Led By A-B, Coachella, Desert Trip, SXSW, Music Sponsorship Spend To Hit $1.47B
Thursday, September 15, 2016 at 05:01PM
NYSportsJournalism.com in Anheuser-Busch, Coachella, Desert Trip, Finances, Lollapalooza, Music sponsorship

By Barry Janoff

September 15, 2016: With performers such as the Rolling Stones, Adele, Beyoncé, Kanye West, Bruce Springsteen, Guns 'n' Roses and AC/DC on the road, and festivals including Desert Trip, Coachella and Lollapalooza in full swing, it is little surprise that the music industry is hitting some high notes in ticket sales and sponsorship deals.

But numbers from industry analysts show that the score may be even better than anticipated.

The projected spend on sponsorship in the music category for 2016 is $1.47 billion, not only up 5.6% from $1.4 billion in 2015 but also "exceeding projected rise in sponsorship spend in sports (5%) and every other property segment," including the projected 4.5% increase in overall sponsorship spending, according to research and consulting firm IEG, Chicago.

The 2016 projection is also up from the $1.34 billion spend in 2014, $1.2 billion in 2013, $1.22 billion in 2012 and $1.17 billion in 2011.

Anheuser-Busch InBev is "the undisputed leader in the live music space demonstrated by its near ubiquity at music festivals and an expanded presence in country music," according to the IEG Music Sponsorship Report.

According to IEG, 28% of properties with a sponsorship in the alcoholic beverage category report a partnership with Anheuser-Busch, with its Bud Light brand as a leading driver.

Among other activations, Anheuser-Busch took over sponsorship of South by Southwest this past year from Miller Coors, which had the spot for the 15 prior years. The two-year deal "puts Bud Light at the forefront of the most anticipated annual event where original music, independent film and emerging technologies converge," according to the beer company.

The Top Five most-active companies in music sponsorship also include PepsiCo (20%), Diageo (19%), Coca-Cola (19%) and Brown Forman (15%), the Louisiville, Ky.-based spirits and wine company whose brands include Jack Daniel's, Old Forester, Finlandia, Southern Comfort and Korbel.

Diageo, behind its Captain Morgan and Smirnoff brands, showed the biggest jump in sponsorship deals, moving up from seventh most-active (9%) in 2015, per IEG..

The category's most-active brands also include Heineken (14%), Miller Coors (11%), Red Bull (9%), Tito's Vodka from Fifth Generation (8%), Uber (8%), Monster (7%) and Nestle (7%).

AT&T and Ford fell out of the Top Ten, per IEG.

The most active categories are topped by wine and spirits, with brands "7.4 times more likely to sponsor music than the average of all sponsors," according to the Music Sponsorship Report.

The Top Ten most active categories also include beer (6.2 times more likely to sponsor music than the average of all sponsors), non-alcoholic beverage (6.2), media-publishing (5.4), food (3.1), retail (2.8), hotels and resorts (2.4), automotive (2.3), banks (2.2) and telecom (2 times more likely to sponsor music than the average of all sponsors).

According to Pollstar, which tracks concert revenue and ticket sales, the Top 100 Tours during the first half of this year (January-June) hit a record $1.48 billion in combined grosses. That is up $45 million (3.1%) over last year’s record pace.

The top grossing worldwide tours of 2016 through June were topped by Bruce Springsteen & the E Street Band River Tour with $17.7 million gross (1.5 million tickets sold), Beyoncé The Formation with $137.3 million gross (1.1 million tickets), Coldplay with  $137.3 million gross (1.58 million tickets), Madonna at $85.5 million gross and the Rolling Stones with $83.9 million gross.

The Stones are scheduled to be part of the upcoming Desert Trip six-day, two-weekend festival in Indio, Calif. (Oct. 7-8-9, Oct. 14-15-16).

When tickets for the event went on sale in May, some 70,000 per day were sold in five hours, according to promoter AEG Live.

According to online ticket marketplace StubHub, that would set a record for music festivals with more than $150 million in gross revenue, $60 million more than the current record of $84 million from the 2015 Coachella Festival.

Iconic performers also scheduled to include The Who, Paul McCartney, Neil Young, Bob Dylan and Pink Floyd's Roger Walters.

Marketing partners for Desert Trip include Absolut, Coors Light, Corona Extra, Sierra Nevada and Heineken.

Among other major events in 2016, Coachella, held in April at the same Empire Polo Club in Indio, Calif. as Desert Trip, has such sponsors as Abslout, American Express, Heineken, H&M, New Era, JBL Harman, T-Mobile and Tag Heuer.

Sponsors for Lollapalooza, staged in August in Chicago, include Samsung, Bud Light, Pepsi, BMI, Toyota, State Farm, Jack Daniel's, Bacardi, Uber and Citi.

Bonnaroo, held in June in Manchester, Tenn., lists sponsors including Miller Lite, State Farm, 7 UP, Intel, Bose, Angry Orchard and Tito's Vodka.

In addition to Bud Light, top tier sponsors for South by Southwest (March 10-19, 2017 in Austin) include Mazda, Monster Energy and Esurance.

The Austin City Limits Music Festival (Sept. 30-Oct. 2, Oct. 7-9) includes sponsors Samsung, Honda, Miller Lite, Lowe's, State Farm and locally based Tito's Vodka.

Sponsors for the iHeartRadio Music Festival in T-Mobile Arena in Las Vegas (Sept. 23-24) include MasterCard, Mazda, Mondelez, State Farm and Taco Bell.

Music sponsorship often extends into sports. One prime example: The NCAA March Madness Music Festival, part of the Men's Div. I Final Four scheduled for April 1 & 3 2017, in University of Phoenix Stadium, is sponsored by Coca-Cola, Capital One and AT&T, all corporate NCAA partners.

The Stones, Who, McCartney Show Adele, Beyoncé How To Sell Tickets

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