How has the music festival Parklife affected the local economy of Greater Manchester?
I have been lucky enough that I was able to fund numerous music festival tickets and experience many weekends away from reality spending my time at music festivals with my friends. The last one I was able to go to I wondered about what it took to put on the mass production and how all the factors involved would affect the economy within the festival because of the regular high prices many of them have but how this would reach the real world economy. Music festivals have become a major aspect in youth culture especially over the summer months with thousands of people commuting all over the country in order to spend a weekend away listening to their favourite music with friends. Many new festivals pop up each year, as well as the iconic festivals which appear each year. One iconic festival in the north west of England is Parklife in Greater Manchester. It attracts thousands of visitors each year to the northern city. In my dissertation I am going to explore and understand how music festivals such as Parklife affect their local economy directly and indirectly through revenue generated within the festival itself as well as how it has affected the local businesses within Greater Manchester in areas such as employment, consumption and the environment. I will discuss how the primary and secondary research I have found has led me to these answers and the meaning of them.
What is Parklife?
Parklife Festival is an over 17s multi-genre 2-day music festival held at Heaton Park in Manchester, England. It is brought to consumers by the creators of The Warehouse Project. In the beginning of June each summer since it was founded on 12th June 2010 by Sacha Lord-Marchionne, it was previously a one day festival called Parklife Weekender held at Platt Fields Park but due to the rapid growth of its popularity it moved to Heaton Park, added a second day and was able to increase its capacity by an extra 30,000. Sacha Lord who is the key person behind the event is also the ‘Night Time Economy Adviser for Greater Manchester.' Each year Parklife is able to expand and grow by inviting a stellar musical line-up. Since Parklife is a metropolitan festival its entry times are from 11am to 11pm, so Parklife takes over various late night venues across the city of Manchester during the night to host afterparties to continue the festivities. Parklife partners up with renowned clubbing brands such as Elrow, Circus and Resident Advisor to host their own stages and sessions throughout the festival. Not only does Parklife focus on great music but it has funfair rides, magicians, installations, roaming entertainers and chill out zones.
What Is the demand-side of music festival Parklife?
Every business and economic objective can have an increase and or decrease in supply and demand but the exact science behind the supply and demand equation around festivals is hard to quantify, particularly as external factors are both uncontrollable and unpredictable, but research shows that the demand is definitely still there. (Tina Mermiri, State of Play: Festivals UK, 2013, pg.4).
The demand side of the industry are the attendees which is at its highest and people whom buy and download the artist's music which the rate is at its lowest. This is shown by the 3.9 million total festival attendance in the UK in 2016 (UK Music, 2017), an increase from the 3.5 million people who attended a music festival in the UK in 2015 (UK Music, 2016). Parklife has expanded over the last five years due to the increased demand to attend the festival this is shown from being at 70,000 capacity to 85,000 capacity.
The increase in ticket prices also shows that the increased demand has led to consumers willing to pay a higher price for the weekend due to the better line-ups and improved setups over the recent years. The first year that Parklife was held for the one-day in 2010 the tickets were priced at £29.50 over the recent years for the 2019 edition of Parklife, tickets were priced at £119.50. This is a £90 increase of 305%. The diagram below illustrates how an increase in demand can lead to an increase in the price level within an economy when everyone thing else is equal. This I shown by the original equilibrium being at P1,Q1. The demand curve (D) shifts right along the supply curve (S) from D1 to D2 to show the increase in demand this leads to a new equilibrium at P2,Q2, where both output and price has increased. This is what has happened to Parklife with its increase in price but capacity has continued to increase.
Due to the decline in demand for buying music and artists relying on live concert and festival tours in order to make money, many high profile musicians live concert ticket fees are very expensive and range between £50 - £500 depending on the tier of the ticket. This high cost leads to consumers buying tickets to music festivals instead of concerts due to the lower average cost and higher value of the experience as they would be able to watch multiple headliner acts over 1-5 days than a singular artist over one night. As well as that many artists from different countries won't always do an international tour but will for a high fee would perform as a part of a festival line-up so attending the music festival they are performing at as one-off would most likely be a fan and attendees one chance of seeing the performer live. Throughout my research I was able to establish a demand for Parklife between 16-20 year olds, the data found that 73.5% of people surveyed would want to attend a music festival like Parklife, with 87.5% answering yes or maybe to attending a music festival like Parklife, my findings can be seen in the graphs below.
