Live Nation and AEG Live: The Two Companies Eating the Music Festival Industry

When the news broke that LCD Soundsystem was “reuniting” for the 2016 version of Coachella, we wondered if our rapidly shortening nostalgia cycles might signal a trend towards festivals becoming less reliant upon legacy acts, in favor of more contemporary artists.

In reality, though, the current era of festival popularity has always been predicated on a healthy mix of both. This era basically began with the rise of Coachella and the death of the old Lollapalooza in the mid-’00s. Coachella’s current incarnation was essentially founded on a reunion — sure, it started in 1999 with Beck, Morrissey, Rage Against the Machine, and the Chemical Brothers, but it didn’t really gain momentum until Perry Farrell reunited Jane’s Addiction for the 2001 fest.

So what’s different about festivals in 2016 vs. 2001? Well, for one, more people are attending. In its inaugural year, Coachella drew 25,000 fans. Last year? 180,000, over six days and two weekends. Prices are also ballooning. A pass to the first Bonnaroo, for example, cost $100. This year? Early birds got in at the discount price of $325. Even accounting for inflation, these are significant increases.

As the post-Coachella festival market has grown, traveling festivals have made way for destination events with monstrous guarantees for headliners, and thus the touring festival model has made way for a patchwork festival circuit. All of this results in bigger revenues, bigger profits, and bigger guarantees for artists. In 2006, Daft Punk’s then-manager Pedro “Busy P” Winter was used to turning down offers for the duo to perform at festivals, but felt that Coachella promoter Goldenvoice’s offer of $500,000 was just too big to pass up. This year, it’s been reported that Guns ’N Roses was seeking $3 million for their festival bookings.

These increasing costs have also led to festivals becoming big business, which brings its own problems. At the best of times, booking shows is a business fraught with risk. When it comes to festivals, it’s even more so — promoters need to front massive amounts of cash to pay artists’ guarantees to perform, and if ticket sales are sluggish, or weather forces cancellations, the promoter (and their insurance company) takes the L. All it takes is one bad year to decimate an annual festival.

So when a corporate behemoth with a massive war chest comes along, offering to mitigate that risk, how can you say no? That’s exactly what’s been happening in the festival industry. The two biggest promoters in the world, Live Nation and AEG Live, have taken aim at the biggest, most successful festivals, and are slowly gobbling them up, piece by piece. AEG Live has owned Goldenvoice, — which puts on Stagecoach, Firefly, and Hangout festivals as well as Coachella — since 2001. Live Nation, the only publicly traded live music company, produces more than 60 festivals, and has been on an acquisition tear of late. The company now owns controlling stakes in Bonnaroo, Austin City Limits, Sasquatch!, Lollapalooza, and Budweiser’s Made in America, among others.

What does that mean for you, the music fan? Well, if you live in a major coastal hub like New York or Los Angeles, not much, probably. You’ve always had access to live music on the bleeding edge; it’s a rare event for a tour to pass your town by. But if you don’t? A festival might not be the ideal place to see any artist, but it might be the only place for a kid in Seattle to see Jamie xx, or a mom in Alabama to see Grimes, or anyone in Ohio to see the At the Drive-In reunion. And even if you’re in a city like New York, where you’ll still have access to all those touring bands, your festival lineups will most likely be homogenized.

Look at what’s happening with Founders Entertainment, the independent promoter that stages NYC’s festival du jour, Governors Ball. The festival market in the NYC area has been fraught for years, with ventures like All Points West and Bamboozle flaming out after short runs. But Founders has had a runaway success with Governors Ball, and AEG Live wants that paper. Their latest venture, Panorama, looked to assassinate the incumbent fest by staging an event in Flushing Meadows Park in Queens almost immediately after Governors Ball. This plan didn’t work out, and Panorama eventually had to settle for the same venue as Governors Ball, in the less-desirable month of July. But what about next year? What if AEG Live  and Live Nation succeeds in pushing out or buying up all the independent festivals? The independent spirit and curation that made the festivals such destinations to begin with will be gone, replaced by the festival version of Top 40. Why go to Coachella when you can get the same lineup in New York? Why go anywhere?

It’s more than a little ironic that the seeds of Coachella, the crown jewel of North American rock festivals, were planted by a Pearl Jam concert at the Empire Polo Fields, held to protest Ticketmaster’s monopolistic dominance over the touring music industry. Now that Ticketmaster is owned by Live Nation, that same company is looking to re-establish that same dominance, this time over festivals. And this time, they’ll probably succeed.

A previous version of this story incorrectly attributed Panorama to Live Nation. It is in fact produced by Goldenvoice, a division of AEG Live.