Thursday, June 10, 2010

Who Says the Music Industry Is Kaput?

By paying attention to details, Nashville festival Bonnaroo has become a thriving business

It was the fall of 2001, and Jonathan Mayers was stuck. He had built Superfly Presents—the New Orleans-based concert promotion company he ran with three friends—into a local success, staging some 120 shows a year and earning around $1 million. However, Mayers and his partners—Rick Farman, Richard Goodstone, and Kerry Black—were tired of the nightly grind, the razor-thin profit margins, and the battle with industry colossus Clear Channel Communications. They realized there was only so much money to be made staging rock and jazz shows for a few hundred people a night. "We saw there was a ceiling to what we were doing," Mayers says. "We had to take a risk."

That decision led to the founding of the Bonnaroo Music and Arts Festival, a 100-band jamboree that has been the top-grossing music festival in North America for eight years running. This year, from June 10-13, 75,000 fans will make the pilgrimage to a 700-acre farm an hour southeast of Nashville for what observers ranging from Rolling Stone to the concert chronicler Pollstar have called the best music festival in the country.

As live concerts have supplanted album sales as the music industry's chief moneymaker, Bonnaroo (which means "good times" in Creole) has flourished. Ticket prices range from $250 for a general-admission pass to $18,500 for a luxury package that includes an air-conditioned bus, on-stage VIP viewing platforms, and a chauffeured golf cart to shuttle between the two. Meanwhile, the promoters have 16 other profit centers on-site, including concessions, merchandise and, yes, paid showers. Last year the festival grossed around $30 million, approximately $18 million of which came from ticket sales. And since, according to Goodstone, Bonnaroo "funds itself on ticket sales," the other $12 million was profit.

"It's really as modern a music formula as you could have right now," says Ray Waddell, the longtime touring guru for industry publication Billboard. "They're focused on the live experience, but they also branch off into these other directions—licensing, media deals, the Web. They've really broadened the revenue stream."

The first Bonnaroo, held in 2002, featured mostly jam bands and cult acts such as Ben Harper, Jack Johnson, and the Grateful Dead's Phil Lesh. As the festival has grown, it has diversified to encompass an eclectic mix of A-list stars, from Radiohead and Pearl Jam to Metallica and the Beastie Boys. This year's headliners offer something for every demo: Jay-Z and Kings of Leon for the college kids, Stevie Wonder for the boomers, and the Dave Matthews Band for the hacky-sacking base. Bonnaroo also books comedians, including Conan O'Brien this year, and features such amenities as a film tent, gourmet burrito and microbrew stands, and TV banks for watching the NBA finals and, this year, the World Cup.

Daily programming runs from noon until 4 a.m., and an estimated 90 percent of concertgoers stay on-site—either in tents or in one of the fully outfitted RVs provided (for a price) for the camping-averse. "You don't go home at night and turn on CNN or check your e-mail," Farman says. "It's an all-encompassing experience." The goal is to create the kind of communal, anything-goes atmosphere where, say, Bruce Springsteen can play a three-hour headlining set on Saturday night, jam with Phish on Sunday, and in between, stay out until 4 a.m. watching indie-rock band MGMT with his teenage son (all of which happened last year).

"We pay attention to details—that's the business model," Mayers says, sitting on a couch at Superfly's scrappy Manhattan headquarters. The company's aesthetic is college-pad chic: lava lamps, vintage concert posters, jeans, and flip-flops. Scribbled on a dry-erase board is one of their mission statements—"selling authenticity"—while the office Wi-Fi password jokingly recalls rapper Kanye West's diva-like performance at Bonnaroo 2008. (It's "kanyesucks.") The vibe isn't too far removed from Superfly's do-it-yourself early days, when Goodstone once spent a night in jail for posting an illegal concert flier.

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