Music will play out across the fields of Worthy Farm near the English village of Pilton from 23 June 2022 as the latest Glastonbury Festival gets under way.

What started out as a gathering of 1,500 hippies in 1970 has grown into probably the best known music festival in the world. Glastonbury today is a commercial behemoth, generating tens of millions of pounds in revenues that provide a significant boost to the local Somerset economy.

Conceived originally as a place for outsiders to embrace hedonism, escape the rules and expectations of modern capitalist society, and listen to some non-commercial bands, UK music festivals are now far more performative. They are a chance for the middle class to adorn flower headdresses and (briefly) enjoy camping, mud, drum circles, sun-warmed alcohol, mud, not showering, face paint and yet more mud. Establishment publication Conde Nast Traveller has even produced a list of the best ones to attend, for the more discerning consumer.

The huge commercial success of Glastonbury and other legacy festivals has led to a proliferation of these events to every corner of the globe. As they have spread and become more economically important, they have also become increasingly accepted as a leisure activity for polite society.

Music festivals are now vital tourism drivers in many regions, towns and cities around the world. They have even become promotional tools for business, and in some circumstances they are intrinsically linked to attempts to attract direct investment.

Which all feels like a long way from the sex, drugs and rock and roll origins of this cultural phenomenon.

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How music festivals drive economic activity

The first Glastonbury Festival, then known as Pilton Pop, charged attendees just £1 for a ticket and gave them a bottle of farm milk in exchange. Renamed Glastonbury Fair in 1971, it became free to attend for a few years in keeping with many other UK festivals throughout the 1970s and 1980s, which were also free events.

It was only when festival founder and organiser Michael Eavis made a concerted effort to stop people without tickets jumping the security fence in 2002 that Glastonbury really started making money.

According to Companies House filings, turnover for the festival quadrupled from £11m in 2002 to just shy of £46m for the financial year of the last time Glastonbury was held, in 2019. Gross profit over the period rose from £8m to almost £28m.

The price of Glastonbury tickets remained less than £50 until 1993, and under £100 until 2003, but 2022 attendees will have to cough up £280 (plus a £5 booking fee). Limiting attendance and booking increasingly mainstream and high-profile headline acts has seen demand for tickets reach an intensity that means they now sell out within minutes of going on sale.

Although the gross value added of Mendip District Council, the local authority Glastonbury sits in, has not grown at anywhere near the rate of the festivals turnover or profits, evidence suggests the festival does have an outsized economic impact on the region.

According to the council, the festival creates more than 1,000 jobs for the wider South West region, it accounts for one-sixth of annual tourism spend in Mendip, and during the festival 3,000 people pay for local accommodation, generating £500,000 of tourist spend.

In 2013, on-site spending at Glastonbury Festival (£32m) was less than off-site spend (£34m), and the event had an overall economic impact of £93m, according to the council.

While Glastonbury is the largest in the South West, the region hosts several major music festivals over the summer months, including Camp Bestival in Dorset, End of the Road in Wiltshire, and Bristol Sounds, which is held in the region’s largest city.

These events have helped the South West of England support more music tourism jobs between 2016 and 2019 than London.

How festivals can reinforce the international reputation of cities

Festivals require hundreds or thousands of workers in order to be put on as well as suppliers of myriad on-site goods and services. Yet much of this direct economic activity is limited to the build-up and duration of the event.

Mendip District Council produced a Glastonbury Town Investment Plan in 2021, which highlighted that the town attracted more than 50,000 international visitors every year but also stated that the town had a higher than average reliance on the gig and festival economy.

Festivals can have a more sustained economic benefit for host areas. however, if they can improve the image of the towns and cities they take place in. The archetypal UK festival occurs in a muddy field, yet in continental Europe they often take place in urban centres.

Donauinselfest, held in central Vienna, describes itself as the largest free-to-attend open-air music festival in Europe. The 2022 edition, kicking off on 24 June, is expected to attract more than three million visitors.

The festival takes place along the Danube across 13 different stages and showcases local and international acts playing modern pop music.

A spokesperson for the Vienna Business Agency highlights how Vienna is known for its historic cultural legacy of theatre, classical music and opera but that this legacy is often “a double-edged sword”.

“Vienna’s famous and historical arts and culture can often overshadow contemporary culture, creativity and innovation – and activities such as the Donauinselfest attract a broad, diverse crowd that is also interested in seeing another side of the city, one that shines with contemporary music, fashion, design, cuisine, and so much more,” the spokesperson said.

This image of Vienna as a home for contemporary as well as classical culture is vital to the city’s promotional efforts. “The city’s broad array of culture, from opera to contemporary dance to booming nightclubs to a really lively food scene, is something that attracts big international businesses looking for a new regional headquarters,” the spokesperson added.

