Here for A Good Time: The Music Festival Economy

At first glance, composer George Frederick Handel, jazz legend Ella Fitzgerald, ‘60s icon Jimi Hendrix, and contemporary rocker Kid Rock probably seem to have nothing common. But look a little closer, and despite their differing styles and eras you’ll see a common thread.

They are all part of the rich history of the global music festival. Along with other performers of various genres, they have earned loyal followings, due in no small part to their contributions to music festival lineups. These artists also helped bring not only attention but serious dollars and cents to places both previously known and obscure.

Concerts vs. Festivals

First, let’s look at what a music festival is, lest it be confused with a concert. Both event types tend to draw crowds and have vendors selling merchandise and food and drinks. A concert happens in one location with one opening act or more followed by one major headliner and is usually part of a tour. A music festival generally occurs over several days and nights with multiple sets, acts, and headliners, and often has a theme. And while concerts can be produced year-round and take place indoors or outside, festivals, because of their sheer size, tend to be outdoor events and thus are seasonal and the faithful are subject to the vagaries of the weather.

Something current like Coachella or Burning Man might come to mind when pondering a music festival. Or a slightly deeper dive into history might conjure up 1969’s famous/infamous Woodstock. But festivals go a long way back. According to scholar Bruno S. Frey, the first music festivals can be traced back to the 11th Century when French troubadours participated in guild festivities.

Events involving a large audience and musical entertainment became slightly more official by the 1700s courtesy of the Three Choirs Festival in Gloucester, Hereford, and Worcester in 1724. Later, London’s Westminster Abbey hosted music festivals dedicated to the music of composer George Frederick Handel in 1784-1787 and then again in 1791.

Closer to home and this century, Newport, Rhode Island, put festivals on the map in 1954 after 13,000 attendees participated in its inaugural Jazz Festival, and in early summer 1967, contemporary music took center stage for the first time in history during the Monterey Pop Festival. This, of course, brings us to the iconic great-granddaddy of them all: Woodstock.

Some Economics

Among contemporary festivals that welcome attendees in the hundreds of thousands, provide vending, and have police and fire safety personnel on hand, Woodstock 1969 looms large as the first of its kind. It also provides a cautionary case study in music festival economics, not because it got the numbers right, but because it shows how tough it can be to monetize an event despite having a crowd. When the mud dried up and the estimated 400,000 festival attendees went home, the festival’s final tally was less than legendary, having taken in roughly $1.8 million ($15.4 million in today’s dollars) for the four-day event, which cost about $3 million (over $25 million in today’s dollars) to produce.

Yet, while festivals can still lose organizers money or fail at getting off the ground (hello, Fyre Festival), a successful one can be a huge money-maker for the community where it happens. Data services firm Statista reported that in 2023 music festivals raked in $30.14 billion. Statista also forecast an annual growth rate of 5.03%, which puts expected revenue at $36.17 billion by 2027.

Here for A Good Time, Not A Long Time

It’s not only organizers and artists who make money. The communities that host can see a big economic boon. Rock the South, a festival that started in 2012 as part fundraiser, part morale booster after Cullman, Alabama, was rocked by hurricanes, has brought in some $20 million over the years to the town of 15,000 people. Additionally, each year the organizers donate to local nonprofits. This year, Rock the South spawned Rock the Country, a traveling festival that hopes to bring an economic boon to a handful of southern cities. 

Further north in Milwaukee, Wisconsin, Summerfest rocked the Midwest in a big way. Billed as the world’s biggest festival, Summerfest is a nine-day event with hundreds of acts that started in 1968. This year’s final cash is still being crunched to determine how much money the 555,925 attendees brought in. A peek at last year’s numbers reveals what Summerfest provided. In addition to raising $160.3 million for the city of Milwaukee, the event also created 3,400 full- and part-time jobs.

Wisconsin saw $188.7 million in economic impact, including $14.4 million in state and local taxes. Local small businesses enjoyed a Summerfest swing, with hotels and restaurants, retailers, and entertainment venues reporting higher traffic volumes around the festival's time. On-site vendors also benefited from the event courtesy of the $110.2 million attendees spent on food, souvenirs, and other items.

In addition, niche businesses designed to cater to music seekers also benefit from this industry. While the hippies gathered on the hill to camp and party at Woodstock, these days, events have a new way for attendees to sleep over: glamping. Though glamping also involves sleeping outside, it offers more luxurious accommodations than the simple tent or sleeping bag situation. 

Although Burning Man bills itself as a non-festival (though by the standard definition, it is indeed a festival), attendees still gather in the desert and camp out. Sometimes, that takes place in a yurt like one offered by burneryurts.com. Starting at around $4,000 for a basic setup, three people or two couples have the option to add on amenities that increase their comfort in an air-conditioned structure that the service sets up and tears down as a courtesy to its clients. Wanderlux, another glamping service provider serving Washington, Oregon, and Idaho, offers festival glamping packages that allow clients to book a festival spot in the states it serves and for a flat fee includes beds, bedding, furnishings, setup, and teardown.

Whether they’re camping, glamping, or day-tripping, festivalgoers spend on what they care about, leaving the local communities with an economic boost in addition to bragging rights.