to trigger a business interruption loss, you have to have physical property damage—the property carrier wants to say, ‘OK, you refunded those tickets because the bomb went off in your basement.’” Such an event would be covered by the Combined Crisis Cover policy, however, because the relevant authority—the police—had seen the threat as serious enough to close down the surrounding area.

But that said, how does Combined Crisis Cover apply to audio vendors? Carroll noted that when developing the policy, a broad customer base was kept in mind, from venues to vendors, but he offered an audio-based example: “Without trying to get into specifics [due to privacy concerns], a very public event involved one of my insureds—their equipment was confiscated for quite a period of time [in the aftermath of the event] while the investigation was going on. They were therefore unable to utilize that equipment to the point that they were debating whether or not they needed to replace it at their own expense because it wasn’t a covered loss. There was no physical property damage that allowed them to file a claim; it just was confiscated by the federal government. They were experiencing a business interruption—a true impact to their business—because of an incident, and in a scenario like that, under our policy, the situation would be a covered loss, meaning you know it’s [due to] an active assailant, a terrorist event or whatever it is. So I thought about that when we put this policy together—if I have an insured who’s got a million dollars’ worth of equipment hanging from the rigging system at a particular concert and something happens and their equipment is then confiscated or becomes damaged because of what happened in the event, it has an impact.”

The Combined Crisis Cover debuted late last year as an annual policy, afforded at different levels, ranging from covering $100,000 up to $35 million as needed. “I write many insurers who would be considered on the small side and I write many insurers that would be considered on the large side; we wanted this policy to be able to respond to everyone’s budgets,” said Carroll. -Clive Young

It’s been one of the most dramatic changes in the concert landscape in the past 10 years: the spawning of hundreds of new music festivals worldwide. There are of course many reasons for this: the need for musicians to augment shrinking revenues from CD and streaming sales/royalties with live performance fees, the popularity of festivals as a way the fan can see 10–20 bands or more over 2–3 days, and the benefit to promoters from both the scale and quantity of performances. With– according to SXSW– more than 32 million people attending at least one music festival a year in the U.S., they have become “a mainstream pastime of our culture.” (And according to a 2015 Nielsen report, most fans travel 903 miles on average to be at a festival– an amazing stat.)

This phenomenon was the subject of a special panel session, The Future of Music Festivals, Friday March 17th, 2017 at the SXSW Music festival and conference in Austin. And it’s the subject of much future-planning for the industry at large.

Behind the festivals trend as it played out in recent years in the U.S. is the phenomenon that music concerts at many festivals are no longer just “concerts.” They are shows with high production values, demanding big ticket prices. Concert ticket prices are up significantly and there are more outdoor events (because most music festivals are outdoor events). Many are major events with massive video technology that goes beyond IMAG to create elaborate visual experiences for all attendees, even in huge outdoor venues. Big production values are the norm. Stages now hold much more equipment, including massive LED screens (often 40 feet high or more), the latest line array loudspeaker rigs, and of course all the other audio, video, and rigging gear it takes to entertain increasingly jaded fans who now have literally hundreds of festival choices each season. Prime example: Milwuakee, WI’s Summerfest, billed as The World’s Largest Music Festival. Hitting its 50th anniversary this year, the event stretches over 11 days, serving up more than 800 acts on 12 stages as it provides more than 1,000 performances, with 900,000 people in attendance. The kinds of acts vary greatly across all genres, but also all levels of success; headliners last year at the Marcos Amphitheater included Paul McCartney, Sting & Peter Gabriel, Luke Bryan, Pitbull, Selena Gomez and Weezer, among others. 

But with the explosion in the number and kind of festivals, we have many trends going at once. The big are getting bigger. But there are also other trends. For example: a new festival subtrend is emerging: The Micro Festival. A prime example is the new Starry Nites Festival which debuted March 18-19, 2017 on a 42-acre ranch in Santa Barbara, CA. Intended to attract 3,000- 5,000 attendees, the lineup included Alan Parsons, The Kills, Cat Power, The Dandy Warhols, She Wants Revenge, Black Mountain, Teenage Fanclub, Strawberry Alarm Clock, and 30 other artists. Starry Nites was co-sponsored by Roland, BOSS, and V-MODA, and presented by Desert Stars Festival, Starry Records, and Shiny Penny Productions.

