It’s about music, not big money
Oppikoppi ‘barely covers costs’
THE small mining town of Northam in Limpopo has turned into a magnet for hipsters. For “the love of music”, revellers have been flocking to Oppikoppi, South Africa’s answer to Woodstock, for two decades.
Quite why Oppikoppi remains the standard-bearer when, every year, new music festivals are being launched, is intriguing.
There are about 40 annual music festivals in South Africa, including Splashy Fen, the 60s Party, the Mapungubwe Arts and Cultural Festival, Aardklop Nasionale Kunstefees and the Cape Town Jazz Festival.
But is there money in organising festivals? In the US, it seems, you can score big: Coachella, the most profitable festival, sold 158 000 tickets and pulled in $47.3-million in revenue in 2012, a $17-million increase from 2007. Tickets for the 2013 event sold out in 20 minutes.
At Oppikoppi, however, a cursory glance at the stingy-looking festival-goers wouldn’t suggest these sorts of profits could be made locally.
Oppikoppi founder Carel Hoffmann dismisses the notion that you can make big bucks from music festivals. “It simply has too much detail and way too many stages and artists to be a serious money-making scheme. It remains fun though,” he says.
In fact, Hoffmann says, if the organisers didn’t have other forms of income, Oppikoppi wouldn’t exist.
Some festivals are more profitable than others. Tickets for the Rocking The Daisies festival, held just outside Cape Town every October, sell out almost immediately. Organisers rake in R14-million in ticket sales alone — add sponsorships and merchandise sales, and you’re talking real money.
Hoffmann says the fact that Oppikoppi sells 20 000 tickets a year does not automatically lead to bags of money.
Consider the economics: a ticket costs between R600 and R700, from which organisers must subtract value added tax (VAT), fees for the Southern African Music Rights Organisation, and ticketing and credit card fees, among others. This leaves organisers with 75% of the take, at best.
Then there’s the cost of holding such an event — including paying the bands to pitch up.
And the government provides no funds, so organisers lean on corporate sponsors.
It’s a tricky tightrope: hardcore hipsters will rail against “commercialisation”, but corporate sponsorships make up a huge part of the total budget.
Hoffmann, as you might expect, does not believe gigs such as his should be free anyway. “If you make the art free, people tend not to appreciate the work and, in the long term, it kills the sustainability,” he says.
Brian Little, the founder of Rocking The Daisies, says “sponsors add massive value — both financially as well as by improving the holistic experience”. So where does the money go? Musicians take the lion’s share — about 50%. Fees for technical support typically take up 25% of the takings, labour and management 15%, marketing another
If you make the art free, people tend not to appreciate the work and it kills the sustainability
10%, while other minor costs account for the remaining 10%.
Most festivals want to have a headline “international act”, but that’s especially difficult thanks to the rand’s plunge against the dollar in the past two years. And Oppikoppi falls in the northern hemisphere’s summer festival season, which makes it even tougher to get international acts.
“It drives you crazy at times, but that’s life for a festival booker,” says Hoffmann.
Little also has experience of trying to book international acts. “Sometimes organisers get good value for money, and sometimes they don’t,” he says.
International artists who graced stages at Rocking The Daisies festivals include Crystal Fighters, Rudimentals and MGMT. At Oppikoppi, Aloe Blacc, Editors and Cat Power have been on the line-up.
Look outside the festival gates, and you can see how Oppikoppi might benefit local communities in Northam. The town sees Oppikoppi as its “mid-year Christmas”, says Hoffmann. Post-festival, of course, brings a sobering return to reality.
“I think the KFC owner once told us that his turnover triples or quadruples over that period. Same story for all the others — pharmacies and petrol stations,” says Hoffmann.
If one assumes that the average person will spend at least R300 (meal, petrol, and six-beer pack) during the event, this would give the local community between R40-million and R60million. Add the costs of accommodation and other necessities, and revenue rockets.
There might be a squeeze on consumer spending elsewhere, but organisers are grateful that fans are still heading to Northam for their annual ritual.
“We are moving to our own rhythm,” says Hoffmann.