What happened to the great Aussie mega festival?

By Sarah Smith, 3/5/2016

Big Day Out is gone, Future is in the past, Soundwave has collapsed under a mountain of debt, and even the massive Stereosonic festival tour has gone into “hiatus”. Have we seen the last of the great Aussie mega festival? SARAH SMITH spoke to industry insiders to find out what the future holds. Photos by MIKEY HART.

In January this year Bluesfest promoter Peter Noble told FL that the travelling mega festival model was effectively kaput. Asked for his take on the domino-like collapse of Australia’s major touring juggernauts he argued that the overheads for such infrastructure-heavy events are simply too high to sustain in the current market. “Festivals never make a lot of money: people think they do but they cost so much,” Noble said. “But as soon as that dropped a little bit, that business model didn’t work and all of a sudden they go from making three or four million dollars a season to dropping $12 million – and there’s no way back from that.”

And it’s hard to argue with this logic. Cracks first began to appear in Australia’s festival landscape in 2009 when the proliferation of boutique start-ups such as the ill-fated Blueprint and Lost Weekend started to have a destabilising effect on an increasingly over-saturated market. This trend continued and by 2014 Harvest, Peats Ridge, Sprung, Pyramid Rock, Parklife and Homebake were no more. The Big Day Out was the next fatality, announcing its departure from the summer calendar after an attempted refurb by US promoters C3 failed to combat the event’s sliding ticket sales and waning brand loyalty. Twelve months later Soundwave Festival would collapse amid reports that the event had incurred debts of up to $26 million.

But throughout all this carnage, one festival seemed to buck the trend. Launched in 2007 by promoters Totem OneLove, Stereosonic grew from a single day party in Melbourne into Australia’s premier dance music festival, touring to five cities and attracting reported crowds of over 60,000 at its Sydney event in 2011. Riding high off the commercial explosion of EDM and filling a gap in the market for a blockbuster genre festival, Stereo seemed almost infallible. But after years of expansion the phenomenal rise and rise of Stereo came to a screeching halt earlier this month. Only two years after local promoters Totem OneLove sold the event to the US-based SFX the festival announced it would not be returning in 2016.

While a Stereo rep told FL’s sister site inthemix that the festival “will return in 2017 bigger and better than before”, it’s becoming increasingly difficult to envision how such an event could possibly re-establish itself under the same model in the current market. Stereo was the very last of Australia’s travelling mega festivals and its collapse raises a lot of questions. Will we ever see a national event of this scale again? Why have destination festivals such as Splendour in the Grass and Falls Festival prevailed? What lies behind the success of medium touring festivals like Laneway Festival and Groovin’ The Moo? How much of a role does Australia’s national youth broadcaster triple j play in a festival’s marketing strategy?

Big Day Out

Do foreign promoters really understand the Aussie market?

Much of the discussion around Stereosonic’s collapse has focused on parent company SFX, who purchased the event for $75 million in October, putting Stereosonic in with 51 other festivals bought by the company worldwide. After its stocks crashed, diving from USD$13 a share down to just 91 cents a share the company filed for Chapter 11 bankruptcy, at which point the writing was on the wall for Stereosonic.

It’s not dissimilar to the trajectory of the Big Day Out, which collapsed three years after US company C3 became the majority stake holder in the company. So how much was the failure of these festivals simply foreign promoters misjudging the Australian market? As former Big Day Out promoter Viv Lees points out there are few other countries in the world that have sustained large-scale travelling festivals.

“The Australian touring festival model which was successfully refined by the big festivals here is unique. The festival model in most other parts of the world comprise one massive weekend event, often with camping and sometimes paired with a maximum of one other sister event.” In fact Lollapalooza in the US – modelled on the Big Day Out – only lasted eight years as a touring festival before C3 bought it out and restructured it as a weekend destination event in Chicago, and more recently Chile and Buenos Aires.

