Music Festival Sector Faces Crisis
Major music events industry suppliers are feeling the impact of dwindling ticket sales and frequent cancellations over the last year.
Following the cancellation of one of Australia’s biggest events, Spendour In The Grass, earlier this year, the House of Representatives Standing Committee on Communications and the Arts launched an inquiry into the Australian live music industry following
Perfect Storm
According to Bec Williamson at No Fuss Events, “the challenge intensifies when festivals proceed with poor ticket sales, prompting clients to resort to long-term payment plans to manage their cash flow. Naturally, this arrangement doesn’t bode well for cash flow. Moreover, the cancellation of festivals that are repeat clients year after year can significantly affects revenue that suppliers may have previously forecast.
“The rise in the cost of living appears to have affected events like festivals, where historically, ticket purchases weren’t immediately urgent upon release. Consumers are now waiting longer to gauge their affordability before making purchases, leading event managers to grow nervous and sometimes cancel events due to sluggish ticket sales. Interestingly, we haven’t observed the same level of impact on arena and stadium shows featuring high-profile artists at this stage.”
While some global artists continue to sell out, support for Michael’s Rule, which is a voluntary code for music promoters to showcase local talent in support of international acts, might throw home-grown talent a life-line, where ensemble festivals, a more natural setting for local artists, struggle to sell tickets in sufficient numbers.
Chair of the Standing Committee, Mr Brian Mitchell MP, said “Australia’s live music industry is currently facing considerable operational challenges. In the last couple of years, after the reopening of live music venues and festivals post COVID lockdowns, we have seen the sector face new and unprecedented issues.”
Mr Mitchell explained “Some common struggles include the rising costs of presenting live music, shifting consumer behaviours, the loss of skilled workers in the industry, and cost of living ramifications. We will be exploring sustainability and growth in the Australian music industry into the future, domestically and internationally.”
More than 25 music festivals across Australia have been cancelled since 2022, the Australian Festival Association’s Adelle Robinson told a Senate hearing in Canberra in April. “Festivals are currently experiencing a crisis from a combination of issues occurring at once, to create what we see as a perfect storm,” she said.
Insurance is being sited as one of the key factors in the viability of live music events, with venue public liability insurance policies increasing 10-fold in the past financial year, climbing from $20,000 per year to as much as $120,000. AFA has called on the Commonwealth to introduce measures including a government-supported insurance scheme. An interim report, in early May prior to the Federal Budget, recommended the federal government facilitate access to affordable insurance for organisers of small-to medium sized festivals. The two other key recommendations were for increased funding and reforms to steaming services to better access to local content.
Among initiatives launched by the State Governments are Victoria’s Labor Government’s Live Music Festivals and 10,000 Gigs program, which aims to pump $10m into the Victoria musci festival scene.
A report released last month by Creative Australia showed more than one-third of Australian music festivals are losing money as operational costs skyrocket, red tape becomes harder to wade through and people in their late teens and early 20s ditch events.
In the investment and advisory body’s first Soundcheck report, it was revealed that it costs on average $3.9M to run a music festival. Among 51 Australian music festivals surveyed, more than half turned a profit — but 35 per cent lost money, with a median deficit of $470,000.