What is the supply-side of music festival Parklife?
The supply side of the industry are mainly the music festival organisers and their contractors which build, hold and supply food, drinks and other goods and services to the festival. There are limits to supply at festivals one of the main issues is upfront and overall costs of producing and creating the festival, these are factors such as the construction of the stages, lighting, speakers and lavatories.
In order to fund the upfront costs of the festival, Parklife will rely heavily on sponsorships with major brands such as Strongbow and Desperados which they have used in the past. The sponsorship fees usually allow the sponsors to pay a premium to have either a stand, bar or DJ booth at the festival. When sponsoring Parklife, there are various partnership package opportunities that a business can choose to pay for from Headline Partner to Experiential Activity. Sponsorships have a high cost and this is due to the event being marketed through and extensive PR and Marketing campaign in which partners are able to reach an expected sell-out audience of 70,000-80,000 people a day whilst the festival is being held. A big proportion of this audience is made up of millennials, making an association with a festival a golden opportunity for brands to target young consumers they sometimes struggle to speak to. (Thomas Hobbs, 22 Sept 2017)
The second major cost is artist fees which have increased due to the overall decline in record sales due to streaming networks like Spotify, Apple Music and Pandora because of this artist's appearance fees are at their highest. A minor cost for festivals are the employment as there is an increase in volunteering due to many economic agents wanting to enjoy the event for free or at a discounted cost. These fee's should be paid for through the upfront revenue of partnered sponsorships and the continued revenue of the ticket sales and the final revenue generated during the festival from food, drink and merchandising.
The ticket sales of Parklife are price inelastic with a price elastic of supply score of 0.4, this means that supply is relatively unresponsive to a change in demand, therefore price can increase without quantity having to increase massively. This figure was calculated by the percentage change in Parklife tickets supplied over the last five years divided by the change in price of Parklife over the last five years. The inelastic supply of Parklife can be illustrated through a diagram, shown to the right. P1, Q1 is the original equilibrium within the economy but as price increases massively due to the increase in demand compared to the increase in quantity that is able to be supplied is smaller. The demand curve shifts outwards and mainly upwards leading to a new equilibrium at P2,Q2. Since Parklife at this moment is price inelastic, this is very beneficial to them as a company due to them being able to continue to increase the price whilst only increasing supply of tickets, consumers will still choose to buy them leading to revenue being generated each year through ticket sales that after costs can be made into profits. An example of Parklife being able to use this to their advantage in order to generate the highest amount of revenue is the ticket sales scheme in place. Parklife just after the previous festival open up ticket sales for a very short time under the title ‘early bird ticket' this ticket is usually the lowest costing ticket of the event, they are then able to increase ticket prices by holding various ticket sale events such as first release as this sells out they increase the price and call it 2nd release, etc.
How have music festivals affected employment?
Overall in the UK music festivals have led to an increase in the employment rate this is due to creating sustainable jobs within the economy due to the various sectors of the industry needed in order to put on a music festival. In 2016 47,445 full time jobs were sustained by music tourism this includes employees involved with live concerts and music festivals. (UK Music, 2017)
Jobs are first created in the research and development stage of creating the ideas and plans for the festivals, this would include job roles within creative and financial departments as it would be there goal to see if the festival would work and financially prosperous.
The next stage is to secure financial security and begin to plan the festival and its line-up and advertise, this would include workers from roles in accounting, banking, marketing and management meeting with investors as well as creatives and office workers to figure out the steps needed to put on the festival and secure a line-up. Once the festival is planned and the company is close to the show dates, the construction and management of the festival will take place, this will include hiring various sub-contractors to fill roles such as building the stages and setting up the lights and sound, wastage, security including organizing police and medical units for patron safety and vendors which will sell food, drink and merchandise.
