Music Festival
Porter’s five forces analysis.
The musicians who conduct music festivals have a high bargaining power. Their music is unique and the tickets are fixed in price hence the price cannot be adjusted due to bargain. The industry is therefore attractive in that the uniqueness of industry makes it possible for the owners to have high market power.
The consumers have very low market power. There are no instances when the prices of tickets can be lowered to favor some customers. As a result, the industry is assured of a certain amount if revenues when the festivals are attended.
The industry faces no threats of new entrants because developing music is unique and a long process. It is also difficult to market another group offering festival services until it becomes famous. Therefore the threats of entry into the industry are very low (KOTLER P. & KELLER K.L, 2006).
There are many threats of substitutes in this industry. People can get entertainment from the television sets, download music and movies and music from the internet and also listen to social media. However, the industry will always have customers due to its special nature of live performances.
There is a lot of industrial rivalry in music festival industry. There are many groups that usually offer music festivals. However, each group always retains its market share due to its unique characteristics.
PESTEL ANALYSIS OF MUSIC FETSIVAL INDUSTRY.
The music festival industry is influenced by the political environment in that these industries must obtain license before they can operate. These licenses are different according to the number of people in the situation. These licenses help to control noise, harm to children, ensure public safety and avoid crimes in music scenes.
The economic environment also affects festival industry. The youths who are mostly unemployed cannot afford the tickets for entry into the festivals and this reduces the revenue in the industry. However, the prices of tickets have been increasing and are expected to increase hence this industry is expected to grow (PORTER, 2008).
The social environment also affects the festival industry in that social groups determine whether people will attend the festival. There are many social groups in the society and these groups guarantee revenues to the industry since studies have shown that the members of these groups are most likely to attend the festivals.
Technology has boosted festival industry in a way. People do not need to queue for tickets. Promotion of festivals has also been facilitated by the improvement in technology. The information can be passed to people through social networks and this has led to increase in the number of people who attend the festivals.
The music festivals are influenced by the environment of a given region. The environment determines the kind of people who are likely to attend the festivals. Learned people are more likely to attend the music festivals as compared to an environment with unlearned individuals. The intention to control environmental pollution has however affected the music festival industry negatively. This is because there are rules that have been put in place to control pollution and they make it difficult to organize a music festival (PORTER, 2008).
The legal environment has affected the music festival industry negatively in that some regulations make it difficult to organize music festivals. The attendants may also fail to receive the satisfaction they want due to copyrights laws. These laws make it difficult for musicians to play music composed by others and this may make the festivals have less attendants leading to less revenue to the festival industries (SEATTLE OPERA ASSOCIATION, 2006).
Swot analysis of music festival industry.
Strengths
-The advancement in technology has made provision of the services in this industry easier.
-The talents in the sector are unique.
- Performances are more attractive than any other kind of entertainment.
Weaknesses.
The prices of tickets are very high limiting some customers.
There are many other sources of entertainment
Change in population composition changes the demand of the services adversely
Opportunities
There are many countries that have no organized music festivals that have potential customers.
Technology can help to facilitate paid online music festivals.
Threats.
The increasing costs of living are affecting negatively the number of attendants at music festivals.
Music is easily downloaded from the internet with the modern technology.
Peers may share the information in live festivals hence the entire people benefit even if absent from the festivals. All these are likely to reduce the number of attendants of the music festivals (CARAH, 2010).
Letter.
The music festival industry is an attractive industry to invest in. In this industry, the owners of the will never lose their customers completely. All the stakeholders in the industry will benefit regardless of the fact that there are many competitors. This is due to the fact that the talents of individuals are different and each individual pleases a certain group of people. Therefore there is assurance of revenue in this market. The improved technology has further improved the future of the industry in that provision of services has become easier with the technology. People are able to buy tickets online hence there are no incidences of queuing to purchase tickets.
This industry is controlled by various factors. The legal environment affects this industry and the industry is required to observe the laws set. There are laws relating to piracy which is broken can adversely affect the individuals in the industry. The economic situation in the world is affecting the industry in that people prefer to seek for other forms of entertainment considering that tickets are very expensive (PRESTON, 2012).
There are many other threats in this industry in that people are even able to download these festivals after the performances for free. There are also other many attractive sources of entertainment that is available to the people. There is therefore a need to adopt new strategies to cope up with these challenges.
The industry should utilize the opportunities it has to ensure that it survives regardless of the threats in the industry. The stakeholders have the ability to come up with online music festivals that can be paid for or if downloaded, they must be paid for. They can also implement reasonable ticket prices to attract more customers. With these adjustments, the industry will perfume better. Regardless of the threats, the industry has a bright future since people will always seek for entertainment of their choice.
References.
PRESTON, C. (2012). Event marketing: how to successfully promote events, festivals, conventions, and expositions. Hoboken, NJ, John Wiley & Sons.
YEOMAN, I. (2004). Festival and events management: an international arts and culture perspective. Amsterdam [u.a.], Elsevier Butterworth-Heinemann.
CAMERON, SAMUEL. Handbook on the Economics of Leisure. Cheltenham: Edward Elgar, 2011. Print.
RECORDING INDUSTRY ASSOCIATION OF AMERICA (2010), Consumer Profile, [Online] (Updated 20 August 2009), Available at: http://76.74.24.142/44510E63-7B5E-5F42-DA74-349B51EDCE0F.pdf, [Accessed 5 August 2010]
PORTER, M.E. (2008) The Five Competitive Forces That Shape Strategy in music industry, Harvard business Review, January 2008.
GOODSTEIN, L. (1992), Applied Strategic Planning: How to Develop a Plan That Really Works in music festivals. New York: McGraw-Hill
INTERNATIONAL FEDERATION OF PHONOGRAM INDUSTRY, (2010), “IFPI Digital Music Report”, [Online] (Updated 15 January 2010), Available at: http://www.ifpi.org/content/library/DMR2010.pdf, [Accessed 5 August 2010]
KOTLER P. & KELLER K.L. (2006), Marketing Management in music industry, 12th ed., New Jersey: Pearson Prentice Hall
SEATTLE OPERA ASSOCIATION. (1974). A music festival industry for Washington State: interim report, September 25, 1974. Seattle, The Association.
GOLDBLATT, J. J. (2011). Special events: a new generation and the next frontier. Hoboken, Wiley.
LEONARD, M. (2007). Gender in the music industry: rock, discourse and girl power. Aldershot [u.a.], Ashgate.
CARAH, N. (2010). Pop brands: branding, popular music, and young people. New York, Peter Lang.
