LN: Festival Sponsorship Expected To Be Up 15% This Year
Live Nation COO Joe Berchtold told analysts last night that the music industry bellwether expects festival sponsorship to continue growing rapidly, and for the full year, to increase by over 15%. For the most recent quarter, Live Nation's sponsorship business was $45 million, up 13% over 2013 due to higher sponsorship revenue generated from new clients and growth in online advertising.
"Our business model, whether its an EDM festival or country festival, stadium show or a house of blues, our main job is to create that 23,000 show flywheel that spits out 60 million to 70 million consumers on-site and from that scale of consumer base, we've built 800 plus sponsors, and many of those sponsors are much deeper than a banner ad as you know," CEO Michael Rapino says. "Now within those brands, House of Blues, Insomniac, lot of our European festivals, they all have their own apps, their own websites and their own customer bases, that they do a great job on a one-to-one basis, talking directly to them, that's kind of a sub-brand. So we have a lot of sub-brands, but we have the scale of the master brands, that really is how we have unlocked 800 sponsors, and are unlocking our 400 million plus database."
WPP sponsorship consulting agency IEG is predicting a 4.4% increase in sponsorship spending of North American music venues, festivals and tours this year, to $1.34 billion. Last year, Live Nation recorded revenue of nearly $300 million from sponsorship and advertising.