Live music industry giants have little to no competition, while independent festival promoters are struggling to stay afloat.

Local Adelaide music trio Tonix were geared up to take on the Vintage Vibes stage in what would have been their first big festival early this year.

Vintage Vibes was set to return to the Adelaide Hills in January following its successful 2023 debut but was scrapped less than a month out.

Technically it was postponed, but with no information on its supposed return, its cancellation is looking far more likely.

Tonix member Henry Brill Reed says the group did not lose money from the canned festival, and while they had invested time into rehearsals, they try not to dwell on the lost opportunity.

“It was definitely exciting to find out we were on that line-up and then disappointing to find out that that line-up couldn’t go ahead,” he says.

“I don’t think it stunted any of our progression, or the amount of time [we were] investing into it, but it was certainly a disappointment.”

However, Stellie, another Adelaide artist who featured on Vintage Vibes’ line-up, lost money spent on flights and accommodation for her Melbourne-based guitarist.

Stellie says she only found out about the festival’s cancellation when it was posted online.

While an Adelaide festival is a “guaranteed money maker” because she would not usually incur any travel costs, and she is keen to play more, she is somewhat hesitant.

“It’s definitely one of those things where I wouldn’t trust that it was going ahead until the day of,” she says.

“Especially with the climate at the moment with other festivals as well.

“[There’s] no guarantee that the festival will actually happen until you’re there.”

It is no secret that Australian music festivals are struggling to stay afloat with 10 festival cancellations this year already and 25 cancellations since 2022.

The year kicked off on a low note when Victoria’s Mornington Peninsula festival, Coastal Jam, was cancelled barely a week before it was scheduled in January.

February was worse. Punters were barely given a week to buy Groovin’ the Moo tickets before the whole thing was canned a week later; meanwhile, New South Wales’ ValleyWays was cancelled just weeks before.

March saw a repeat of what happened with Groovin’ the Moo when Splendour in the Grass was scrapped soon after tickets went live.

In April, after a 17-year run, Sunshine Coast’s Caloundra Festival announced it would not go ahead this year at all. Similarly, Falls festival, which seemed to be getting ahead of the curve, announced last May that they would not be going ahead with their 2023–24 new year fixture.

Cost-of-living pressures seem to be a common theme for the cancellations of most, if not all, of these festivals. This ambiguous term has integrated itself into our everyday lives, but what does it actually mean?

Gareth Lewis, Music SA’s special projects manager and co-owner of General Admission Entertainment and Adelaide UniBar, says festival organisers have to weigh up the costs of cancelling compared to going ahead and potentially losing more.

“It’s nuts in the industry at the moment, and pretty depressing,” he says.

“I know promoters personally that have cancelled gigs and it’s all about ticket sales, and it’s a wake-up call, you know, like how much am I gonna lose if I cancel today, versus how much money I lose if I run it as a loss.”

According to a report into Australia’s music festival sector released by national arts funding body Creative Australia this year, it costs an average of $3.9 million to run a music festival and almost half of the festivals that ran in the 2022–23 financial year did not make any money.

Music festivals are a massive part of Australian culture and, according to Creative Australia, they support local tourism, create a sense of community, create employment opportunities and expose artists to new and larger audiences.

In 2022 more than 500 music festivals contributed over $234 million to the Australian creative economy — 11.7 per cent of the total revenue of the Australian live performance industry.

So why aren’t they making any money?

For one, Creative Australia’s report, which focuses on numbers from the 2022–23 financial year, shows that the industry experienced a post–COVID surge that saw more people attending music festivals than pre–COVID.

During this period, 535 music festivals were held across Australia, most of which were in Victoria and New South Wales.

That is almost 1.5 festivals for every day of the year.

While Stellie says ticket prices are high, she thinks people are happy to cough up the cash if they like the line-up enough, but that the added costs are making them hesitant.

“The prices that seem to be high [are] when you get there, like spending money on drinks and stuff,” she says.

“I think that’s the killer.

“It’s all of the costs that come with it, like the flights, the [accommodation], if you’re camping — a camping pass, the food, the alcohol, everything.”

