The Exciting and Lucrative Effects of Festivals

The Exciting and Lucrative Effects of Festivals
November 19, 2018

Once a rough and ready hippy phenomenon, music festivals are now a multibillion-dollar business.

Tickets for Coachella 2017’s 250,000 attendees sold out within hours, with a final gross of US$114.6 million, marking the first recurring music fest to break US$100 million. During yet another sold-out run in 2018, Beyoncé’s memorable performance blew up on social media leading the festival to be nicknamed “Beychella”.

However, both editions were dwarfed by the takings from the Desert Trip festival in 2016, the top gross of all time at an eye-watering US$160 million over two weekends, featuring legends like Paul McCartney, The Rolling Stones and Bob Dylan.

Coachella, Desert Trip and the country music festival, Stagecoach, all take place in Indio, California, and the city has been so transformed that it is now dubbed “The City of Festivals”. This is a deliberate strategy on the part of the organisers, Goldenvoice, which has resulted in a boost in audiences.

Since 2012, the city of Indio has benefited from an increase in visitor spending of 60 per cent due to Coachella and Stagecoach. The economic impact is actually larger; the total global spending multiplier from these two festivals alone has been calculated at more than US$704 million in 2016. Desert Trip’s overwhelming success is estimated to have provided a staggering stimulus of around US$805 million.

Malaysia reaping the benefits of creative festivals

Malaysia too has been flirting with urban music and arts festivals since at least the early 1990s. These events, especially those with an international flavour, have started taking a firmer hold in the last decade or so, with stalwarts drawing acclaim and fans the world over.

The most famous is the Rainforest Music Festival, held annually at the cultural village just outside Kuching, Sarawak, in the foothills of Mount Santubong. This world music festival features traditional music and contemporary world fusion, with a firm focus on providing a platform for the indigenous music of Sarawak and other indigenous genres from around the globe.

The Rainforest Music Festival’s unique formula, of hosting interactive workshops during the day before the blowout concerts in the evening, has led to it winning numerous awards and being consistently cited as one of the best in the world, including making the top 25 for six years running in British music publication, Songlines.

The festival regularly attracts its capacity crowd of 20,000 people over the three-day event, with around a 40 to 45 per cent share being foreign visitors.

Spinoff value to the economy was estimated at RM35 million in 2015, with both local and international media coverage worth RM50 million. Such numbers show a large boost to both the local economy and the tourism industry, making the festival an important annual source of income for Kuching.

In the capital city of Kuala Lumpur (KL), festivals have become a mainstay for the entertainment industry while generating significant amounts of money. 

2013 was a big year, the economic impact of international events increased further by 21 per cent. One major festival alone, such as 2013’s Future Music Festival, hosted in Sepang, just outside KL, brought in an estimated 15,000 tourists and RM52.5 million in tourist expenditure.

Experiences over things

Festivals not only provide exactly that Instagram-worthy experience, they can also be more lucrative than single performer concerts, because festival-goers spend more per person when they purchase food, drinks and other goods over a period of days. This, in turn, has a multiplier effect on the hosting city and related sectors.

Festival founder, Adrian Yap, has personally seen this development in the 16 years he has been running the Urbanscapes Festival, which combines international musical acts with satellite arts and culture events throughout the city. 

“Festivals and the music industry contributed more than RM5.8 billion to the local economy, directly and indirectly, last year, so it not only enriches the soul but bank accounts too,” Yap says.

Arts and culture events on various scales, like the ones organised by Yap that have expanded beyond music to encompass other forms of creative expression, can now be found throughout the year. This has enhanced KL’s appeal and broadened its already rich cultural foundations.

“Festivals like ours add to the vibrancy of a city, by giving it a cultural richness that increases its liveability and attractiveness for both tourists and locals alike,” Yap concludes.