How to Disrupt Live Entertainment: Lessons From Music Festivals Doing It Right

If you're a music lover,chances are you've attended a festival. Typically ,these are multiple-day events at open-air venues attracting the who's who of performers.

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Summerfest, which has occurred every year since 1968, typically sells out its 800,000 fan passes in minutes after going on sale. In 2015, Austria's Donauinselfest (Danube Island Festival) attracted a record-breaking 3.3 million attendees over its three-day span. And, last year, the annual music and art festival Coachella grossed over $150 million in ticket sales. In short, huge numbers are involved with the festival business, but their business model has not changed for the most part in the last 50 years.

Below are some tips from select festivals that are trying to change that.

Bonnaroo

The four-day Tennessee-based Bonnaroo features a diverse lineup of acts every year with 10-plus stages showcasing more than 130 bands. Many attendees stay at the attached campgrounds, resulting in a strong sense of community throughout the festival.

Insight: Sustainability and CSR can bring benefits. Bonnaroo has had an eco-friendly commitment for all of its 17-year history. The festival composts all waste on the property, utilizes solar arrays on-site, encourages hydration with water-refill stations, hosts a 5k run and displays its eco values in other ways.

According to Bonnaroo's official website, the event aspires to be the greenest festival and to set the standard in sustainability and greening practices for North American concert events.

Lesson: The massive crowds festivals bring can easily yield a large carbon footprint. But Bonnaroo works to limit that footprint and is not alone in fighting for greener event planning. In this context, I spoke with Tony Alfaro, CEO and founder of Ribbon, a new app that helps with event-planning.

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Alfaro is an annual attendee of Burning Man, a large-scale community and art event held annually in the Nevada desert. On the subject of sustainability, Alfaro told me that "Leave No Trace is one of the ten principles of Burning Man.

"The positive effects are physically recognized, resulting in community reinforcement [self-policing]," Alfaro continued of the eco influence Bonnaroo has had. "And, most importantly, this has influenced "leave no trace' to be adopted by many other festivals and the real-world at large."

Rolling Loud

Founded only three years ago, the open-format hip hop festival Rolling Loud has grown to the point that it can host leading acts like Kendrick Lamar, Lil Wayne, Post Malone, Migos, Future, Rick Ross and Gucci Mane. In 2017, Rolling Loud's primary Miami-based event claimed to have grossed an estimated $60 million in ticket sales and to have generated $75 million in local economic impact.

Insight: Use loss leaders to help scale. In general, entrepreneurs may lose in the short run using loss leaders, but with this strategy, festival organizers can expect to win customer loyalty in the long run.

This means establishing deep-rooted brand equity and more favorable margins as the company grows. "That's why you see us giving the artists [gold] chains [as gifts], and we go above and beyond for them," Rolling Loud cofounder Matt Zingler said in an interview. "It's not about the money, it's about the long play. It's about your relationships, and you can't put a price on a relationship with an act that may be the next Drake or Future."

In live music, talent is a core element of the product, so it's smart business to treat acts accordingly. "What can you do to make yourself more appealing to work with?" Rolling Loud cofounder Tariq Cherif said. "Hospitality is key. All our stuff is different ... and it's attractive to do shows with us."

The event thrives off a strategy to do things differently, which includes embracing hip hop culture and trends -- something major festivals have avoided in the past. Look no further than the Cban link gold chains and custom diamond pendants event organizers give to marquee acts. Booking talent based off of the downloads and streams those artists have attracted, as opposed to just music charts and radio play, is another example of the next gen approach the festival takes.

Lesson: The point is to "build a scene," as Cherif put it. "We were and are some of the leading flag holders," he said. Add to that mix strong social media engagement, larger-than-life personalities and destination locations like Miami, San Francisco, and Southern California, and you begin to understand Rolling Loud's game plan.

Coachella

Coachella takes place over the span of two weekends in April and features artists like The Weeknd, Beyonce, Eminem, Cardi B, Migos, SZA and Kygo. In 2016 the Greater Palm Springs Convention and Visitors Bureau estimated that Goldenvoice, a subsidiary of AEG Live, which organizes Coachella, brought in $704 million in economic impact to the area.

Insight: Go strong on tech. Coachella offers a unique experience by harnessing innovative technologies, both to enhance its artists' sets and to improve its attendees' overall experience. In 2018, Coachella sold activation packages to brands like Google, Amazon and American Express. The companies offered fan-interaction zones to give concert-goers exclusive sneak peaks at future products.

HP and Intel also utilized drones to enhance visual displays live during artist performances. Aerial drone displays have been used during the Super Bowl and the Olympics, but Coachella broke ground as the first music event to do something similar.

Speaking of drones, I asked Nicholas Horbaczewski, CEO and founder of the Drone Racing League (DRL) the premier international drone racing platform, and an expert on drone tech, to chime in on the subject.

"We love learning what these high-performing robots are capable of, and we're continually amazed by the depth of their technological abilities to support an array of industries from security and transportation to sports," Horbaczewski said. "However, the industry that's been most revolutionized by drones is aerial photography and cinematography. Given their size, speed and unmanned nature, drones can capture practically impossible shots from extremely hard-to-reach angles."

Because of these technological strengths, drones are being applied to film, TV production, content-capture at live events like music festivals and more, Horbaczewski added.

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Lesson: For any entrepreneur, one last lesson is that wherever you can reinvent the experience, as the Coachella organizers have done with technology, there is money to be made.