Festivals have been part of our culture since time immemorial. Every community in the world has a variety of festivals whereby its members celebrate a unique occurrence or happening. In modern times, several annual festivals are celebrated in different communities all around the world. Different festivals are usually carried out for different reasons. Therefore, the manner in which they are carried out are different.
However, unlike the traditional festivals that were usually carried out and attended by members of a specific community, culture, or background, festivals of modern times usually attract people from different cultures, backgrounds, religion, and nationalities. Sonar Music Festival is a prime example. This festival has been carried out in the month of June for the last 17 years in Barcelona. It usually attracts people from different cultures, backgrounds, and nationalities.
The event not only embraces art but is also acts as a major tourist attraction earning the city of Barcelona millions of dollars in the three days in which it is operational. This paper shall therefore conduct a micro and macro analysis of the festival industry and determine its stakeholders. In addition, a SWOT analysis of Sonar Music Festival shall be conducted. This will bring a clear understanding of the festival industry and the impacts that Sonar Music Festival has.
Macro Analysis of the Festival Industry
To understand the external factors that affect the operations of the festival industry, it is essential to conduct a macro analysis. To achieve this, a PESTEL analysis shall be conducted to determine the political, economic, social, technological, and legal factors that affect the industry. This shall bring out essential information that surrounding the operations of festivals in their external operating environment.
Due to their nature, politics and society have always been inseparable. It is due to this fact that politicians get involved in almost all societal and community events. Festivals are one of the events in which politicians attend to get in touch with the people. At the same time, it is through such events that individuals get to learn about the political norms and ideologies of a given community, society, or nation. As a result, festivals have always been regarded as one of the ways in which politics of a given region can be developed from.
Traditional festivals did not have a lot of economic impacts on the locality in which they were held at. This was because most of the people who attended such events were locals hence they used locally available materials to sustain the function. However, festivals of modern times are different. These events not only attract people from one locality or region but they also attract fans from all around the world.
Therefore, at the time when such events are in progress, there is always a high influx of non-locals into the region. Through their expenditures, these individuals manage to boost the revenues of the towns or cities that they are being held at. These festivals are also essential arenas for the marketing of new and existing brands of local or international companies. This greatly increases the popularity of brands made by small and medium sized enterprises.
In addition, these festivals create employment opportunities for the local population. This in turn increases their living standards and the GDP of the nations in which such events are held (Hooves, 2006). The diagram below shows the expenditure of locals and non-locals in the Buxton International Festival held in England in 2010 (Hooves, 2006).
From the graph, non-locals spent over £275,000 while locals only spent roughly over £45,000. This therefore shows the importance of non-locals in the promotion of festivals. Given the high revenues that these events have, it is this essential for the organizing committee and the local authorities to come up with effective planning and marketing strategies to ensure that their towns and cities fully benefits from them.
Festivals are mainly cultural events that aim at depicting a specific part of the host communitys culture. Given the fact that modern festivals normally attract a lot of people from different cultures and backgrounds, festivals such as Mardi Garr, Sonar Music Festival and Buxton International Arts Festivals provide an opportunity for people from different cultures and backgrounds who have a common interest to meet and interact.
This is essential in the building and development of close ties with people who have different ideologies and come from different cultures and backgrounds. At the same time, the non-locals have the opportunity of understanding and appreciating the culture of the host community. Additionally, festivals also give the people who have attended such ceremonies a deeper and better understanding of the passion or interest that attracted them to the event in the first place.
This is achieved through performances and exhibitions from different individuals within the arena. This makes the individuals who have attended the event not only to appreciate the event itself, but also to develop their interest in arts. This is essential in building the character of an individual and the community at large.
Festivals are often viewed as galleries in which the participants showcase their latest developments in their respective fields. It is due to this fact that festivals and galleries embrace technology and provide a favourable platform upon which it can be developed on a variety of aspects.
Sonar Music Festival, for instance, provides an avenue through which music technology can be presented to the public. At the same time, the same technology can be developed to bring out better results in music and live performances. At the same time, such events utilize hi-tech technology to ensure that the audience has the best experience ever.
This is achieved through hi-tech audio systems, visual systems including High Definition (HD) displays, cameras all over and so on. It has also been a tradition for such events to be aired on TV for fans back at home. The use if ICT has also been incorporated to enhance the process of purchasing tickets, accommodation bookings and so on. Thus, the success of modern festivals highly relies on technology.
To ensure that festivals are successful in the end, they have to abide by the rules and regulations of the local authorities of the towns or cities and nations that they are in. In most cases, attendants are made aware of the rules.
This not only ensures that peace and security is maintained but also guarantees that the operations of the festivals are conducted in an effective and efficient manner. However, there have been reports of riots, looting, and use of illegal drugs. Local police have always been on patrol to prevent such events from happening and if they do, the perpetrators are always arrested to face the justice system.
Micro Analysis of Festivals
To fully understand the festival industry, it is essential to conduct a Porter 5 forces analysis. This analysis normally focuses on the five main factors that affect the operations in a specific industry. With this understanding, it shall be much easier for organizers of festivals to have a clear cut understanding of the industry hence come up with effective strategies that will make them stand at a competitive edge over their rivals.
