So many music festivals have been canceled this year. What's going on?

It may not be too much of an exaggeration to say that 2024 was the year the music festival died. A wave of festivals has been unplugging their microphones and telling pass holders, “Sorry!”

Desert Daze, a psychedelic rock fest in Southern California; Sierra Nevada World Music Festival, a reggae fest in Northern California; Kickoff Jam, a country music festival in Florida; Blue Ridge Rock Festival in Virginia; Sudden Little Thrills, a multi-genre festival in Pittsburgh; Float Fest in Austin; the list of recent cancellations goes on and on.

And it’s not just America. In Europe, festival after festival — from Lollapalooza Paris to the Sideways Festival in Helsinki — has announced cancellations for this year or forever. By one count, there were over 60 music festivals canceled in the UK this year alone. In Australia, so many festivals were canceled that one magazine there recently asked, “Are the nation's music festivals extinct?”

Meanwhile, even some big name festivals that used to sell out in minutes struggled to sell tickets this year. Burning Man failed to sell out for the first time in over a decade. Coachella, which is the most-attended annual music festival in North America, saw a decline of around 15 percent in ticket sales this year compared to last.

Call it the festival recession. What’s driving it? There are the predictable culprits: surging production costs, high ticket prices, and consumer demand dropping harder than an EDM beat. But the festival slump may also be driven by factors that are more thought-provoking: technological changes in music listenership and a generation of kids who may lack the same enthusiasm for festivals as generations past.

The year the music fest died

In the decade before the pandemic, music festivals saw something of a renaissance. “New music festivals are popping up more quickly than you can count in the U.S.,” wrote The Associated Press back in 2013. Events like Coachella were doing so well that they were adding more days to their lineups. This fest of fests during the 2010s was so incredible that some questioned whether there was a festival bubble.

The pandemic obviously hit festivals hard, ending the boom. But, when the crisis subsided, consumers were flush with cash and pent-up demand for social activities seemed to help many festivals make a roaring comeback.

While there were the rumblings of trouble last year, it was really this year when the music stopped for many festivals.

Before we get to the more interesting explanations for the festival slump, we have to name the most obvious culprit: rising costs in this era of inflation. Portapotties, security, equipment, energy, food, concessions, merch, insurance, artist pay — expenses for producing these festivals have climbed faster than a drug-addled singer up the scaffolding of a soundstage.

Will Page is the former chief economist of Spotify and one of the rare economists who focuses on the music industry. He calls himself a “rockonomist.” Page recently published an analysis of the music festival downturn in the UK.

Putting on a festival, Page says, involves investing an incredible amount upfront with only the hope that ticket sales and other revenue sources will allow investors to recoup costs. It’s a big reason why music festivals are a notoriously risky business with low profit margins. In fact, many independent festivals are run by nonprofits that don’t make a profit at all. It’s easy to see why rising costs could cause more mayhem than a mosh pit.

During the boom years, many festivals jacked up their ticket prices. Since 2014, general admission prices for major music festivals have increased by 55%, according to an analysis conducted by FinanceBuzz. That far outpaced the overall rate of inflation during the same time period.

Page says that more recently, however, many festival promoters — perhaps recognizing softening demand — have been reluctant to raise prices enough to cover exploding costs. “I would imagine that promoters are a little bit risk averse not to push price too far [because] we're coming outta the pandemic,” Page says. “They’re like, ‘Let's get them back into fields, jumping up and down to Mr. Brightside by The Killers.’ But that hesitancy on price is then offset by this explosion in production costs, and that's where they've been caught in the crossfire.” Many festivals are clearly having trouble making the numbers work and are being forced to cancel.

Due to cost of living increases and higher interest rates, many of the usual festival goers are tightening their belts and refusing to fork over as much money for expensive festival tickets and all the accompanying costs of attending them. We’re also seeing similar downturns in other leisure and hospitality sectors, including theme parks, air travel, hotel chains, and Airbnb.

This decline in spending on experiences has obviously created a problem for many festivals, but in this particular market there’s an interesting wrinkle. The boom years may have led to festival oversaturation, with too many festivals competing for consumer dollars.

