Attending a multi-day music festival has become almost a rite of passage for the Millennial generation. There are currently more than 800 music festivals in the U.S. alone. Aggressive pricing, a huge lineup of top performers, diversity in music genres, social media buzz and an abundance of cheap rentals on sites like airbnb are all contributing to the huge swell in festivals.

In 2014, a staggering 32 million people attended at least one music festival according to Nielsen Music. Half of them (14.7 million) were Millennials, the most sought-after target demographic for sponsors (which explains the big-budget sponsorships at festivals). Nielsen Music also reported that the average festival attendee traveled 903 miles to attend a festival. Even if you consider that many fans fly to festivals, that’s a huge distance to travel for live music.

Major festivals like Coachella and Lollapalooza regularly sell out within hours of launching ticket sales. Last year, three-day passes to Lollapalooza sold out within one hour! But it’s not just the fans that love these events. Increasingly, musicians are choosing the festival circuit over touring on their own. Even popular bands like Modest Mouse and the Arctic Monkeys play at multiple festivals a year and claim to love it. 

After a decade of consistent growth in the music festival business, many cities are more than happy to host one. The local economies of the host cities benefit greatly as they are infused with millions of dollars in additional tourism-related revenue. Fans come for the music and the unique experience, and sponsors and advertisers love that they have a truly captive audience, not just for a few minutes but for multiple days. Which is why so many brands are willing to pay megabucks to sponsor them in multiple ways. 

Here are the top 6 reasons that music festivals are growing exponentially:

1. There’s Big Money in the Music Festival Business

While this may sound obvious, the numbers are truly staggering. Multi-day music festivals in North America have gone from a handful to hundreds. As music festivals have gone mainstream, they’re reporting hundreds of millions of dollars in ticket sales and sponsorship revenue. The five biggest festivals combined grossed more than $183 million in ticket sales in 2014 not including sponsorships or merchandise, food and alcohol sales. Coachella grossed a record-breaking $78 million over just two weekends in 2014. Austin City Limits (ACL) made $38 million, Lollapalooza made $29 million, the Outside Lands Festival in San Francisco grossed $19 million and the Electric Daisy Carnival Festival in New Jersey made $7.2 million. More recently, the Stagecoach Country Festival in Southern California reported $18.5 million in revenue earlier this year.

2. Millennials Are Driving Attendance At Music Festivals:

The rise of the collaborative economy has established that Millennials value experiences much more than owning things, and that they care deeply about sharable, personalized experiences. Music festivals are a perfect example of everything they love. Friends, music, alcohol, unique and curated experiences, a community of fans, a break from their hectic lives in the city, highly-sharable moments and contributing to lesser-known musicians and local economies. Plus, festivals have totally redefined how we experience music. Fans can sample hundreds of bands and artists in a few days, giving them a chance to truly explore new artists and genres.

While some experts predict that the growth of festivals may have reached saturation point, event organizers and band managers believe that there’s actually room for even more growth, and that the festival industry is just starting to come into its own. There are definitely examples of festivals that have failed, like Bamboozle in New Jersey and Kanrocksas in Kansas City, but these are considered exceptions. 

3. Bands Make More Money From Festivals Than Tours:

Many less-known bands are making more money playing festivals than clubs and small venues. For these bands, being discovered and loved by the audience at a festival — and the resulting social media buzz — can take their success to the next level. In today's festival-crazed world, many artists credit festivals for helping them find new fans, create more awareness of their music and even sign record deals.

A 2014 Rolling Stone article on the economics of music festivals stated that American hip-hop duo OutKast made $60 million from playing 40 music festivals that year. But it’s not just about the money. A lot of musicians like playing at open, pastoral venues and parks and often have deeper connections with host cities. Also, an event’s reputation, and endorsements from other musicians help bands choose the festivals they play at.

Some festivals insist that bands sign a "radius clause," which prevents them from performing within a specific geographic radius (e.g. 100 miles) and time range (e.g. 3-6 months before and after the festival dates). Though this restriction can complicate the booking process and tour dates for bands, many of them are still willing to sign the “radius clause.” 

4. Music Festivals Are a Great Bargain for Many Fans:

At most of the top festivals, a 3-day pass costs anywhere from $185 - $450 which includes access to hundreds of concerts and multiple event stages. Considering what it costs to just see one popular artist live in cities like New York and Chicago, these 3-day passes are bargain for many fans. The sheer number and calibre of performances one can experience at festivals helps fans justify the cost of not just the tickets, but also travel, food and lodging. Plus, this way they only need to go to one major festival a year instead of multiple smaller events. 

5. Social Media Buzz Attracts More Visitors:

During music festivals, fans flood their social media feeds with photos, videos and posts highlighting festival fashion, top performances and more. In just the first weekend of Coachella 2015, fans posted more than 3.5 million tweets. More than 1 millions tweets were sent during SXSW 2015. A 2014 Eventbrite study found that 75% of the social conversations about music festivals are created by fans in the 17-34 age group. The study also found that 23% of these posts were made by fans who weren't even at the events but were watching remotely via live streams on YouTube, TV etc.

Festivals have bigger audiences which means more publicity and social media buzz, with thousands of fans constantly posting selfies, photos and videos of bands on Instagram, Facebook, SnapChats and other popular sites. Fans willingly share information highlighting how much fun they’re having for friends and family back home to see, and the online buzz helps drive up ticket sales. There are of course obnoxious side-effects of living in a connected world: people constantly blocking your view of the stage with their cellphones, a common sight at most festivals.

The U.S. festivals that created the most social buzz in 2014 were Electric Daisy Carnival and Coachella, both West Coast events. The content from both events combined was shared more than 700,000 times and it’s hard to tell how many millions of people saw it.  

But the social media conversation about festivals isn’t just during the events. It starts months ahead when organizers announce their lineup, ticket sale dates, contests, discounts, transportation and weather info etc. All this social buzz really helps inspire others to also buy tickets and attend these festivals, and it doesn’t cost the organizers anything. 

Infographic credit: ShareThis and PartyBody

6. Sponsors are Paying Millions to Brand Festivals

Today, the popular festivals are able to sell out just hours after they start selling tickets. Sponsors and advertisers are willing to spend millions of dollars to target what they know is a truly captive audience, for a whole weekend. Music festival sponsorship spending has been growing exponentially over the last couple of years.  According to IEG, LLC, North American-based companies spent more than $1.5 billion sponsoring music venues, festivals and tours in 2014, a 4.4% increase from 2013. The biggest sponsor, beer-manufacturer Anheuser-Busch, is partnered with 31% of U.S. music festivals followed by Pepsico, Coca-Cola, Heineken and Red Bull.

Infographic credit: IEG, LLC

Here a pretty great infographic that covers the music festival landscape and a beautiful infographic from Billboard that captures some surprising statistics about U.S. music festivals. What’s clear is that music festivals have hit mainstream and are here to stay for the next few years atleast. Which festivals survive and which ones don’t will depend heavily on whether they can create unique experiences and snag the best artists to differentiate themselves from their competitors. On the flip side, the recent TomorrowWorld fiasco has plenty of lessons for music festival organizers about what not to do.