How procurement plays its part in music festivals
- 19 Jul 2019
The world is ready to sing and dance again after quarantine - and a music festival is a perfect place to do it. But how does the world get back to safely enjoying festivals and outdoor gatherings post-pandemic?
Running your own music festival seemed to be a simple and easy way of making a profit in days gone by. After all, you just need good music and beer, right? But how do music festivals make money, and will you be able to secure all the supplies after COVID-19? After all, you don’t want people to show up and be disappointed.
Aside from good drinks and great tunes, there’s a sophisticated operation underway to ensure revelers enjoy themselves safely – and the event goes ahead. Of course, procurement plays a considerable part in this, so let’s examine the role purchasing and procurement technology play in hospitality, event planning, and festivals.
Festivals are more popular than ever
Despite the recent pandemic, the music festival market has grown significantly in recent years and isn’t likely to stop soon. However, following established protocols is essential to be successful. In New York City, the recent Homecoming Week concerts prove this point. To enter the Great Lawn show or Global Citizen Live in September, attendees aged 12 and older had to prove they had at least one dose of a COVID-19 vaccine. In addition, those younger than 12 had to be accompanied by a vaccinated adult and wear a mask.
But what about those people who are hesitant to get the vaccine? For the Governor’s Ball and Lights On Festival in October, full vaccination or a negative COVID-19 test within 72 hours of the day of attendance are required. Precautions are crucial for attendees to feel safe and reassured about going to music festivals after the new normal.
With that in mind, festivals without clear criteria for attendance lead to confusion and frustration. As a result, festivals such as Rolling Loud needed to implement guidelines to make attendees feel comfortable quickly. Establishing procedures and ordering essential supplies ahead of time is critical for success post-pandemic. From beer to mask and hand sanitizer, procurement must consider all the requirements for attendees to enjoy music festivals. Even with the current guidelines, festivals are a lucrative business, and as such, many more are being set up.
What do you need to host a festival?
We’ve detailed the fundamental costs of hosting a festival below;
Most importantly, you need a venue to stage your festival. Prices for site hire will vary drastically, as festivals are generally held in rural locations, which will be cheaper to hire -. In contrast, festivals held in major cities mean the rent will be substantially more expensive. Also, remember the costs associated with social distancing, such as added space, masks, and other necessities.
Once you’ve secured a site, you’ll need infrastructure to support the thousands of attendees.
First, you need a water and electricity supply at the festival, both in the stage and camping areas.
Waste management is also a significant expense for festivals, as they produce on average 23,500 tons of waste; which only 32% of which is recycled.
In addition, social distancing requirements may incur additional costs to protect the safety of attendees. To determine costs, be aware of the latest guidelines for social gatherings such as music festivals.
Stages & equipment
The bigger the festival, the bigger the stages are. There are also tons of lights, sound, and video equipment. You’ll have to pay for both the transportation and setup of the stages and equipment.
In addition, you’ll need to organize the festival’s security to ensure the safety of your visitors. Costs include fencing around the site, security inside the festival, paying for police who manage the surrounding transport links and entrances. In addition, after the pandemic, security staff are needed to check vaccination records, distribute masks, and maintain social distancing requirements.
Now, you must pay for the acts that will be performed at your festival. The amount you spend on musicians can vary (especially for headline acts). For example, artists such as Bruce Springsteen and Justin Bieber charge more per performance than Ed Sheeran.
Non-headline acts are also required throughout the day, but they don’t charge as much as the headliners – however, there’s a larger number of these performers.
Tax & music rights
There is also a VAT charge on each ticket sold and a further percentage paid to PRS to support musicians.
How do festivals make money?
Once all of the above has been paid for, the money made from your ticket sales may be dwindling, but there are a few ways that you can top up your profits – such as glamping, sponsorships, and caterers. So once again, how do festivals make money?
Food and beverage catering is an essential part of hosting a successful event, and catering typically contributes about 40% of the overall running costs.
Considering how much festival-goers spend on food and beverages, they are a lucrative opportunity for traders, represented in the price of a pitch. However, each pitch at a festival will not receive the same footfall level. In addition, there is limited stock access, so traders must estimate how much stock they need to maximize sales and reduce waste, especially during the unpredictable post-pandemic days.
Additionally, event sponsorships help cover the costs of the festival. However, sponsors have a considerable influence when organizing the event, and you need to be cautious of whether their ethics align with those of the festival.
Glamping is a private campsite provided for festival-goers with pre-erected tents that often have their own toilets, showers, and phone-charging spots. Glamping is growing in popularity, and organizers are keen to supply the demand as tickets to stay in these tents add up to serious profits.
How can the weather make or break a music festival?
Depending on the region, it is nearly impossible to predict the weather at any time of the year. So, this makes organizing a festival somewhat risky as rain can have a devastating effect on a festival’s profits.
When it rains, organizers must pay for the straw laid out around the festival and extra labor to distribute it. Weather conditions also impact the number of “walk-up” sales (people buying a one-day pass on the day itself); Consider costs such as supplying free water when the weather is hot.
As more people continue to visit music festivals each year, making a profit by running your own is achievable but risky, as uncontrollable factors play a crucial role in its success. Plus, you have to ensure that your festival is unique and exciting enough to draw the crowds away from your competitors.
There is also a sophisticated procurement operation needed to coordinate a music festival, manage the event preparations and build, and ensure contingency procedures and funds are available to overcome unforeseen issues.
Following the latest COVID-19 guidelines is crucial to ensure adequate supplies and accommodations for attendees. Automation in procurement provides real-time updates to support the organization of festivals without the risk of human error.
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