UK MUSIC FESTIVAL ANALYSIS REPORT
MADE 5002: Marketing for creative entrepreneur
This marketing analysis report has been done on UK music festivals to assess whether new festival has a scope in the industry or not.
- A structural overview of the music festival industry states that as there is a large no of a music festival in the UK, tells us that the barriers are low to enter the industry.
- A strategic group analysis shows that there is around 90,000 or less no of the people who attend the music festivals in the UK.
- A market analysis shows that under the half of the market share of industry is dominated mainly by seven festival organizers, which suggest that for a new company to come in the market and stay independent of these companies might be difficult.
- Another analysis shows that competencies and required sources should be obtained as the value of the industry must be consumer experience.
- The geographical distribution of the top UK music festivals is shown in the map (later) which shows how and where the cluster of the festivals is developed. This will help in understanding the opportunity to get a new music festival in the UK (northern regions).
- An industry lifecycle diagram (later) depicts the stages that a music festival generally goes through:
Evolution – Growth – Downturn – Experience – Decline
Everything besides downturn or downfall is supposed to grow until the company experiences decline. Studying these factors will help in understanding where exactly the main problem lies and it can be eliminated with right decisions.
- Three key competitors: Isle of Wight festival, T in the park and Glastonbury Festival. An analysis highlights their strengths, weaknesses, opportunities (to improve) and also the threats. Studying these factors will help in overcoming the problems they faced and will give the new company and give a fair chance to compete with the major companies.
TABLE OF CONTENT
2.0. Industry Analysis
2.1. Industry Structure
2.2. Geographical Distribution
2.3. Leading Companies
2.4. Lifecycle Of The Industry
2.5. Value Chain Analysis
2.6. Strategic Group Analysis
3.0. Major Competitors
3.2. Glastonbury Festival
3.3. Isle Of Wright Festival
3.4. T In The Park Festival
5.1. Appendix 1
5.2. Appendix 2
5.3. Appendix 3
5.4. Appendix 4
5.5. Appendix 5
5.6. Appendix 6
5.7. Appendix 7
UK music festival is the industry focus of this report. A large amount of the UK economy is generated by the music festival, which are a big business. A report on UK music says “in 2012 UK music tourism generated £1.27 billion for the UK economy” (UK music, 2013, p.42) also in a report by UK awards, it says that around £2.2 billion are generated only by live music events for the UK economy (UKFA market report, 2013, p.24). Additionally other reports have “found that 44% of the incoming tourist to the UK believes that music was one of the British key culture activities” (UK music, 2013, p.22).
The aim of the report is to assess the music festival market in UK, to offer and study the competitors and present an extensive industry analysis of the UK music festival industry. The analysis will include: structure of the industry, geographical distribution of the major music festivals in UK (northern regions), and industry cycle, strategic groups in the industry and value chain analysis. In this report, three competitors will be considered and will analyse their strengths and weaknesses. The main aim of the report is to find the attributions about the present and future of the industry, to identify probability for new and upcoming companies.
2.0. INDUSTRY ANALYSIS
2.1. Industry Structure
It is estimated that there are about 55,000 UK music concerts and festivals according to UK music and festival report (MINTEL, 2016, companies and products). The festivals may vary from the holding the small ones to about ones with hundreds of attendees (appendix 3). The managing director of festival republic says “three or four years ago there was a new music festival being announced every week, but that has definitely disappeared” (UK music, 2016, p.47). This tells us that music industry in UK has low barriers for a new festival to enter. Also in chapter 2.4, the industry cycle will showcase that new or upcoming festival has to struggle a lot and must compete with the already flourishing festivals from the beginning itself.
“Outsourcing (is believed to enhance) flexibility and allows firms to concentrate on those activities where they possess superior capabilities” (Grant 2010, p.352). This is a fortunate belief for music festivals as their nature of integration is to large no of suppliers, contractors and other services which are very important to reach the desired result. This also tells that vertical integration is not possible because the festivals rely a lot on outsources like security, food, artists and performances.