Other jobs which are created is when the festival occurs such as transport for attendees to and from the festival such as shuttles and taxis, hospitality staff in nearby accommodation where visitors of the festival may stay. The final jobs created are after the festival has ended such as wastage clean up, deconstructing the site and media promoting what happened at the event.
Various part time and full time job roles created before, during and after the event have affected the rate of employment by increasing it. The amount of sustained job roles increased between 2011 and 2016, this was displayed in a report from UK Music 2017.
Parklife is able to not only affect employment within their own company but create employment and work for other businesses. For example, Ground Control is a business which Parklife hires in order to organise the logistics and installation of the Parklife Festival site which includes everything from perimeter barriers to the big-top tents and the bar and sponsorship stands. Parklife has also shown that they are able to increase employment over the last five years as they have expanded and grown, therefore leading to an increase in staff in all sectors of the festival production. They also affect employment for outside businesses such as sponsors, this is due to if the business is for example able to have the opportunity to have an area at Parklife, employees will be needed to run that area as well as organise everything that will need to happen for that event up to the day of Parklife. Music festivals like Parklife also affect the volunteer area of employment, this is due to the festival willing to offer a free ticket to the festival for anyone who would be willing to donate their time working a shift for the festival. The volunteering also trickles down through other businesses that are associated with music festivals such as Oxfam. Oxfam the charity make themselves available at festivals by selling clothes and the workers within their areas are volunteers which are enticed with the idea of free tickets. Oxfam offer volunteering opportunities at various festivals across the summer.
The employment that Parklife is able to create has a trickle-down effect that reaches companies involved with the event, volunteering abilities but the local community will be at their busiest period so this would lead to various businesses from hotels to restaurants bringing in extra employees to continue giving a high quality service with the influx of population. In conclusion Parklife has a positive impact on the employment of themselves, the businesses they involve themselves with and Greater Manchester by increasing the employment rate.
What is the effect of music festivals on the environment and the knock on effects of the economy?
Music festivals attract millions of people to various untouched empty parks and sites which have been transformed into another world to last a weekend but are then left destroyed and covered in waste to be resolved by volunteers, wastage companies and other groups to clean up the horrific mess.
Due to wastage firms being hired at the end of festivals this effects employment within the economy. But with negative externalities such as air pollution and noise pollution this has social costs on third parties.
Air pollution is the main negative externality created due to music festivals, firstly due to the high consumption of fuel from traffic congestion of attendees travelling to and from the festivals usually across country for long distances and the movement of equipment and facilities that will be used at the festival, this is also a factor due to the transportation of international and national artists around the country on flights using jet fuel. The fuel used to transport the rubbish from the festival to wastage and recycling plants, but the emissions from the electricity used at these sites sorting out the waste. Another cause of pollution is the carbon dioxide emissions due to behaviour such as the burning of tents and bonfires. The estimated total UK festival industry emissions (excluding travel) is 19,778 tonnes of CO2 per year (Powerful Thinking, 2015). This is mainly due to the extreme increase in population leading to large increases in use of water and electricity supplies.
Noise pollution is the next negative externality which will affect third parties of the festival. Parklife is held at Heaton Park, surrounding the park is a local community. During the festival for at least 12 hours a day, the economic agents living close to the festival will have to listen to the loud music which could affect the daily lives as it could be a distraction and if they are a young family this could cause a struggle if there is a young child living in the household.
At festivals is a popular place for attendees to smoke whether they do or not as it is a common action. This increase in smoking causes the negative externality of toxic ‘passive smoking' on the non-smokers which are attending the festival or the employees and volunteers which are working at the festival.
Since music festivals have noticed the actions of attendees and their wastage, initiatives are being created within festivals to increase recycling and reusing waste and belongings that are left behind such as at Parklife Festival there is a practice of bringing various bags filled with different organized rubbish for the chance of winning festival tickets to the following years event. This is incentivizing attendees to act better leading to positive externalities such as by reducing the amount of waste left and less power will be used to remove the rubbish leading to a decrease in electricity usage. Another idea used by festival organisers is to reduce the amount of plastic waste by removing sachets, plastic straws and polystyrene cups or trays. We can see that this is an important goal for Parklife as they have promoted this idea over various social media platforms in order to engage with attendees to make an environmental change at their festival. The overall impact that Parklife has on the environment of Greater Manchester will be minimal as it only occurs mainly for a 2-day weekend, but Greater Manchester now has the worst traffic congestion of anywhere in England outside London. (NIC, 2018). The impact of the constant pollution from fuel from cars, buses and trains within Manchester will have a major environmental impact throughout the year than the 2-day festival which Sacha Lord has created each year.