This has all, Page says, created a situation that he calls “a race to the top.” Consumers are reducing the number of live music events they go to and choosing to only go to their top priorities, the crème de la crème. So they may go to something like Coachella or a Taylor Swift or Beyoncé concert, but they’re choosing not to go to less sexy live events. In addition to many festivals facing financial problems, musicians like The Black Keys and Jennifer Lopez have struggled to sell concert tickets and canceled their tours.

Live music looks like it has become more of a winner-take-all market. The big dogs in the industry seem to be doing fine. Live Nation, which owns Ticketmaster and is the largest live entertainment company in the world, says they’re still seeing strong demand at their live music events. But they acknowledge that many festivals are experiencing financial troubles.

“The live entertainment market is highly competitive, and we’re currently seeing many artists prioritize touring over festivals, with amphitheaters, arenas, and stadium shows performing at record levels,” says a spokesperson for Live Nation. “While some festivals face challenges with rising production, insurance, and talent costs, we’ve found that festivals — both large and small — that offer great locations, talent, and a clear identity are thriving.”

Streaming and the anxious generation

Page, the former chief economist of Spotify, hypothesizes that the rise of music streaming and algorithmic playlists may be reducing demand for certain kinds of music festivals, especially diverse, multi-genre ones.

Despite the fact that streaming services offer consumers unlimited access to virtually the entire library of recorded music, algorithms, he argues, are siphoning music listeners more and more into niche “echo chambers,” where the new stuff they listen to is similar to the stuff they already listen to.

Historically, radio stations and MTV and music magazines and blogs may have exposed music listeners to a wider, more diverse range of new music. With algorithms playing a more homogenizing force on musical tastes, Page argues, consumers may be less into big music festivals filled with a bunch of artists from different genres they may have never heard of.

“So if I look at a multi-genre festival poster and I see all these different bands of all these different styles, my gut reaction is, ‘That's a playlist that's been created for somebody else,’” Page says.

That said, many single-genre festivals seem to be struggling too.

The most compelling argument Page makes: a generational change may be affecting demand for music festivals. Teenagers and early twentysomethings have historically been the core age demographics for festival-going. But this stream of new ticket buyers may be more of a trickle than it was in the past.

During the festival boom between roughly 2010 and 2020, one leading explanation was that millennials, then mostly in their teens and twenties, preferred spending on experiences rather than on things. They liked going places. They liked socializing. They liked drinking booze and doing drugs. They liked hooking up.

Not to get all “kids these days,” but kids these days… Research finds that Gen Z drinks less alcohol. They do fewer drugs. They have less sex and fewer partners. And they’re lonelier. In his best-selling book, the social psychologist Jonathan Haidt has famously labeled them “the anxious generation.” Haidt argues that Gen Z is spending too much time on social media and playing with their phones — and it’s making them less social and more isolated and depressed.

In a similar vein, Page argues social media and also the legacy of pandemic lockdowns and school closures a few years ago have made young people more socially atomized. And so, Gen Z, he suggests, may be less amped about going to music festivals — an intensely social activity — than previous generations.

Festivals are for IRL friends

Investigating why so many festivals are struggling, Page and his colleagues recently conducted a survey in the UK. They asked young people why they were not going to festivals. “And one of the most popular responses we got from that audience was, ‘I didn't think I had a friend I could go with,’” Page says. Sad!

In Australia, where we have some data, the number of young adults attending festivals fell “from 41% of all ticket buyers in 2018-19, to 27% in 2022-23,” according to a report from the Australian Associated Press. Australians in their mid-to-late twenties are now the largest demographic of ticket buyers, not younger adolescents.

Meanwhile, many millennials, who drove the festival boom last decade, are now older and have young kids and family and career obligations. They are less likely to want to attend multi-day festivals, which often involve standing in the hot sun, immersing yourself in swarms of people partying hard, and sleeping in the dirt.

Interestingly, some of the storied, big-name festivals that arguably cater more to older generations seem to be doing fine. For example, the Newport Jazz Festival, which celebrated its 70th anniversary this year, easily sold out all three days.

Despite the slump, the reality is there will always be a market for rocking out at music festivals. The crucial question for promoters these days: how big will that market actually be? Many festivals are now having to, um, face the music and realize it's maybe not as big as it used to be.