2.2. GEOGRAPHICAL DISTRIBUTIONS
Porter- “geographical location of a value activity can affect its cost as can its location relative to other value activities” (Porter, 2004, p.82). Earlier there were maps available to showcase the festivals that happened in UK, but now with over 50,000 festivals, it is difficult to position all of them. But (appendix 2) shows that the festivals, listed as “top 10 music festivals” by visit Britain (visit Britain website). At this time there are a lot of music festivals going on and are in high demand for greenfield festival in summers, he festivals are organised In different locations so that the competitors do not copy the location and strategies and also at the same time people can have the same experience all around the UK. This also reduces tourist coming in for different places and local people can access it easily. But as the map showcases there is a huge cluster of festivals in London and also major companies who organise and promote the events like Secret Production (Secret garden party), Live Nation (Creamfeilds, V festival) and Festival Republic (reading festival) are situated in London itself. These factors may have caused the central location to be more available and because being located in the centre a lot of international tourists can come in. This also means that mainly all the festivals happening in the central part gives scope for a new festival to come up in the norther part of UK, near Lake District or may be Newcastle.
2.3. LEADING COMPANIES
In the UK there are either independent festival organisers or large manage companies who are responsible for managing the festivals be it at one place or all across the nation. It is difficult to find an estimate of how many individual or large festival managing companies are there, due to the scope of the industry. (In no particular order) Live Nation, L N- Gaiety Holidays Limited, Festival Republic, the Glastonbury Festival Limited and MAMA Group are the major companies that contribute to UK music festivals (MINTEL, 2017, companies and products). Anschutz Entertainment group limited (AEG) UK started a 5 year contract with Royal parks including Barclaycard British Summer Time Festival to hold six events in Hyde Park, London. (MINTEL, 2014, companies and products). Although by this we cannot get the definitive list of the companies but does tell us about the major leading/ dominating companies.
In 2013 the financial value of British music events industry was £1.4 billion (all party parliament group, 2013, p.26). In order to understand industry concentration, how much theses major leading companies dominate the UK event industry is important (appendix 1). It shows that these leading organisations mentioned above are responsible for half of this value which tells us that the industry is concentrated (where the smaller companies are dominated by the leading ones).
2.4. LIFECYLE OF THE INDUSTRY
In the event project life cycle graph (appendix 5) it depicts that music festival in UK have a well-defined cycle. It also highlights the major aspects of timeline of the event (for an individual festival) and the level of activity. Adapted from Johnson and Scholes lifecycle graph shows ‘industry life cycle’ (appendix 6) on a larger scale it demonstrates the “condition that can be expected at different stages in the life cycle” (Johnson and Scholes, 2002, P118). This is important to understand the growth rates through different phases in a music festival industry.
2.5. VALUE CHAIN ANALYSIS
“The festival organisation value chain represents the introduction of a series of knowledge sourcing and creative decisions being translated into the process of production of the festival” (Carlson et al., 2010, p.122). Considering this the value chain in the report will focus on the phases and process of event planning. “The value chain provides a systematic way to divide a firm into its discrete activities” (Porter. 2004, p.59). In this case the music festival industry is analysed by the value chain by its competencies to highlight how successful is the music festival industry. “The operatives process is the stage when an event manager details the skills and resources needed to deliver an event” (Bladen et al., 2012, p79) and to make sure that the best value is offered to customer, the manager must be capable enough. The value offered is a memorable experience for the customer which will add on to the whole festival experience which will add back to the value of the company. This is added into planning the process as organisers focus on the customer experience “more on clearly defining the required experiences that attendees are intended to have” (Balden et al., 2012, p.70). This input for each activity is in form of resources and capability (as being the festival organisers) and the consumer experience is the output as is evident in appendix 6.
2.6. STRATAGIC GROUP ANALYSIS
“Identifying strategic niches with an industry and strategic positioning of different firms” (Robert M Grant, Grant, 2010, p.114) which suggests that strategic group analysis is a useful tool. USP- unique selling point can be used to position the music festival industry. X- axis is the strategic group chart (appendix 4) depicts the same by the genre of the festival, while the y-axis depicts the capacity of the people who attend the festival, which may also be the USP because some people may like to visit the big events with lots of things to witness while other might forever going to events which are smaller with niche music.