Pulling off such a large and multi-streamed festival also highlights the city’s excellent infrastructure, public transport and public services.

How festivals can help raise the profile of a city

While some major festivals reinforce a reputation for culture, some locations are thinking about how they can be leveraged to build up a cultural reputation.

Reading Festival, which takes place on the outskirts of the town of the same name in Berkshire in the UK, is just one year younger than Glastonbury and also contributes significantly to its local economy.

In 2009, the University of Reading estimated that the total amount spent in association with the festival each year was £31m, and in 2020 the university calculated that the cancellation of Reading Festival due to Covid cost the town approximately £15m in income.

The South East of England, the region of the Reading Festival, is behind only London and the South West for attracting music tourism spending in the UK.

While the town of Glastonbury is relatively small and has modest ambitions for attracting inward investment, Reading is one of the best performing locations in the UK for foreign direct investment (FDI).

Nigel Horton-Baker, executive director of Reading UK, a partnership between public and private organisations to promote the town, says the festival plays an important role in raising the profile of Reading.

Reading UK surveyed around 100 tech professionals living in London about what they knew about the town and whether they would base a business there. “What was interesting was that there was a lack of information and knowledge about Reading… but they did know about Reading Festival,” says Horton-Baker.   

Reading and its sister festival in Leeds, in the north of England, attract a younger crowd than most festivals. Attending these events is often seen as a rite of passage for local school-leavers. This makes the image of the festival less business-friendly but could provide a platform to build a wider cultural image.  

Reading UK, Reading Borough Council and the University of Reading submitted evidence to the UK government in March 2022 arguing how culture can play an important part in levelling up the country, and Horton-Baker explains that investing in culture is central to local government plans to attract greater investment into Reading.

Reading UK acknowledges a “deficit in the borough council in terms of arts and cultural procurement and provision”, according to Horton-Baker, which has also been noted by major employers in the town. This led to a programme of events in 2016 grouped together as Reading’s ‘Year of Culture’.   

“Businesses need to be based in a location that is good for the strategic movement of staff; a good place to live, where you can recruit easily," says Horton-Baker. "It is hard to know how much of a deal-breaker a lack of cultural events is, but it is certainly important and businesses have flagged it up.”

Baker-Horton wants Reading to become a “city of festivals” to help change its reputation from a large market town to a modern, urban centre that hosts vibrant and exciting cultural events.

“We are working to develop a whole range of different types of festivals for different audiences from different cultural backgrounds," he says. "We want to formulate them as a cohesive group with a joint marketing plan.”

How music festivals can drive FDI

Perhaps the most striking example of building a business-friendly multi-festival format is South By South West (SXSW) in Austin, Texas. SXSW is not only an internationally recognised music and film festival but also a series of conferences aimed at established companies and start-ups in media, tech, creative, transport and gaming industries. All of the events take place over a two-week period at various venues across the city.

From its inception in 1987, SXSW has always incorporated keynote speeches as well as music performances, and now it is a major conference for creative industries to network and do business.

“When we do marketing trips around the US, we meet with C-suite individuals and so many have heard of South By South West, have been to it, have visited Austin and loved it. It is such a powerful recruitment tool for us,” says Roland Pena, senior vice-president, global tech and innovation, at Austin Chamber of Commerce.

SXSW has transformed the international image of Austin as a hub for creative people. Total attendance of the 2019 edition of the festival and conference was more than 280,000, and the impact of SXSW on the Austin economy has been estimated at $355.9m.

Austin Chamber of Commerce works closely with the organisers of SXSW to not just create networking opportunities for businesses around the festival but also to run events linked to the festival all year round.

Pena believes that the cultural capital Austin has built up thanks to SXSW is behind much of the success the city is enjoying.

Austin is the second-highest ranking metropolitan area in the US for jobs recovery since the outbreak of Covid-19, according to the US Bureau of Labor Statistics. Pena claims the pandemic saw companies allow employees to work from anywhere, and because so many chose to move to Austin, companies are now deciding to relocate to the city following the lifting of Covid restrictions.

“We created more jobs and had more relocations in 2020 than any previous year, and we just beat that in 2021,” says Pena.

While the success of music festivals has stripped them of some of the counterculture credibility that many of their original attendees so valued, their commercialisation has also made them appeal to a broader section of the population.

Many people want to live and work in places that foster these kinds of cultural events, which in turn attracts businesses to locate in areas that can offer them.

Investment promotion professionals would be wise to not ignore the potential of music festivals to drive economic activity.