What is the effect of music festivals on the local community; Parklife and Greater Manchester?
Music festivals have many effects on their local community through the environment but also local businesses. Parklife brings in over £9 million to the Greater Manchester economy. This happens more with metropolitan festivals such as Parklife due to the lack of camping aspect, so not only are people travelling the country to attend the festival but they will flock in to various accommodations such as hotels and hostels an example of this is that £6million is spent by the audience on these types of businesses within the city from restaurants, clothing and food stores, intercity transport and nightlife venues. During the Parklife weekend in the beginning of summer every hotel surrounding Heaton Park increases their prices and is fully booked. This shows an increase in revenue generated for each of these businesses within and surrounding the city. Hotels increase their prices from around £52 in December to around £189 in June during the Parklife weekend, this is a price increase of 263% (Premier Inn, 2018). This demonstrates how hotels in the local community are able to increase their revenue over this singular weekend. Another factor which shows an impact on the local community is that Parklife finishes at Heaton Park at 11pm, Parklife hosts various after parties in inner city venues such as The Ritz, Gorilla, South and Soup Kitchen. During this weekend the possible 80,000 consumers that could enter these venues and buy a drink at a high price of £3.50 could lead to an £280,000 in combined revenue before costs and taxes. This is most likely the highest revenue they are able to generate in a singular weekend throughout the year. This revenue can be reinvested in the venue and local area, to keep them at a higher quality in order to continue keeping Parklife holding their afterparties at venues like these. And another £3 million is spent directly by the festival on local staff, suppliers, sub-contractors and artists.
In a conversation with Festival Insights, Sacha Lord and John Drape, managing director or ground control, discussed the community impact that Parklife has. You can't run a show the size of Parklife without community impact. The introduction of the Taskforce was a step change, and is something that is constantly evolving and improving (John Drape, 2017). In 2017 Parklife also opened the Parklife Community Fund for local applicants and causes. This fund is ran by the festival in cooperation with Manchester and Bury councils, it has made £44,000 available this year for the benefit of community groups with priority being given to groups and project that will utilise the parks (Manchester Community Central, 2017). One month after the eighth edition of Parklife in 2017, the organisers were proud to announce that they raised a total of £75,164.50 for charity this year, £26,023 was via donations from festival goers and bar staff (Manchester's Finest, 2017). These charitable contributions to Parklife organised charities with donations from attendees and staff, show that the popularity of Parklife and huge influx of population once a year is able to positively effect and impact the local community of Greater Manchester with various amounts of donations being used to benefit town councils to improve the local areas.
What are music festivals effect on standard of living?
Standard of living can be defined by economic welfare derived from quality of life but also derived from the purchasing of merit and demerit goods. There are various factors of events which happen at music festivals which could overall increase or decrease a person's standard of living. Experiences rather than goods have been proven to make us happier. A study conducted by technology company, Harris, in conjunction with Eventbrite in 2014 found that over 3 in 4 millennials would choose to spend money on a desirable experience over a desirable purchase, with 72% of millennials stating they wished to increase their proportion of spending on experiences compared to physical things in the following year (Soloman Zhang, 2016).
Music festivals are described as once in a lifetime unique experiences and by attending one and it being an interesting time which could open your mind to new experiences and ideas would increase your standard of living, this is due to it supposedly increasing your quality of life.
