BusinessTN

A Lesson from Woodstock

In 1999, the world watched on pay-per-view as America’s reanimated model of music utopia erupted in bonfires, violence and some fairly mediocre noise rock. Woodstock ’99 was also unprofitable. Mired in greed and nostalgia, it paled in comparison to the 1969 original.

The riots almost soured the country on rock festivals altogether. But three years later, something unexpected happened in an unlikely, albeit wholly appropriate, place. In 2002, Ashley Capps and Superfly Productions staged a low-buzz fête on Sam McAlister’s farm in Middle Tennessee. Focusing more on the people and less on profit, the show was a smash. Five years later, Bonnaroo has yet to disappoint music fans or business leaders.

Already a resounding media darling, any local sniping about unrealized tax revenues to be made from Bonnaroo was squelched when Middle Tennessee State University published a study following the 2005 festival showing benefits to Coffee County exceeded expectations.

According to the study, direct spending topped $10.5 million, business revenues $14 million, personal income more than $4.3 million and the fiscal impact of contributions to local government revenues exceeded $400,000. Sales tax revenues for the county grew larger than the rest of the state. State tax revenues were up more than 50% compared to before Bonnaroo came to town; local revenues were up more than 40%. The largest visitor spending outside festival gates—$8.5 million—was spent in Coffee County, mostly on gas and groceries. And revenues have grown every year since Bonnaroo began.

“Local attitudes have always been really positive,” Capps, now a major Coffee County landowner, says from his Knoxville office. “We wouldn’t be going into year six if they hadn’t been as a whole tremendously supportive.”

But just in case there was any thought that Capps was only in it for a short buck, in January he bought the 530.57-acre farm for $8,686,482, effectively making Bonnaroo a permanent fixture. Regarding the price tag, Capps quips: “We created the market value, and we paid that price.” The magnitude of the investment is not lost on Coffee County Mayor David Pennington. “It shows a full commitment to the community when they spend $8.6 million on a piece of property. We’ve had industry that wouldn’t spend that much at one time.

A Neighbor in Deed

The sheer magnitude sounds like hyperbole: a community of less than 50,000 swelling with the influx of almost 100,000 visitors, clogging roadways, stores and gas stations. And almost as quickly as the teeming, sun-pinked hordes of twentysomethings show up, they’re gone, as is Bonnaroo. Until now.

“By becoming a landowner,” Capps explains, “we’ve become a legitimate member of the business community.” (One imagines the $3 from every $200 ticket that goes directly to the county fund also helps.)

Bonnaroo organizers bought 530 acres and signed long-term leases for 240 more. Deed in hand, they’re able to do more than dream about potential. Working near the bucolic hamlet that’s Manchester, Tenn., has always come with a price: amenities. Though it was too late to change that for this year’s Bonnaroo, staged June 14-17, festival-goers next year will begin to see the start of permanent infrastructure, facilities, electricity and water, or what Capps simply calls “the basics.

It’s a tall order, and you can’t do it all at once,” he explains. “But the real boon is the other potential uses for this land. It’s an extraordinary piece of property. We’re talking to people about other shows: sporting events, truck shows, other music events, even.

A Legacy Refreshed

Expanding land use should go a long way in assuaging residual resentment from those in the pious pockets of the county who shudder to imagine the recreational drug use and laissez-faire libidos that run rampant across their Tennessee farmland for four days. One good Franklin Graham convention would make a world of difference.

But Bonnaroo’s biggest impact comes not in over-performing revenue streams or brilliant music bills; it comes in legacy—specifically as regards Tennessee’s aging music legacy. The festival is pulling the state’s musical heritage into the modern era. Teens thousands of miles away now have another word to associate with Tennessee: Elvis, country music, the blues and Bonnaroo.

“There is obviously a huge economic impact on the state, but beyond that, the intangibles are much more valuable to building our brand,” explains Susan Whitaker, commissioner of the Tennessee Department of Tourist Development. “Bonnaroo has broadened our musical heritage.” “Having something like this in Nowhere, Tennessee, it was kind of a shock when we found out it was coming,” remembers Nashville resident David Molteni. The 23-year-old computer technician is part of the largest contingent of ticket sales, those sold to Tennessee residents. But that contingent is still only 10% of all sales. This year, music fans are coming from all 50 states and two dozen countries.

“Every year, I sit next to people who drive here from all around the country,” Molteni adds. “They’re jealous. They want to know what the hell this festival is doing in the middle of Tennessee.”

“One of the great strengths of Bonnaroo is being able to tap into Tennessee’s very rich legacy,” Capps says. “I love that Bonnaroo continues that tradition.

Hence Capps eagerly plugs in heritage acts like Charlie Louvin. “We’re always tapping into Tennessee tradition, and I’d like to do more of it,” he says. “We need Booker T. & the MGs.

Ahead of the Cyber Curve

The brilliance behind Bonnaroo was evident before the miles of clogged arteries into the heart of Coffee County appeared on international news. For the festival’s first year, organizers pre-sold some 70,000 tickets without spending a buck on advertising.

“From the beginning, we tapped the network the Internet helped foster, which was a network of music fans all over the world. We wanted to reward those fans, so we offered them cheaper tickets early, before selling to the general public. It was successful beyond our wildest dreams,” Capps says. “We ended up spending nothing on traditional advertising the first two years, but as it evolved with bands becoming more mainstream like Neil Young or [2007 headliner] the Police, we wanted to expand awareness of the festival and started some traditional marketing, mostly in the Southeast to reach beyond the hardcore fan.

Bonnaroo’s brand and cyber profile are so strong and its e-mail catalog so deep that the full-page ads in major media markets on the coasts are more about keeping up with the market buzz around the Coachellas and Lollapaloozas than selling tickets. The vision is to grow Bonnaroo into the country’s premier outdoor fête. “In recent years, we’ve started creating a marketing budget, but when we spend money on marketing, it’s not because we necessarily have to,” he says.

That’s obvious.

Rolling Stone all but hails Bonnaroo as better than the original Woodstock. And for the third time in its five years, Bonnaroo won Billboard’s top honor Touring Award, based on box-office figures.

Hard Act to Follow

Where Bonnaroo goes from here is critical. Capps and Superfly set the bar high, and risks will increase in step with the music talent, but Capps asserts the only question organizers concern themselves with is, “How do we create the coolest festival we can?”

That can only get harder to answer.

“Every year, everyone says, ‘Well, this is the last year it’s going to be good,’” Molteni laments. “People can’t believe it’s still as good as it is. It went from this quirky hippie festival to something really embraced by mainstream fans. My girlfriend’s step-dad even came two years ago.

“Man, that guy lives in Bellevue!”