As much as readers of this publication love big production values and the latest line array and high lumen IMAG technology at the big festivals, what is the future of music festivals? Will the rise of niche festivals take away from the bigger festivals? Not likely. Big production value festivals will continue, but it behooves anyone involved in outdoor concerts and festivals in particular to listen to what’s discussed at SXSW– the conference track is known for shining a light on strong new trends the rest of the country doesn’t immediately see.

SXSW music festival is a long-established indoor (mainly) event. Like many festivals, they’ve promoted and encouraged new acts. Big names to participate in the event over the years include Snoop Dogg, Lady Gaga, Kendrick Lamar, Bruce Springsteen, Quincy Jones, Pete Townshend, Lou Reed, Smokey Robinson, Johnny Cash, Elvis Costello, David Byrne, Daryl Hall, Mick Jones, Tony James, Neil Young, Seymour Stein, Shawn Fanning, Courtney Love, Sean Parker, Chrissie Hynde, and many more top acts from all corners of the music business.

But as befits SXSW also, they often prompt professional conference attendees to think outside the box. The starting premise for the discussion at the Future of Music Festivals panel at Sx (“southby”) was that despite the advancements in technology, sound engineering, and digital media, large festivals are perceived by some fans and artists as having “become generic, boasting similar lineups and experiences.”

“So how can we reshape the future of music festivals?” was the question the session explored. The panel assembled some top festival players helping to redefine the music festival experience–cultivating and supporting local music scenes, sourcing unique performances, and creating new economic opportunities for musicians, while fostering new visions for what a music festival can be for fans and artists. With moderator Doug Freeman of The Austin Chronicle, the panel consisted of Jeff Vetting of Vulcan Inc, who is launching the new Upstream festival in Seattle; Robin McNicol, one of the managers of the huge Bonnaroo festival; and Christian Morin, a top festival promoter in Germany. 

All of the panelists coalesced around one theme: big festival lineups are more similar than they used to be– one reason being that a few big festival promotion companies are buying up others. But even as the festival models morph, there is through it all, for the past 5-10 years, the constant that festivals have been “propping up” the music economy. In other words: yes, the decline of revenue for artists and promoters from recorded or streamed music has everyone on the road and the festival is the most dateand artist-packed platform there is. The panel delved into ways that festival business models are evolving to meet new challenges on both the provider and artist side.

Jeff Vetting–whose new Upstream festival in Seattle (first one May 2017) is an “indoor” festival i.e. with performances scattered around clubs and other indoor venues (similar to SXSW in Austin)– sees a new role for festivals helping artists “make money after they play, to continue to make money… we want to help the emerging artists, not just have them play our stages.”

Christian Morin echoed all the panelists in reminding that “you can’t finance the festival from just the ticket sales, so, you need either public money, or corporate sponsors.” That public money he referred to is an EU, or German, phenomenon. Freeman joked that “we don’t know anything about corporate sponsorship…” referring of course to the fact that at SXSW in Austin corporate sponsorship money is everywhere.

“People tolerate the corporate sponsorship much more now,” said Robin McNicol. And Vetting said that the goal now is to “turn that into a positive experience–the model does not work without it.”

On the technology front, don’t think this was a back-to-basics only discussion. Live video streaming from the festival is one tool that all the panelists– at least all the American ones– said was an increasing trend for festivals. And all agreed that live video streaming does not cannibalize live attendance.

“Video streaming is a sponsorship thing,” said McNicol, “and it does not stop people from buying tickets.” Vetting said that he is now putting together streaming deals for the Upstream festival. In addition to more live streaming of festivals, other tech tools that came under discussion were wayfinding (digital signage) for fans on site, RFID ticketing (to combat counterfeiting), and an increase in apps that tell fans on site who’s playing where and when and can even be set up for digital “tip jars” for the artists.

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