Valentina Asciutto
Mr.Reuter
Economics-B4
28 April 2015
Economics Within Lollapalooza
Showcasing several of music’s most notable artists across eight stages, Chicago’s Lollapalooza will return for its annual setup in Grant Park this upcoming summer. The 3 day festival attracts over 300,000 people from not only Chicago but all over the U.S. There is no age restriction to enter the grounds therefore Lollapalooza attracts teens as young as 16 and the older college students. Everyone comes for good entertainment, but most of all to see their favorite artists such as featured in this video for the the 2015 lineup consisting of Paul McCartney, A$AP Rocky, Metallica, and Sam Smith. 
Tickets for the festival are not incredibly high, but they aren’t your typical rave priced tickets either. The price of tickets generally rises with the approximate attendees per year and the date the ticket(s) is purchased. With that said, ticket prices tend to climb the closer the festival approaches. This is due to an increase in demand. More people want to witness their favorite artist play or listen to their favorite genre of music although, they may purchase tickets after the early birds have taken all the deals. According to Forbes, a three day pass, the most popular deal, for the 2014 Lollapalooza music festival was $395.25 on the secondary market. Furthermore it was reported that this was a 39.6% increase compared to 2013’s price of $283.05. Although ticket prices rose, the festival continued to sell out and therefore tickets became scarce.
Not only does an increase in the price of tickets not stop fans, but also their money to further spend while there is inevitable. Annually the revenue is increased for the city of Chicago, Grant Park, hotels, and businesses all in 3 days due to Lollapalooza. Don Welsh, president and chief executive officer of Choose Chicago, said in regards to the 2013 festival that, “...the organization estimates Lollapalooza’s economic impact on Chicago was $140 million.” By looking at the pie chart to the right it can clearly be deciphered that all the immense income the windy city takes in is due to the fans. With a little over half the people coming from elsewhere, the money generated goes forth to improve the festival for the upcoming years but to also invest in improvements. Rahm Emanuel stated that, “$2.7 million of 2013’s income went to the Chicago Park District for improvement projects.” In all, this will benefit the citizens of Chicago by creating better recreational programs and safer parks for children. 
With Lollapalooza going into its 24th year since starting in 1991, an agreement signed back in 2012 will keep the festival in Grant Park through at least 2021. This new deal will require promoters and sponsors to pay millions in annual city and county amusement taxes and state liquor taxes. As mentioned before that ticket prices have rose, it can be concluded that it is due to this agreement. Although it bolsters government revenue, the deal ultimately has festivalgoers paying more for entrance. As mentioned in the Chicago Tribune by park spokesman Jessica Maxey-Faulkner, “Lollapalooza's continued presence in Grant Park would provide an approximately $1 billion revenue boost for the local economy over the next decade.” In the end, this is a big win for hotels, restaurants, the cultural community, and local parks that benefit from these new revenues.
Bibliography
"Festi-nomics: The Economic Impact of the Music Festival." Xo Karadise. 10 Feb. 2014. Web. 28 Apr. 2015.
Kot, Greg. "Lollapalooza Deal Changed; Lollapalooza and City Restructure Deal." Tribunedigital-chicagotribune. 14 Mar. 2012. Web. 28 Apr. 2015.
Lawrence, Jesse. "Lollapalooza Tickets Up 39.6% For Three Day Passes From Last Year." Forbes. Forbes Magazine, 30 July 2014. Web. 28 Apr. 2015.
"Lollapalooza Marks A Decade In Chicago." CBS Chicago. 30 July 2013. Web. 28 Apr. 2015.
Richards, Dean, Charles Hayes, and Tonya Francisco. "Lollapalooza 2015 Lineup Features Paul McCartney, Sam Smith." WGNTV. 25 Mar. 2015. Web. 28 Apr. 2015.
It's a really good idea to keep Lollapalooza in Grant Park. Being the festival that it is, the point was made how great it is for local businesses and restaurants. I'm surprised a bit to know that the ticket prices rise due to the amount of people that come.
ReplyDeleteConcerts are one of my favorite things in the world, so I loved your topic. I didn't realize just how much profit Chicago got from having Lollapalooza. Hotels can charge more, people are buying food, and just trying to see all that Chicago has to offer. They'll definitely see an influx of profit. Great article!
ReplyDeleteAs much fun as Lollapalooza looks, I'm going to stay away with the rising cost. But the fact that a portion of the money made at this insane event goes towards parts of the city is interesting to know! I figured that local businesses would have customers through the roof during Lollapalooza but I didn't think there would be numbers like billion. Is there any sort of comparison though? As in another annual concert (such as Summerfest) that this event rivals in income? It would be very cool to see the difference. Very informative article overall!
ReplyDeleteGreat topic for your post! I knew that Lollapalooza took in a great deal of money, but the estimated price you mentioned was insane! Chicago is a great place to hold this exciting festival, and the need to buy a hotel room (sometimes for a couple days) makes it an even greater economic impact because the prices of most hotels in Chicago are definitely very pricey. Also, the fact that Lollapalooza brings in many hot artists of this time is more attracting. Even more, each year the line-up is always well rounded with different genres so the festival will attract just about anyone. Overall, interesting article!