According to Creative Australia, ticket sales are, of course, a major factor in determining whether a music festival will go ahead.

Punters are slower to buy instead of jumping at pre-sales and Creative Australia found that one in three festival goers choose not to buy a ticket because of the cost.

University of South Australia creative industries lecturer Sam Whiting studies the live music industry with a focus on small venues. He says, like other sectors, costs have increased across the board which causes organisers to raise ticket prices.

“Public liability insurance is really high … inflation generally has hit suppliers pretty hard,” Dr Whiting says.

According to an Australian Prudential Regulation Authority (APRA) review, public liability insurance  has increased 40 per cent from 2015 to 2023.

This increased cost has already been attributed to festival cancellations, but what exactly is public liability insurance and why do festivals need it?

Under the Civil Liability Act (1936), the occupant of a premises owes that premises and the people on it a duty of care.

In the context of festivals, event organisers are responsible for any damages, accidents or injuries that occur.

As with any insurance policy, the higher the risk, the higher the premium and music festivals are some of the riskiest events.

The alcohol and drug culture synonymous with music festivals already poses a high risk of injury.

Add onto that the increased risk that COVID posed, and while this may not be as big of an issue these days, it has had a lasting impact. Plus, the high risk that increased extreme weather events pose means festival public liability insurance premiums are through the roof.

The federal government is currently holding an inquiry into the Australian live music sector, to which Dr Whiting has submitted recommendations, including the review and regulation of insurance premiums and finding ways to lower risks and overheads.

“Public liability insurance is out of control, so [we need to find] ways to bring that down, to cap it or to underwrite it with public insurance schemes,” he says.

“I’m also very mindful that we shouldn’t be throwing taxpayer money at these big commercial entities so you’ve got to find ways of doing this that don’t reward anticompetitive behaviour.”

Similar to what we are seeing with Australian supermarket giants Coles and Woolworths, Dr Whiting says “anticompetitive behaviour” is taking its toll on the live music industry.

“We have a bit of a duopoly in terms of the upper end of the sector,” he says.

Live Nation, the biggest concert promoter in the world, owns Ticketmaster, the biggest ticketing agency in the world. They also own a major stake in Secret Sounds, who run some of the biggest music festivals in the country, including Splendour in the Grass, Dr Whiting says.

KEG Entertainment, also a massive entity in Australia, owns Ticketek; while they may not operate in the festival space, they have exclusive rights to many medium and large venues along with Ticketmaster.

“I mean when you’ve got essentially a cartel of two major providers, they can charge whatever they like so it’s not competitive, and to bring prices down you need to promote competition and we don’t have that,” Dr Whiting says.

On the other hand, Lewis says independent promoters and those in the business of boutique festivals are just charging what they can to get by.

“I think 95 per cent of promoters charge what they can just to pay the bills,” he says.

“No one’s making bank off music festivals at the moment.

“It’s just a reflection of the increased costs of doing business.

“It’s just a matter of having to pass those costs onto punters sometimes.”

A festival’s line-up is another huge factor that determines whether people are willing to buy a ticket.

Dr Whiting thinks that the “Triple J” approach to festival line-ups, with a mix of genres, might be going out of style, and that genre-specific line-ups are what will thrive.

“We access music through these highly curated digital platforms [like Spotify] that feed us what they already know that we like,” he says.

“We get in our little bubbles and festivals that can program to those bubbles, and pitch to those audiences, will do well.”

Lewis doesn’t agree and thinks that all festivals are struggling, no matter their line-up or target audience.

“To be honest, I actually really liked that Groovin’ lineup this year,” he says.

“I don’t know if it’s that easy to say [that] if you just do something genre specific it’ll work because … I know people that are doing those things [and it isn’t] working.”

Tonix’s Brill Reed says in the post–COVID festival craze, we saw a lot of “ridiculously inflated” line-ups when the industry might’ve had some leftover funding to play with.

“When we started breaking out of COVID, [those were] some of the most insane line-ups I’ve ever seen,” he says.

Over the past two years, Calvin Harris, Tyler the Creator, Arctic Monkeys, Lil Nas X, Lizzo and Post Malone are just some of the names that have graced the Aussie festival circuit.

