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Music Festivals: Peace, Love, and a Business Battle

Thursday, August 20, 2015   (0 Comments)

The Wall Street Journal (07/30/15) Shah, Neil

The world's two largest concert promoters, Live Nation and AEG, are competing to control the U.S.'s exploding music festival industry. In the last few years, music festivals have begun to dominate the U.S. concert industry, and Live Nation and AEG have both profited from their rise. Since 2012, Live Nation has acquired four of the top five festivals in America. Similarly, festivals now comprise 30 percent of AEG's net earnings—a 20 percent increase since 2010. Although festivals are expensive to produce, festival profits can be more than 100 times greater than traditional single-artist shows, according to Bowery Presents CEO Jim Glancey. The popularity of music festivals, which offer a sampling of various artists in a social setting, reflects "how fans are consuming music in a digital world," says AEG Live CEO Jay Marciano. The U.S.'s maturing festival industry prompted the buying spree by AEG Live, Live Nation, and SFX Entertainment, and the industry consolidation is similar to what happened in Europe several years ago. AEG Live has added at least 12 major U.S. festivals to its portfolio since 2010. Annual festivals can provide a steady source of income to promoters, but need to build a following first. “You don't want to buy a festival right out of the gate,” says Live Nation CEO Michael Rapino. “We are looking at the established festivals.”


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