The Australian festival sector has been through hell. COVID wiped out two full seasons. The recovery was complicated by supply chain issues, insurance market disruptions, and artist routing challenges. Just when things were getting back to normal, the cost-of-living crisis hit — squeezing both the audiences who buy tickets and the businesses that produce the events.

Several major festivals have either cancelled, downscaled, or significantly restructured in the past two years. Others are thriving. The question is: what separates the survivors from the casualties, and what does the festival landscape look like going forward?

The Current State

Let me paint the picture as honestly as I can.

Ticket sales across the festival sector are down approximately 10-15% from pre-COVID levels, according to industry sources. That doesn’t sound catastrophic, but festivals operate on thin margins, and a 10-15% revenue drop can be the difference between profit and loss.

The decline isn’t evenly distributed. Premium festivals with strong brands (Splendour, Laneway, Bluesfest) are holding steady or growing. Mid-tier festivals — those in the 5,000-15,000 capacity range with less brand recognition — are struggling most. Several have cancelled 2026 editions or moved to biennial schedules.

Regional festivals face particular challenges. The cost of transporting production equipment and artists to non-capital-city locations has increased substantially. Audience catchment areas are smaller. Regional accommodation infrastructure can’t always handle the demand.

Why Cost-of-Living Matters More Than COVID

COVID was a shock, but it was temporary. The government provided support programs, the industry pivoted to online events, and when restrictions lifted, pent-up demand drove a strong recovery.

The cost-of-living crisis is different. It’s a sustained, ongoing pressure that changes consumer behaviour gradually rather than suddenly. People don’t stop going to festivals overnight — they go to one fewer festival per year, they choose the cheaper option, they skip the VIP upgrade, they bring food instead of buying it on-site.

For a festival charging $250-350 for a general admission ticket, the audience calculation has changed. A family that went to two festivals in 2023 might go to one in 2026. A group of friends that would have done Splendour and Laneway now chooses one or the other.

This compression of demand intensifies competition between festivals. The winners are those with the strongest brands, the best lineups, and the most compelling value proposition. Everyone else loses share.

What’s Working

Strong brand identity. Festivals with clear, distinctive identities are performing best. Meredith’s cult following, Dark Mofo’s artistic ambition, and Bluesfest’s genre focus give them audiences that are loyal regardless of lineup specifics.

Flexible formats. Some festivals are experimenting with single-day formats, reducing the commitment from a multi-day camping experience to a more affordable day trip. Laneway’s single-day format has insulated it from some of the cost-of-living pressure.

Diversified revenue. Festivals that rely entirely on ticket sales are most vulnerable. Those with strong food and drink operations, sponsorship revenue, and merchandise income have more financial resilience.

Local and regional focus. Smaller, community-focused festivals with lower overheads and strong local support are often more financially stable than mid-sized festivals trying to compete nationally.

What’s Not Working

Arms race lineups. The cost of headliners keeps increasing, and mid-tier festivals can’t compete with the booking budgets of the major events. Trying to compete on lineup alone is a losing strategy for smaller festivals.

Over-expansion. Several festivals expanded their capacity or added second weekends during the post-COVID recovery period. In retrospect, that expansion was premature, and some are now stuck with infrastructure commitments they can’t fill.

Ignoring the experience. Audiences have more entertainment options than ever. A festival that’s just a music lineup in a field isn’t enough anymore. The experience — food, art, community, comfort — matters as much as the music.

Where It Goes From Here

I expect the next two to three years will see continued consolidation. Some mid-tier festivals will close permanently. Others will merge or be acquired by larger operators. The major festivals will continue to grow cautiously.

The festivals that survive and thrive will share common characteristics: strong brand identity, diversified revenue, excellent operational execution, and a genuine understanding of what their specific audience wants.

There’s also room for new formats. Micro-festivals (under 2,000 capacity), genre-specific events, and hybrid music-and-arts festivals can fill niches that large commercial festivals don’t serve.

Technology will play a role too. Data-driven ticket pricing, AI-optimised logistics, and enhanced digital experiences (live streaming for non-attendees, app-based personalisation) are all areas where innovation can improve both the business model and the audience experience. AI consultants in Brisbane are working with event companies on some of these applications, and the early results are promising.

The Optimistic View

Despite the challenges, I’m cautiously optimistic about Australian music festivals.

The fundamental demand is there. Australians love live music, love outdoor events, and love the communal experience that festivals provide. The cost-of-living crunch will ease eventually. The festivals that survive this period will be leaner, smarter, and more resilient.

And the music — the actual reason festivals exist — is extraordinary. Australian artists are making some of the best music in the world right now. As long as that’s true, there’ll be festivals to showcase it.

The next few years will be tough for some. But the ones that emerge will be stronger for it.