The music industry
The business of live music

Music festivals are not just an important part of the German cultural scene; they are also a major economic factor. The industry was booming until the COVID-19 pandemic hit.

Very few people would have ever heard of the small North German town of Wacken today if it werenct for the music festival of the same name, Wacken Open Air, that draws more than 85,000 visitors every August. First held in 1990 in a gravel pit in Schleswig-Holstein, it is now one of the biggest metal festivals in the world. Back then, admission to the two-day festival with six regional bands and 800 attendees cost just six euros. Anyone hoping to join in the fun in Wacken on the first weekend in August in 2019 had to shell out 210 euros and be quick about it: 75,000 tickets were sold out in just under 24 hours.

Memorialised in the documentary Full Metal Village, the festival now not only enjoys international cult status – its tremendous size has also made it an important economic factor for the region and the organisers: eight stages for around 150 bands on an area of 220 hectares hemmed in by 40 kilometres of construction fence. And until recently, merchandisers, sponsors and partners were raking in the money from the Wacken brand. There were Wacken T-shirts, Wacken beer, other Wacken festivals and even Wacken cruises and Wacken skiing trips. In 2008, Sparkasse Westholstein began cranking up consumption with a prepaid card issued just for the festival. The credit union reported more than one million euros were withdrawn from ATMs in the week around the festival. More than 85,000 visitors came to Schleswig-Holstein for the 30th Wacken Open Air in 2019. | Photo (detail): © picture alliance/dpa/Axel Heimken

Who makes money from the festival business

Just based on sheer size alone, it is easy to see why German music industry market is worth billions of euros. And counting: In 2019 alone, the industry’s total revenues rose 18 percent to 13.6 billion euros, according to the second edition of the “Music Industry in Germany” study by Berlin-based consultancy DIW Econ. This made the music sector the second strongest economic branch of the media industry with around one third of revenue coming from live music events. Serious music lovers are willing to pay good money to go to live events: In 2017, for example, private households spent around 3.1 billion euros on festivals and concerts.

Most of these live music events were organised by the nearly 1,300 concert promoters in Germany. These include festival and tour organisers, who in turn work with local promoters, like the operators of nightclubs and other venues. According to the Federal Statistical Office, they generated more than two billion euros in revenue in 2018, 77 percent of which came from ticket sales alone. For the venue and nightclub operators, sales from goods such as drinks and food were the main source of income. Technology, staffing and logistics represent another key sector of the event business.

At the same time, the music industry also generates revenue for other sectors like the travel industry. In 2019, Germans embarked on around 6.5 million overnight trips to listen to music, almost 90 percent of which were short getaways. This added three billion euros to the revenue generated by music tourism for a total of 13 billion euros in 2019. A weekend trip to a festival is more than just the price of admission and involves spending money on travel, accommodations, meals and merchandise. This is why cities frequently feature their music events and venues front in centre in tourism advertising.  

A virus strikes the festival world

In 2020, the COVID-19 pandemic abruptly and devastatingly halted the music industry’s steep growth trajectory of recent years. In 2021, the industry is plagued by uncertainty and lost revenue. The event bans plunged artists, concert promoters, nightclub and venue operators, as well as the agencies, ticket service providers and other associated service providers, into an economic crisis due to significant loss of income. Thousands of jobs are at stake because the products and services related to all branches of the music industry are so closely intertwined. And there was still no recovery in sight in summer of 2021.

So as early as 2020, 40 German music festivals representing a total of 600 nationwide music events appealed to politicians for help. But the 2021 festival summer was also a disappointment. Renowned music festivals including Hurricane near Hamburg, Southside in Baden-Wuerttemberg, Natur One in Hunsrück, Fusion in Mecklenburg-Western Pomerania, Lollapalooza Berlin, and Wacken, were all cancelled. Some new formats were introduced, like the Strandkorb Open Air festival series, which got a mixed response from both visitors and artists. In the open-air arena, spectators sat in roofed wicker beach chairs intended to create a relaxed, holiday mood while ensuring everyone stayed a safe distance apart. Visitors could move around the venue on a system of one-way streets and food and drinks had to be booked online – festival light, so to speak. The industry is holding out hope that more options will soon be available again. Festival light: The Strandkorb Open Air meets all the hygienic requirements. | Photo (detail): © Gerd Wiggers/Strandkorb Open Air