Page last updated at 05:35 GMT, Friday, 11 July 2008 06:35 UK

UK festival fever on the increase

By Philippa Bradley
BBC Money Programme

John Lydon of the Sex Pistols
Heritage acts like the Sex Pistols are in vogue at festivals
This summer over 3 million of us will go to a festival, and with over 500 to choose from in the UK alone, what started as flower power is now big business.

Promoters are looking for their slice of what's estimated to be a billion pound industry but as John Giddings, organiser of the Isle of Wight Festival explains, it's not easy.

"It's the biggest gamble in the world. You gamble millions of pounds, hoping that people will buy tickets to see the bands you think they want to see.

"And if you're lucky you can make money at the end, but it's a very quick way of losing money if you don't get it right."

'Eternal teenager'

It's not just the young that promoters are hoping to attract. Many bigger festivals are designed to attract customers of all ages.

Melvin Benn, organiser of the Reading and Leeds festivals which attract 140,000 fans, says: "The idea of being an eternal teenager is very much on the agenda, and I'm rather pleased that it is actually, because that means that people still want to go to festivals when they're 30, 40 and 50."

Richard Cope, Senior Leisure Analyst at Mintel, agrees. "This is the first time we've had this generation who are traditionally time and cash rich, this is the first time we've had a generation in this segment who have grown up with rock and roll."

Kaiser Chiefs at the Isle of Wight Festival 2008
The Kaiser Chiefs at the Isle of Wight this year
Booking the right headliners to attract ticket sales is key, and it's no coincidence that so-called heritage acts like The Sex Pistols and The Police who can attract older, wealthier fans have headlined festivals this summer.

Ticket sales are increasingly important to festival promoters as lucrative sponsorship deals become a less popular source of income.

This year Melvin Benn decided against renegotiating a long-standing sponsorship deal with Carling.

"Very simply I didn't want it to be called the 'something something' Reading Festival or the 'something something' weekend.

"I wanted it to be called Reading Festival and Leeds Festival. That was a lucrative sponsorship and it will cost me a fair bit of money, but I think in the long run it was the right thing to do."

'Ethical standpoint'

And promoter Vince Power made his decision not to have branding and sponsorship a selling point of his Hop Farm festival in Kent.

He says: "Sponsorship is not going to stop, but it's refreshing as you go around the site you're not going to fall over a brewery sign."

The Sunrise Celebration Festival in Somerset turned down sponsors for different reasons.

Sophie Docker, one of the organisers, explains: "We won't make any kind of arrangements with any organisations that don't have the same kind of ethical standpoint that we do.

"We've had some offers from people that we've turned down because it's not green enough for us."

It's a principled stance, but does it make good business sense?

Glastonbury Festival organiser Michael Eavis
Glastonbury was reported to have ticket sales problems

Peter Florence, founder and organiser of the Hay Literary Festival, says its sponsorship deals are crucial.

"We have 5% of our budget from the public purse, 70% of our budget from ticket sales, but without the money from Sky and Emirates and The Guardian then we'd be stuffed."

But is the market getting too crowded? Sixteen summer festivals have already been cancelled, and even Glastonbury was reported to have had difficulty selling all its tickets.

Organisers say fans are just getting too picky and won't shell out unless the biggest acts are lined up.

However, it wasn't the sponsorship deal, or lack of it, that scuppered Sunrise, but the good old British weather.

With the worst flash floods for twenty years hitting Somerset the night before its opening, the event was cancelled: an indication that the festival business always carries unforeseen risks.

'More small festivals'

And what of the future? Vince Power thinks the current number of festivals is unsustainable.

"We're obviously going into a recession; at least that's what everyone tells us," he says.

"So I think there'll be a lot of festivals that will go under because of lack of sales. I think the big names will survive. The little ones, they will find it hard to make ends meet. "

Melvin Benn also believes there will be a shake-out in the industry.

"I think there'll be a continued diversity of more small festivals, but I think the number of people running them will be less.

"I think the big promoters will eventually buy up a number of smaller ones, no different to normal high street businesses in that sense."

The Money Programme's Festival Fever will be shown on BBC 2 at 1900 BST on Friday, 11 July.

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