“There are nuances in this market and you’ve got to understand it.” – Danny Rogers, Laneway Festival

“I think the mistake C3 may have made when acquiring the Big Day Out, is that they thought they could just do a Lollapalooza version and everyone would lose their shit,” says Laneway Festival promoter Danny Rogers. “And, interestingly, the year they really got stuck into it was the year that it really fell down – and they arguably had the strongest lineup in ages. People were impressed by the lineup, but that they were tired of the Big Day Out.”

In short C3 assumed that the same kind of programming that worked at Lollapalooza Chicago could be replicated in a much smaller over-saturated festival market. “I just think, personally, they needed someone based locally to help them with the programming and it’s really tricky,” Rogers continues. “There are nuances in this market and you’ve got to understand it. I learnt the lesson when I booked [Laneway] festival in Detroit – I just didn’t know the market. Even though the lineup was sick, no-one gave a fuck.”

Unlike Big Day Out, however, Stereo was not facing any serious competition from other festivals, a distinction Viv Lees sees as integral to understanding the fate of both events. “You can’t really generalise about either [the Big Day Out or Stereosonic being sold to foreign investors] except to say the underlying motives were the same,” he says. “Big Day Out was a refurb job with a great upside potential and featured the Red Hot Chilli Peppers in 2013. Unfortunately Soundwave buried it with a massive lineup – including Metallica, Linkin Park and Blink-182 – that would never be repeated. The business motivation behind the SFX rollup was always unsound and more cynical than naïve with local promoters everywhere unable to meet any reasonable return on capital benchmarks after receiving very large buyouts.”

Was Stereo’s collapse inevitable?

The Big Day Out spent its last few years battling diminishing brand loyalty making its demise, when it came, feel somewhat inevitable. Stereosonic on the other hand was close to the top of its game. In 2011 the event attracted 60,000 punters in Sydney before expanding to a two-day event in 2013 and 2014. While it did roll back to its original format last year, it still managed to attract an estimated 48,000 people in Sydney. To compare, in its final year the Big Day Out was reported to have sold between 27,000 to 35,000 tickets.

Ben Dennis, manager of electronic duo Peking Duk says the industry was surprised by the festival’s sudden collapse. “Given the success we had playing Stereosonic – playing to massive crowds in each city for both years the guys performed I didn’t think the cancellation/hiatus would come so soon.”

While it is easy to blame the parent company’s insolvency for Stereo’s demise, its collapse does follow a trend which has seen the blockbuster travelling festival model slowly unravel over the last decade. “The main takeout from this is that all these festivals were relying on huge capital injections over the last few years for survival,” Lees says. “Whether it was from C3 in the case of Big Day Out, Michael Gudinski [and Mushroom Group] in the case of Future, the creditors in the case of Soundwave or the SFX purchase in the case of Stereosonic.”

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Why have we stopped going to mega festivals?

In the days following Stereosonic’s collapse former Soundwave promoter AJ Maddah tweeted that it “increasingly feels like people don’t want to go anywhere.” But Australia still has a very healthy festival market with established events such as Splendour in the Grass, Falls Festival in Lorne, Meredith Music Festival, Golden Plains and Groovin’ The Moo routinely selling out. While comparing these events can be like weighing up apples and oranges, looking at what makes them successful provides a fascinating insight into the future of Australia’s festival market.

So what do these smaller events offer that their larger counterparts could not?

#1 LOCATION, LOCATION, LOCATION

Mirroring patterns in the UK and the US, destination festivals have become increasingly popular in Australia. Our most successful events now offer punters an immersive festival experience that generally places just as much emphasis on the experience as it does the line-up. And while destination festivals haven’t always been a guaranteed success, as Peter Noble told FL in March, they function on a much safer economic model.