It’s safe to say big bucks were spent on big names, and maybe the industry has set new, too-high expectations that are not feasible to sustain, Brill Reed says.

But, then again, massive international artists like Kylie Minogue and Future were booked for this year’s Splendour in the Grass line-up and it still befell the same fate.

Lewis does not think this was the most responsible move, especially in the current climate.

“I think promoters have to be realistic as well, like putting 50,000 people in a remote parkland in northern New South Wales at $400 a ticket is probably not realistic in the economy at the moment,” he says.

“Putting on festivals like that and paying $1 million for artists and that kind of thing is kind of irresponsible business as well.”

Lewis has had a hand in bringing iconic festivals like the Big Day Out, FOMO and Groovin’ the Moo to Adelaide in the past. Now his promotion company GAE organises and runs Beer and BBQ fest and he says a lot of time and energy goes into booking a line-up.

“For a big festival like Groovin’ the Moo, they’ll start booking [next year’s] line-up basically as soon as the run this year is done. So, you know, it’s sort of a 12-month process,” he says.

“It’s a long and involved process… and there’s a whole bunch more scepticism from agents now because of the cancellations.”

Although he hasn’t faced a festival cancellation himself, he says the longer festivals hold off on cancelling, the more it costs them and the artists on the line-up — but it’s the independent promoters and organisers that are copping the brunt of it.

He says that while it varies between events and venues and depends on artists and their management, generally an artist will be paid most of their fee before they hit the stage and if the festival is cancelled, the money comes out of promoter’s pockets.

“Unfortunately gigs like Splendour and stuff that are owned by big multinational corporations, they don’t pay very much on cancellations,” Lewis says.

“It leaves a lot of artists out of pocket, and by leaving artists out of pocket it means then the independent guys like us have to pay more upfront to book them next time.”

Dr Whiting says this is a big part of why Splendour in the Grass and Groovin’ the Moo would have called it quits only a week after tickets went on sale. Australia is a small market for such a big multinational corporation that only sees the numbers and not the people they are impacting.

“If [Live Nation] see slow ticket sales indicating that they’re going to be up for a loss, they’re going to pull the plug,” Dr Whiting says.

“That level of corporate, kind of ruthless business mentality … is really I think the leading reason behind these cancellations.”

“If you don’t have a level of independent promoters who care about local audiences and artists and musicians and communities, you’re not going to have that same level of investment in building brands and audiences.”

Brill Reed describes the current state of the music festival industry as a “weird melting pot”.

“I think the reason why these more recent cancellations happened [earlier in] the ticketing process is probably as a result of seeing what has happened previously,” he says.

There is a level of distrust among organisers and festivalgoers which means the industry is trapped in a vicious cycle.

Festival promoters are reluctant to go ahead because of slow ticket sales, people are hesitant to buy tickets straight away because of increased costs and the risk it will be cancelled, and artists are hesitant to be booked on a line-up for the same reason.

Lewis says the callous practices of big industry giants have a negative flow-on effect that is being felt by independent businesses.

“Things like Splendour and [Groovin’] cancelling, even though that’s a decision of, you know, much bigger international organisations, it really flows down and for want of a better term, it kind of fucks the little guy in the end,” he says.

“Whether that’s the artist or the venue or the next festival that wants to book that artist.”

While artists may be hesitant, and rightly so, to book on uncertain festival line-ups, Tonix and Stellie would jump at the chance to play Vintage Vibes if it does, in fact, turn out to be postponed.

Brill Reed says Tonix would love to be a part of a Vintage Vibes revamp in “whatever iteration it looks like”.

Stellie is a more hesitant after the money she lost the first time around but says she enjoys local festivals too much.

“I definitely would be a little bit more tentative to do it,” she says. “But I dare say I would probably still say yes.”

While the uncertainty of the industry is something that we might just have to ride out, it’s important for live music lovers to get out and support local gigs in the meantime.

Small venues create a pipeline of talent that Stellie says has a “flow-on effect” that might get us back to festivals sooner rather than later.

“Festivals are never going extinct,” she says. “People love music too much.”