This guy has a very cool job... and knows how music festival economics became very big business
Melvin Benn is CEO of Festival Republic, the company that owns Electric Picnic and many other music festivals. He's had one of the most interesting careers possible, from running anti-apartheid concerts in the 1970s to fighting the UK government's attempt to crush raves. Benn spoke to Sarah McCabe about the economics of festivals, why big acts deserve big pay cheques and why Electric Picnic is a jewel in Festival Republic's crown
Published 21/08/2016 | 02:30
Melvin Benn has a very cool job.
As chief executive officer at Festival Republic he oversees Latitude and the simultaneous Reading and Leeds festivals in the UK - the oldest popular music events in the world.
Festival Republic also encompasses Lollapolooza in Berlin and Electric Picnic, which takes place at Stradbally Hall in Laois this September and is the biggest event on the Irish music calendar. Over the course of his career he has built some of London's most iconic music venues and operated the license for the Glastonbury Festival in Somerset.
Once the preserve of counter culture, music festivals and live arts events have spawned a huge industry with a far-reaching influence and big profits.
Take one of the world's most successful, California's Coachella. Fifteen years ago, Coachella was a sparsely attended party in the desert of 1,500 people. In 2015 Forbes estimated that the festival, which is now spread out over two weekends, grossed $84m with 198,000 in attendance. A general admission ticket set concert-goers back $375 while access to the VIP area cost an extra $524.
When Benn started out, things were different. Originally from Hull in Yorkshire, he got a taste for the industry in his early 20s by running concerts to raise money for political causes such as the anti-apartheid movement, industrial disputes and nuclear disarmament.
"I came down to London in the mid 1970s and got involved in politics. It just seemed like a good idea to combine that with music. They were labours of love that became big events - we had 10,000 people showing up to some of them," he told me.
In London he forged the first of many Irish connections which would go on to be a recurring theme throughout his career. His friends were members of Irish groups such as the Battersea and Wandsworth Irish Group which held regular London gigs to showcase Irish music and bring the London diaspora together.
He founded his first business with a friend from Trim in Co Meath, the Workers Beer Company, to sell alcohol at concerts and events. The Workers Beer Company is still the main beer retailer at many concerts and festivals across the UK and Ireland.
"The industry was still in its infancy in the 1970s and 1980s, there were very few permanent, recurring events," recalls Benn. "You had Lisdoonvarna and occasional things in Leixlip in Ireland, while Reading and Glastonbury were the only real permanent festivals in the UK. Reading would have had a maximum of 20,000 people and Glastonbury would have been the same. People who went to festivals back then were removed from the mainstream - it just wasn't the done thing. It's very different now."
In 1988, Reading Festival went bankrupt. Its owners decided to offload it and offered it to all of the UK's major music promoters. Nobody wanted it - except for Vince Power, a friend of Benn's from Tramore in Waterford.
Vince Power was the founder of Mean Fiddler, a company which started life in 1981 as an eponymous venue in Harlesdon in London. Its stage would later host names like Van Morrison, Johnny Cash, Paul McCartney, The Pogues and Christy Moore. Power and Benn decided to team up and Mean Fiddler took over Reading festival.
The pair soon got involved in the launch of the first major Irish music event in London, the Finsbury Park Fleadh. The Fleadh would become a regular stopover for bands like the Hothouse Flowers and U2 and artists like Sinead O'Connor. Over the course of the 1990s it swelled to 30,000 attendees and Mean Fiddler took it to the US - to diaspora-rich cities like Boston, Chicago, New York and San Francisco.
"You can see that Ireland is absolutely entrenched in my history, despite the fact that I have no Irish roots at all," says Benn.
"The business really took off from there. Vince and I helped to create Homelands, the Tribal Gathering, Creamfields. We were really enjoying ourselves. Mean Fiddler was also expanding in London, opening up lots of new venues… It became quite a big business."
What were the highlights of that period?
"Every day was a highlight. What we were doing was creating a culture in a way - a culture of festivals. Only a really small amount of people were going to festivals in the 1970s and 1980s. We were the first to put two stages up which played simultaneously at an event, the first to add comedy, the first to present a major Irish music festival in the heart of London, to find a way around the attempts to outlaw illegal raves."
In 1994 the British government attempted to wipe out flowering rave culture with the passing of Section 63 of the 1994 Criminal Justice Act, which gave the police the power to shut down events featuring music "characterised by the emission of a succession of repetitive beats". Benn and Co responded by creating one of Britain's first properly legal raves, with police cooperation and a license.
"Almost everything we were doing at that time was new," he says.
Another of his forays into Ireland was one of Europe's first dance music festivals, Homelands - held at what was then the holiday camp at Mosney but would later become the centre for asylum seekers which it remains today. For Homelands he worked with Irish music promoter John Reynolds, with whom he would later found Electric Picnic.
He also took over the running of Glastonbury for a period. "Michael Eavis and I have been friends since the early 1980s. We started doing the beer for them. Then around 2000 or 2001, the council in Somerset refused to grant Glastonbury a license - they said the organisation didn't have the right structures and management controls in place. Michael reached out and I got involved to manage and produce it, with Mean Fiddler.
"I am no longer operationally involved, but I am still close with Michael and the festival."
Appetite was building for another major Irish event. Around 2004, plans were hatched for what would become Electric Picnic at Stradbally Hall in Co Laois. Benn teamed up in a personal capacity with Peter Aiken and John Reynolds. "We wanted to create something completely different," he says.