ReplyDeleteHoly crap those tickets are really expensive! The problem with them being priced so high is that people will continue to purchase them while other people, with less money, won’t have the chance. However, this does provide some cash flow around the nation, increasing the economy.
ReplyDeleteThe price that people are willing to pay for tickets seems kind of high at $395.25 for a 3 day pass, but I guess when you break it down it seems like a good deal. They would be even cheaper if you could buy them straight from the original seller, but that’s pretty hard to do, and secondary sellers will keep raising prices with the demand for tickets being so high. I like how you mentioned that hotels and restaurants surrounding Grant Park are also benefited, because I knew that festivals like Lollapalooza and Summerfest took in a massive amount of money, but I didn’t really think about how they affected the economy of the city that they take place in.
ReplyDeleteI love this topic, being one who loves music I find Lollapalooza to be so cool. It attracts some of the best artists to date and so many people go to it. Alot of people travel from all over the world so hotels make bank off of this event too. The many different genres this festival offers make it so much easier to attract any music lover as well.
ReplyDeleteFor someone who like myself is interested in going to lollapalooza I'm glad that it is staying in Chicago. But as stated in the post, the prices do increase greatly as the event draws closer. Last year when I checked the prices were already starting at about $100. But the price must be worth it to the Chicago area and businesses.
ReplyDeleteI really enjoyed this post, and sort of comparing Lollapalooza to Summerfest and seeing the numbers behind each one is very interesting. Not only does Chicago prosper from hosting such a festival and raising ticket prices, but also the surrounding area adjusting their prices in hopes of creating a little more profit is interesting to see how much money one city can make in three days time. I think what Lollapalooza does the best is how it brings in artists from all genres, which going off of previous comments, attracts people with different tastes in music, which in the end brings in more revenue.
ReplyDeleteI think its amazing the amount of revenue that can be made over a festival/concert. With popular artists coming on stage it drives a huge demand, and with a limited supply of space for the audience it makes it easy for the price of tickets to rise. Also, I never really think about how much the businesses around the festival thrive from events like this.
ReplyDeleteI really enjoyed your post. I clicked on the video link that you had and the advetisement for the video was for a hotel in Chicago. Knowing that hundreds of thousands of attendees will be at these concerts, hotels should be advertising as much as they can during this time of the year. This just shows how much of boost Lollapalooza really is to the city’s economy.
ReplyDeleteI have heard a few things about this festival but nothing much. I found it very interesting how much money this brings in but not a surprise due to the amount of the tickets. I would like to know why they sell only a certain amounts of tickets when it is a stand up concert grounds. I remember when Imagine Dragons came to Summerfest and they just kept packing people into the grounds. It is cool how music festivals like this can be such a good thing for a cities economy.
ReplyDeleteI find it pretty crazy how much revenue can be made off of music festivals, Summerfest is one of, if not the biggest music festival in the nation, and it brings people to our own hometown every year. Lollapalooza tickets cost way more, so I can only imagine how much that brings in for Chicago. I like that it is going to stay in Chicago for a while yet, because I plan on going a time or two.
ReplyDeleteThe topic was interesting and fun, to see the prices at first shocked. But after seeing what they are getting back with all the great music for anyone, location, surround amusements, it definitely outweighs the costs. Having Lollapalooza really boosts the economy of Chicago and the surrounding hotels and business'.
ReplyDeleteLollapalooza is a wonderful experience and its safe to say that it's worth the money. It did not surprise me at all how much revenue these music festivals bring in, seeing as their popularity is continuously growing. Even though the lineup sucks this year, people still look forward to going for simply the "music festival experience."
ReplyDeleteI thought that your topic was very interesting because I love concerts and love going to festivals similar to Lollapalooza, but I thought it would be similar to our Summerfest in that way but the prices at Lolla are so much higher than I would’ve thought. At Summerfest tickets normally stay around $20-$25 for one day or about $70 for a three day pass, that is considerably less than about $400 for three days. However you did make a good point that it did bring in a considerable amount of revenue to the City of Chicago. Overall I think that your post was really interesting and eye opening.
ReplyDeleteThe amount of money that music enthusiasts—myself included—are willing to spend hundreds of dollars to be able to watch their favorite shows live. I think it was a very good idea for Grant Pak to have an agreement on hosting the festival until 2021, as much money is spent and received by the local economy, helping both the people and the city. Though I would love to attend this festival, I don’t know if I’d be willing to spend almost $400 for a 3-day pass since I am a broke teenager, but I can see how the price is fair, as many popular artist go to this, whose ticket prices for their own tours can get as high as a thousand dollars.
ReplyDeleteThis was a great topic and I've actually never heard of this music festival so it was interesting to read about. It would be interesting to see how much revenue Summerfest makes compared to Lollapalooza and compare the differences. It's crazy to think about how much money Chicago makes and I think it's a great way to help out the city.
ReplyDeleteI found it interesting on how "The price of tickets generally rises with the approximate attendees per year and the date the ticket". This allows them to slowly raise the price without greatly effect the attendance of the concert with the slow increase.
ReplyDeleteI found it interesting on how "The price of tickets generally rises with the approximate attendees per year and the date the ticket". This allows them to slowly raise the price without greatly effect the attendance of the concert with the slow increase.
ReplyDelete