Masterson and Pickton defines market share as “a firm’s sales expressed as a percentage of the total sales of that type of product in the defined market” (Masterson and Pickton, 2016, p.295). The number of people attending the event and the average ticket price are used to calculate the market share so that one can figure out how much earning does the festival make. According to UK festival award’s market report 2015 £1.3 billion were spent on the tickets, accommodation and travel (UKFA Market report, 2015, p.19). The appendix 4 shows market strategy with the strategic groups. Which tells us that large festivals hold more shares than the festivals which are more niche and smaller.
3.0. MAJOR COMPETETORS
As mentioned before this report will be analysing three companies from “top 10 music festivals” list on Visit Britain website. Each company will have a Strength, Weakness, Opportunity and Threat analysis (SWOT) to give a proper insight of their performance, which will help in building a better event.
3.2. GLASTONBURY FESTIVAL
As mentioned on the Glastonbury website itself, it is “the largest greenfield music and performing arts festival in the world and a temperate for all the festivals that have come after it” (glastonburyfestivals.co.uk,’An introduction to Glastonbury festival’). Michael Eavis (owner of Glastonbury festivals 2015 limited) organizes the event. In 2016 with a turnover of £40,328,000 the company made a gross profit of £31,895,000. In past 5 years there has been increments in both turnover and profit. The figures on 2016 have been the highest by now, which could be because the 2015 festival was cancelled. With the strong objective of “the Glastonbury festival aims to encourage and stimulate youth culture from around the world all its forms” (glastonburyfestivals.co.uk, the festival’s objective) it also engages a lot of philanthropic activities and thus is internationally renowned.
The prices of tickets are high £250 (efestivals.co.uk, Glastonbury festival). Their target audience is mainly young people who may not be able to afford the tickets but it does not affect the growth of the company or festival as the tickets do get sold out. As shown in SWOT analysis (analysis 1) instalments on the tickets can be provided so that it gets people to cover the cost. While in the value chain analysis (appendix 7) the logic can be changed with the ticketing opportunity. This might benefit both the company and the customer by increasing the value of festival.
Analysis 1: SWOT analysis.
3.3. ISLE OF WIGHT FESTIVAL
It is organized in isle of wight which is organized by John Giddings at Solo Agency Limited in London (it promotes new and upcoming musicians), which is a rock music festival. This is the sole festival the company is responsible for and thus it makes it clear that why the company is located the center part of UK, London as it primarily represents the musicians rather than festivals. £5,236,470 was the companies turnover in 2012 while the profit was £3,869,375 (FAME), suggesting that the company is quite successfully financial. In an interview John Giddings says that the festival is “relaxed and fun and its all about the music and entertainment”, suggesting that content is the focus of the festival.
The price of the ticket is £190, which is lower as compared to the other case studies (efestival, Isle of Wight festivals). This could be because it provides more niche genre and would attract more people who prefer a festival with minute of genre. Looking at the SWOT analysis (analysis 2) and value chain analysis (appendix 7) there is a scope of better communication with the customers as there is not much information provided in the website. This may help the organizers to do better promotion and it will further add value to the festival (with increased number of audience).
Analysis 2: SWOT analysis.
3.4. T in the Park
T in the park is the largest event that happens in the Hamilton, Scotland. DF Concerts with Live Nation (as their stockholder) being the promotors,, organize the event. £8,627,000 is the annual gross profit that organizers make with a turnover of about £54,460,000. This profit (annual gross profit) is then shared amongst four stakeholders, this might be the reason that profits of DF Concert Limited’s are low compared to turnover. (FAME) Their main focus feels like to be on line up and they have clearly emphasized on it a lot as can be seen on their website. It has a strong branding initiative including great branding name, image representation for each stage and on site area.
According to SWOT analysis (analysis 3) the prices of the tickets are high, about £200 (efestivals.co.uk, T in the park). It feels fair though because there are so many international artists coming up to perform and has a frequent line up as well with a large number of attractions for the attendees. On the other hand transport could be an issue as the event happens in a remote location, but the event provides local bus service for the same. Though it certainly docent deal with the international tourism. Looking at the SWOT analysis (analysis 3) with value chain analysis (appendix 7) tells us that the event performs well in the industry may be this is the reason it is a popular event.
Analysis 3: SWOT analysis.
