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Reeperbahn Campus: How important is sponsorship to festivals?

By | Published on Friday 24 September 2010

The festivals sector has had more than its fair share of the music sponsorship pound over the years, but just how important are cash-generating brand partnerships to major music events these days? Well, according to the festivals panel at the Reeperbahn Campus conference yesterday, sponsorship remains “nice to have” rather than essential revenue stream. 

“It’s true that ticket revenue alone won’t take our event into profit”, admitted Eric van Eerdenburgh of Dutch festival Lowlands. “But it is bar revenue, not sponsorship, that we rely on. Obviously, sponsorship is nice to have, but it’s not a major earner. And you’ve got to consider what the brand wants in return. We’ve turned down sponsorship from companies who wanted too much. The atmosphere of our event is key to our business, so that can never be compromised for a sponsor’s benefit”. 

The other festival directors on the panel – including the people behind Denmark’s Roskilde, Switzerland’s OpenAir St Gallen and the UK’s Summer Sundae – agreed that while they did have some sponsorship income, it wasn’t something they especially relied on when planning their budgets. 

Could a festival operate with no sponsorship money whatsoever, as veteran promoter Vince Power vowed to do when he returned to the festival market in 2008, wondered moderator Allan McGowan of Vip News? Carlos Zarmutek of German reggae festival Summerjam said it could, because “with my event, given the genre we focus on, we’ve never been a big target for sponsors, and we have been able to operate just fine without them”. 

So, really it all comes down to the booze. A fact which has, in itself, caused issues for some European festivals, included some of those represented. “We, like a number of festivals, have tried to limit the amount of alcohol our ticket buyers bring with them on site”, OpenAir St Gallen’s Christof Huber revealed. “And that’s a tricky one, especially when you’re an established event that hasn’t previously had such restrictions”. 

Huber, and others, implied that the need to regulate the amount of cheap booze festival-goers bring with them had become more of an issue of late, possibly because, given the economic climate, ticket buyers are looking to cut their personal expenditure when doing the festival thing. 

“We know we lost some ticket sales because of the new drink quota rules, even though our competitors have similar restrictions”, van Eerdenburgh said. “But bar revenues are an essential part of our business, so we need to find a balance that means things work commercially without annoying our customers”. 

Solutions to that challenge were left for another day, though all seemed to agree relying on increased sponsorship revenue to make up for a bartake shortfall wasn’t a viable option.

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