“If you look at the destination festivals like Falls, Splendour, Woodford, many many others – they own all their sites [so they are] able to get multi income streams and build their sites and make the festival experience,” Noble said. This means that not only can they shape a more bespoke punter experience, they are less likely to be financially devastated if there is a drop in ticket sales. “The big festivals are hungry beasts that churn through talent and require massive audiences to underwrite them,” says Lees, “Events such as Bluesfest, Splendour and Meredith really have much smaller cost structures and require much lower attendances for survival.” Which brings us to the next point…

#2 WE DON’T WANT TO PARTY WITH 50,000 OF OUR CLOSEST FRIENDS

At its peak Big Day Out was commanding crowds of 60,000 in Sydney and Melbourne. For scale, Laneway Festival has a capacity of 12,500 punters in Sydney while Groovin’ The Moo – which attracts up to 40 percent of its audience from capital cities – sits around 15,000 in Maitland and Bendigo. Despite their success neither event has any plans to expand much further.

In 2014 Groovin The Moo co-founder Steven Halpin told the Newcastle Herald: ‘‘We are not going to try and increase capacities or make extra stages or book bigger bands, we’re at a good level.’’ Laneway’s Danny Rogers says making only incremental changes to capacity over the years has been integral to his event’s longevity. “Our break evens are low – they are not tiny, but they are low compared to these huge events which to break even you have to sell 25,000 tickets. If that was me I would be fucked. I would be out of business like everyone else five years ago. Because who can pull that off every year in the market we are in?”

#3 IT’S NOT ALL ABOUT THE HEADLINER

Groovin The Moo and Laneway also share a similar philosophy when it comes to curating lineups. While both events are aimed at different audiences they avoid an emphasis on huge headliners; an approach which Lees says was the undoing of the Big Day Out. “I saw the need for change in music formatting approaching rapidly as the Big Day Out was top heavy with too much expectation placed on the headline attractions.”

“The Big Day Out was top heavy with too much expectation placed on the headline attractions.” – Viv Lees, ex-Big Day Out

It’s a sentiment echoed by Rogers: “Festivals that are super reliant on huge headliners generally end up in a position where they can’t get the headliners. The whole thing we’ve tried to do with Laneway is just live within our means … it’s very easy to fall into the trap of trying to deliver a line-up that is bigger than what you have financially.”

Not only is booking huge headliners becoming increasingly less viable, but according to Ben Dennis it’s also not what festival-goers are seeking. “With social media and new ways to share and discover music the reliance on big stacked lineups to appeal to everyone’s interest has become less of a thing.”

#4 MORE THAN NOSTALGIA 

Citing the 2016 Glastonbury and Splendour lineups Crikey recently discussed the drawbacks of ageing festival bills. It was a similar discussion to the one raised by FL back in 2014, where we argued that part of the reason for the Big Day Out’s demise was its growing reliance on nostalgic acts such as Pearl Jam and Blur. “[The Big Day Out] failed largely because it catered to the wrong demographic: a 30-plus market that, with the exception of a handful of rock’n’roll lifers and diehard fans, simply don’t go to mainstream festivals,” wrote FL’s Darren Levin.

But in 2016 there is a place for nostalgia – as long as it isn’t doing the heavy lifting. Splendour in the Grass 2016 sold old almost instantly with a lineup topped by three vintage acts: The Cure, The Strokes and The Avalanches (who had to be explained to the festival’s core audience of triple j listeners). But that’s not the reason people booked tickets. Just as Tame Impala attracted a larger crowd than fellow headliners Blur and Mark Ronson in the Amphitheatre last year, it is likely that the more triple j-friendly acts such as Flume and Violent Soho will draw the numbers on this year’s bill. Splendour is about strength in numbers, and their line-ups – a broad mix of up-and-comers, triple j favourites and heritage acts – generally always bats deep.