Music festivals have a reputation of excessive drinking all day and night as well as opportunities for attendees to use, misuse and abuse legal and illegal narcotics. As hard as security and police try to stop them from getting through the gates but a small amount always somehow gets through, the use of drugs and excessive drinking can decrease standard of life due to the negative health effects that can arise from them. A decrease in health can lead to an increase in time spent at medical clinics which puts a strain on the healthcare system which can lead to an increase in government spending therefore decreasing money spent elsewhere on other services by the government but this would increase employment in that industry if other economic factors remained the same. Parklife festival has a no tolerance on drugs but have set up a provision for testing prior to taking. This recognises the fact that whilst they do everything they can to prevent drug access they realise they cannot eradicate it so they have teamed up with the Loop to provide a safety net for those who are going to take them. This also includes there constant safety warnings of illegal drugs that enter the festival and how to stay safe whilst making the decision to take them on their social media platforms like Twitter and Instagram. Music festivals also have a reputation of increased crime levels such as assault, sexual harassment, robbery and drug related crime. In 2018, 28 arrests were made at Parklife on the first day (Manchester Evening News, 2018), the majority of this figure were for drug-related offences. Compared to various criminal activity at music festivals around the country, Parklife had lower figures while Glastonbury had 230 thefts from tents reported and 22 incidents of pickpocketing, the total value of the thefts was £98,473 (The Telegraph). The increase in crime creates a feeling of insecurity and a worry over goods during the time spent at the festival which can decrease the quality of life factor but since Parklife doesn't have a camping aspect the situation of goods being stolen from tents is not possible therefore removing a major part of crime within festival culture. From my first-hand knowledge of attending various music festivals at many of the festivals the vendors usually will sell food or merchandise that you wouldn't get back at home which can be exciting such as sushi wraps with innovative and creative fillings. There are many stalls which will sell groovy vintage clothing such as shell jackets from commercial brands which are popular like Nike and Adidas, when you buy the item like a jacket and you wear it the whole festival and when the festival is finished but its worn and when its worn it reminds you of the times that was had at the festival. This can increase standard of living as it will make you happy and this has been derived from the purchasing of a merit good, the jacket. Overall I believe Parklife has a positive effect on standard of living of its attendees as it works closely with police and medical workers to minimise health risks and criminal activity, therefore attendees are able to mainly focus on enjoying the music, whatever they choose to consume and spending time with close family and friends for the 2-day event.
In conclusion how has Parklife affected the local economy of Greater Manchester?
Parklife is an iconic festival which causes an influx of population in the northern England capital. This huge growth of consumers is due to the high demand of being able to attend the 2 day event. This is shown by the sell-out of Parklife tickets each year and how they have increased their attendance by 30,000 over the recent years. This has led to an infinite demand of retail and hospitality from the city during the event, as attendees from across the event have a need for accommodation and other services. There is a large amount of consumption within and outside of the festival due to the purchases of goods and services from stalls to restaurants. Therefore this has an impact on employment throughout the city as these local businesses are likely to hire more staff to deal with the busy period, the increased income to the workers leads to an increase in consumption as they should have an increased disposable income which they will spend in the city that will trickle down through businesses. Parklife has both positive and negative effects on the environment, this is due to the main negative externality of pollution within and surrounding the festival from causes such as traffic congestion because of the amount of people travelling to Manchester to attend the event but overall this is small compared to the overall congestion of Manchester as it is now the most congested city in the country after London. Due to the environmental impacts of Parklife on Manchester, Parklife founded the Parklife Community Fund, the donations from this have allowed the local communities to improve the areas which would improve their local economies by investing in local businesses and the households of the areas. Parklife is able to improve standard of living within Manchester but also of the attendees of the main event. Parklife is able to give attendees a unique experience which will improve their overall happiness from buying goods and services in the event, whilst taking safety measures that allow people to try various substances from alcohol to narcotics in order to add to the overall experience. They continue to improve the standard of living by working with police to stop the chance of crime being an occurrence. In conclusion, Parklife in my opinion has a positive impact on the local economy of Greater Manchester. It is able to benefit the businesses and employees that involve themselves with the festival as well as the attendees they pay to be a part of the experience. Parklife has been able to give Manchester a wider audience and appeal from people across the world, this increase of population once a year allows businesses to increase their revenue that can be converted into tax that can overall improve the local community with the help of the foundations that Parklife has been able to create. I imagine that in the future as Parklife continues to build and improve it should also continue to benefit the local economy of Greater Manchester in areas from consumption as well as the standard of living of residents and visitors, to the environment.
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