At the same time, Power and Benn were coming to the conclusion that it was time to sell Mean Fiddler. A joint venture between US group Live Nation and Denis Desmond's Gaiety Investments made an offer, and bought a majority stake.
"My old partner Vince Power stepped out - but I decided to stay on. I didn't know what was going to happen at that point. Live Nation was a big American corporation and it could have gone very badly - but it didn't, it went really well."
Live Nation is an industry behemoth which controls artists, venues, events and ticketing all over the world, having merged with Ticketmaster in 2010.
Sales in the first six months of 2016 were $2.18bn, up 23pc. Billionaire John Malone's Liberty Media Group, a familiar name in Ireland which owns Virgin Media, TV3, UTV and a host of hotels, is the company's largest shareholder.
"There's no denying that Live Nation is a big business and they live and breathe corporate governance in business terms. But in creativity terms they are fantastic."
The Mean Fiddler name was sold to British promoter The Mama Group ("We got a ridiculous offer for it… ironically they were later bought by Live Nation") and the business was renamed Festival Republic.
Benn stepped out of Electric Picnic when he did the Live Nation deal. But the festival found its way back to him in the years that followed.
It was hit hard by the recession. "The financial crisis in Ireland in 2008 had a major impact on Electric Picnic. People simply didn't have the money any more."
Festival Republic made an offer around 2009, buying Aiken and part of Reynold's stake. It took full control in 2013, putting Benn at the helm.
He clearly adores the event. "The exciting thing about Electric Picnic is that it has a uniqueness you don't find anywhere else. All of my mostly UK-based staff consider it their favourite festival, they all want to come to it. This is a cliche but it's because of the craic."
For a period, it was losing money. "We were losing customers because the ticket price was so high - it was €229 for the weekend. That persisted up until 2013."
"That kind of price was fine in 2008 when money was growing on trees, but when the crisis hit it became too much. Reading and Glastonbury were cheaper. People just weren't coming back, they couldn't afford it anymore.
"The first thing I did was change the pricing model. We brought in a loyalty factor - if you could show you had attended three times before, you could get a ticket for €149 and so on. We have kept that element and it has really contributed to the festival's growth."
It has expanded from 17,000 people in 2013 to 55,000 this year - growing by about 25pc between 2014 and 2015 alone. Some complain that it is now too big.
"This year it has grown by a much smaller degree, from 51,000 to 55,000, much more modest. And we do not intend to expand the number of people attending at all next year," says Benn.
Festival Republic appears to be thriving too. Figures lodged with the UK's Companies House show Festival Republic Ltd made a pre-tax profit of €3.86m in 2015, on revenue of £41.1m. It paid out a dividend of £5m to shareholders Gaiety Investments and Live Nation.
The company runs other events in Ireland - chiefly Longitude - but does that on behalf of Irish group MCD. It also runs concerts in Marlay Park and Kilmainham in Dublin.
"Festivals have become embedded in modern culture," says Benn. "You get every spectrum of society attending - the butcher, the baker, the candlestick maker, but also the lawyer and the accountant.
"If you're 70, you will still be comfortable at Electric Picnic. I say that because the churches around Stradbally run our information and lost property points for us. Both Catholic and Protestant churches are involved, and it's a way for them to raise money. The 70-year-olds enjoy it just as much as the 25-year-olds.
"There are thousands of people who attend who wouldn't be identified as 'counter culture' by any means. Festivals have become part and parcel of modern culture."
But why? One reason suggested by commentators is the decline of music sales. As millions of us sign up to online streaming services like Spotify, concerts and festivals have become one of the only ways the music industry can still make money.
More than half of all music revenue now comes from lives events, according to consulting group PwC.
Artists' fees are the single biggest cost for any festival. The prices commanded by the biggest names are closely guarded - but headliners at major music festivals are thought to receive high six-figure sums. In 2008 it was reported that Coachella paid $2m for Prince to play.
"The biggest names in anything command high fees and our headliners command a substantial amount," says Benn, unwilling to disclose quite how much. "But the reality is, they deserve it. These are bands everyone wants to see."
Their are a litany of other rising costs that live events must grapple with too. Research published in the UK in June suggested that as many as one-in-ten events could close down by next year because of precarious finances. Even Glastonbury has bad years - pre-tax profits for the event were just £86,000 in 2014.
But the biggest events are still unlikely to disappear anytime soon. Festivals' popularity also comes down to the stresses of modern life, says Benn.
"Peoples' lives are under far more pressure than they were in the Seventies and Eighties, certainly from a work and education perspective. I think people really value the chance to blow off steam and come together to enjoy themselves in a community, in a meaningful way."
On his future plans, Benn says "we never stand still".
"But I must say I feel incredibly proud of where we are, particularly of Electric Picnic - it is the jewel in Festival Republic's crown. It is a real joy, I can't tell you how much, to be a part of it - and I am only a small part of it. So many people contribute."
There are lots of new announcements this year - Benn cites a new area called The Hazel Wood, where Cathy Davey will launch her new album, as one of the things he is looking forward to the most - plus a complete refresh of the Mindfield's literature and theatre area, and swimming in the Stradbally lake.
"I just love Ireland," he says. "The very first time I became a director of a company, it was with an Irish partner.
"Ever since then I have never been a company director without an Irish partner. Somehow the Irish have always made me feel welcome - both in England and Ireland - even when they really didn't have to."
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