Big Day Out

The triple j effect

Several promoters are already on the record saying our national youth broadcaster plays a substantial role in deciding an event’s viability. In a recent interview with FL Bluesfest boss Peter Noble highlighted just how important support from triple j can be to the success of a festival. “[Support from triple j] would mean hundreds of thousands of dollars of free marketing, on a radio station that is up to number three in some urban markets,” he explained. “You can’t buy ads, it’s that simple, and so you can sell an event out just on that alone. It becomes very hard for other events to compete with events who receive that much free marketing on radio. It’s kind of that simple.”

In February 2014 GTM co-founder Steve Halpin told Music Business Facts that triple j was an integral consideration when booking his festival’s lineup: “Basically we work really closely with triple j,” he said when asked whether genre plays a role in selecting the GTM bill. “So any band that gets triple j play fits our bill … We do have bands like Parkway Drive, Amity Affliction are hardcore bands. We have indie-pop bands, we have hip-hop, we have electronic, so anything that fits the triple j lineup.”

“I don’t book acts because they are on triple j, but it certainly helps.” – Danny Rogers

This year’s GTM line-up includes 11 bands that placed in the Hottest 100 including The Rubens who came in at #1. Also featured are Safia (#23 and #35), Illy (#39), Alison Wonderland (#59), Vallis Alps (#27), Boo Seeka (#50), Ratatat (#52), Boy & Bear (#63), Ngariie (#73,) British India (#76) and Golden Features (#92). Alison Wonderland and The Rubens were also feature albums on the station in 2015. Would GTM be such an extraordinary success if its line-ups weren’t so in tune with triple j?

Laneway Festival is an event based on music discovery, which promoter Danny Rogers has grown through his canny knack of booking bands that are on the cusp of something great. But even Rogers says it’s impossible to overlook factors such as triple j airplay when considering whether to invest in certain acts. “I don’t book acts because they are on triple j, but it certainly helps,” he says. “Especially when I’m trying to look at Brisbane and Adelaide where they don’t have [community stations as big as] RRR or FBi. So it’s definitely something that is important. [triple j airplay] is not the deciding factor for me [as to whether to book a band] but it’s certainly one of many reasons”.

Ben Dennis says that from a local artist’s point of view, your chances of being booked on a festival certainly increase when you are getting substantial airtime on the Js. But that’s not true with every event. “It all comes down to which festival and who their demographic are. For example with Splendour in the Grass and Groovin The Moo, definitely [it makes a difference],” he says. “Then there are festivals like Let Them Eat Cake. Strawberry Fields and Rainbow Serpent – I don’t think any of these acts would have been on triple j.”

Interestingly, the last Big Day Out lineup was led by artists not high on triple j’s rotation in 2014 – Pearl Jam, Blur, Snoop Dog and Beady Eye, just to name a few. Make of that what you will.

So where to from here?

Will we ever see the return of Big Day Out or Stereosonic under the same super-sized model? It’s highly unlikely in this market but Viv Lees thinks it is still viable. “It’s a great model,” Lees says, “and after the dust settles in a few years I am certain that some bright spark will discover it again and I would be hopeful that an event has a chance to blossom again, as a big festival is a beautiful thing.”

“A big festival is a beautiful thing.” – Viv Lees

Danny Rogers, however, thinks the model would have a better chance of revival if it was just slightly scaled back. “If the Big Day Out came back and remodelled itself as 30,000 [capacity], I do think there is a place in the market for it … The key is to have clarity about what you are and build a brand loyalty unless you are consistent with what you do.” It’s this approach combined with curated and considered lineups that has seen festivals such as Meredith and Golden Plains become the kind of rite of passage events the Big Day Out and Soundwave used to be.

And boutique will continue to blossom, with more and more promoters trying their hand at smaller events – from 500 to 5000 capacity – something which Ben Dennis sees as unique to the Australian landscape. “After travelling and seeing many festivals overseas we are spoilt for choice with how many options we have and how many festivals there are creating unique brands, events and culture.”

Sarah Smith is the former editor-in-chief of FasterLouder, an Australian Music Prize judge and the current host of Breakfasters on Triple R. Follow her on Twitter.

Big Day Out