New music festivals may not see a lot of trouble while coming up with a festival as there are low barriers for the entry but because more mature festivals dominate the industry market. Growth, stakeout and maturity are the next stages in the industry lifecycle which makes it difficult as at this stage both mature and new up coming festivals would be competing. The case studies tell us that a central location does not really promotes success as two of these major festivals, T in the Park Festival and Glastonbury festival are organized in remote locations. But both of these festivals, as shown is strategic group analysis offer a mixed genre of music, which could be one of the important reasons for their success.
Looking further on the geographical distribution of these festivals, there is a scope of successful music festival in the northern part of UK, as there are not certainly high number of music festivals there. Thus, the strategy would be to find a place where there are less or no successful festivals and which can also hold unto a large number of people attending the event. The aim should be offer a vast no of genre and artists, to attract more people. The new festival should focus on improving the customer experience. The analysis of the case study tells that new festival should incorporate the strengths of these festivals while weakness, opportunities and threats should be taken in record and worked on to gain advantage and have increased chance of success.
5.1. Appendix 1:
Appendix 1: Industry Concentration and Market Share. Source: FAME, Mintel 2014 Companies and Products, All Parliamentary Group 2013 p.26
5.2. Appendix 2:
Appendix 2: UK Festival Map
Sources: Google Maps and Festival Website
5.3. Appendix 3:
Top 10 UK Music Festival (capacity)
Appendix 3: Top 10 UK music festivals
Sources: Top 10 UK music festivals by visit Britain
5.4. Appendix 4
Appendix 4: Strategic Group Chart
Sources: Top 8 festivals from “Top 10 Music Festivals” list by Visit Britain, data from www.efestival.co.uk
5.5. Appendix 5:
Appendix 5: Silver’s event project life cycle
Source: Silvers, 2007, p.159
5.6. APPENDIX 6:
Appendix 6: Industry life cycle
Sources: Adapted from Johnson and Scholes, 2012, p.199
5.7. Appendix 7:
Ticketing, transport & accommodation
Training of the staff
Venue/ site logistics
Contracts with suppliers and artists
Security and staff to control crowd
Rules and regulations
Appendix 7: Value chain analysis
Sources: Balden et al 2012, p.79
- MINTEL (2013) Music Concerts and Festivals UK, August 2013. London: Mintel International.
- International Competitiveness of the UK events industry’, May-August 2013.
- http://www.britainforevents.co.uk/images/APPG0/020Inquiry0/020Events0/020In dustry%20Report%20-%20Final.pdf
- BLADEN, C et al. (2012) Events Management: An introduction. Oxon: Routledge. CARLSEN, J et al. (2010) Festival management, innovation and failure. International Journal of Event and Festival management, 1 (2) pp.120-131.
- EFESTIVALS (2015) Festival Search http://www.efestivals.co.uk/festivals
- FAME (2014) Detailed information on UK and Irish Companies https://fame2.bvdep.com
- COX, R. (2014) excited about festival season yet? Watch this. Glamour Magazine, 29th April
- GLASTONBURY FESTIVAL (2015)
- GRANT, R. (2010) Contemporary Strategy Analysis. Seventh Edition. Chichester: John Wiley & Sons Ltd.
- ISLE OF WIGHT FESTIVAL (2014) http://www.isleofwightfestival.com/
- JOHNSON, G AND SCHOLES, K. (2002) Exploring Corporate Strategy: Text and cases. 6th ed. Essex: Pearson Education Limited
- JULIE’S BICYCLE (2014) Case Studies: Festivals
- MASTERSON, R AND PICKTON, D. (2004) Marketing: an introduction. Maidenhead: McGraw-Hill Education.
- MINTEL (2014) Music Concerts and Festivals UK, October 2014. London: Mintel International.
- SOLO AGENCY LIMITED (2014) http://www.solo.uk.com/default.aspx
- THE FESTIVAL AWARDS MARKET REPORT (2016)
- T IN THE PARK FESTIVAL (2015) http://www.tinthepark.com/home.aspx
- UK MUSIC (2016) Wish you were here: Music Tourism’s Contribution to the UK
- Economy http://www.ukmusic.org/assets/general/LOWRESFORHOMEPRINTING.pdf
- VISIT BRITAIN (2014) TOP 10 MUSIC FESTIVALS http://www.visitbritain.com/en/Things–to–do/Music/Music–festivals.htm