The level of competition in the festival industry is very high. This is due to the fact that numerous festivals are held all around the world all year round. In terms of genre, similar festivals are also held all around the world either within the same locality or internationally. In Europe for example, several music festivals are to be held in May 2012. These include:
- Sonar Music Festival in Barcelona
- Nuits Snores in France
- Rock in Rio Lisboan in Portugal
These are just but music festivals. There are several festivals of other genres that are to be held especially during the summer season.
The high number of rival festivals present in the festival industry has created a high substitution effect. People who attend such events have the opportunity of choosing from a variety of events to determine which one they will attend.
This has thus reduced the overall revenue that a specific event would have earned. Thus, to avoid this, modern events have been organized in a manner that the attendants experience a different and better event. This differentiation strategy has been successful in several events and has increased sales tremendously.
The buyers in this industry are also powerful. This is due to the high level of substitution that is present in the festival industry. To receive high attendance rates, festivals have been reducing the prices of their tickets in addition to other auxiliary services that the customers can enjoy. This has greatly increased the level of competition in the industry.
However, it is essential to note that most of the buyers in this industry are non-residence. Thus, to attend these events, these individuals have saved for a long time hence they expect maximum satisfaction on the time and money they spend in these festivals. It is due to this fact that the organizers of these events try to ensure that their events become better with time to attract new customers and maintain existing ones.
Entrants into this industry do not face a lot of barriers. However, conducting a major festival is capital intensive. In addition, for an event to be popular and successful, it needs a lot of time to grow, develop and to gain recognition among the general public. Most importantly, several formalities have to be adhered to. This greatly reduces the threats of new entrants in the short run. However, once established, new entrants can greatly affect the operations of established festivals.
Shareholders of Festivals
The main shareholders of festivals are the local community. It is the local community that benefits from festivals in terms of the experience and revenue earned from the event. Local authorities also benefit from festivals in terms of the revenue earned and the rise in popularity of their towns, cities and states.
The organizers of festivals are also stakeholders of the events. They benefit from the event by passing information and messages through the themes presented in the event. In addition, they also benefit from the profit earned by organizing the event. The last group of shareholders are the individuals who attend the festival. This group benefits by satisfying their interests, socializing and gathering new information and ideas from the entire event.
SWOT Analysis of Sonar Music Festival
Sonar Music Festival has been taking place since 1994 this years event expected to be its 18th event. This event showcases a variety of music a multimedia art displays. The event has been held in various parts of Barcelona, Spain and has become a cultural mark of the city. To facilitate its operations, Sonar Music Festival has several strengths.
One of its major strength is its name. As it has been stated earlier, the event has been held for the last 17 years. In all these instances, it has been successful and has managed to meet the needs and expectations of the attendants who come from all the corners of the globe. In the process, the event has managed to become popular and develop a strong name and desirable reputation. This is essential to its success.
The manner in which the event is planned and advertised is also strategic. The event is advertised in all forms of media including social media and network sites. This manages to capture the attention millions of people from all around the world hence increasing its attendance and revenues earned. However, the major strength of the festival is its organization. The event occurs in the third week of June at a time when the weather is conducive for outdoor activities.
The event is also held for three straight days. This ensures that the people who attend the festival have ample time to enjoy the event to the fullest. The festival is also divided into day and night each one having different events. However, the night event showcases performance from renowned local and international artist. The organization in terms of security, transportation, and accommodation is also superb. In 2010, the event attracted over 80,000 individuals (Sonar, 2012).
The major weakness of the event is the lack of proper law enforcement due to the huge number of attendances. It has been common for people to use illegal drugs, loot and commit other petty offences. In addition, instances of sexual misconduct that goes against the local norms have also been reported on several occasions. To ensure that future events are successful, the management needs to come with measures of controlling them.
The increase in popularity of the event gives it a great opportunity to grow and earn more revenue in future. At the same time, the stabilization of the world economy from the financial crisis that commenced in 2008 has increased the spending capability of individuals who attend the event. Furthermore, as more people understand and appreciate the theme of the festival, the number of people attending the festival is expected to increase.
Despite this, the major threat of this festival is competition posed from other festivals. During this period, there are several festivals that occur in Spain and all around Europe. Therefore, to ensure that the event stands at a competitive edge, the organizers need to ensure that the people attending the festival achieve their needs and expectations at the best cost possible. This will guarantee the sustainability of the festival in the long run.
Hooves, T 2006, Maintaining the Global Competitive Edge of Edinburgh’s Festivals, viewed 11 May 2012, https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CGIQFjAE&url=http%3A%2F%2Fwww.aeaconsulting.com%2Freports%2FThunderingHoovesFullReport.pdf&ei=blGtT7XNFsq_0QWjtpCsCQ&usg=AFQjCNFfKejb1-yBpu5kJOvRyv8FZYGxgg&sig2=CwSPa0xoF_XG88l1BncetA
Sonar 2012, What is Sonar, viewed 11 May 2012, http://www.sonar.es/en/pg/what-is-sonar