The Importance of Quality: How Music Festivals Achieved Commercial Success

Posted: 2 Mar 2012 Last revised: 24 Nov 2015

See all articles by R. Scott Hiller

R. Scott Hiller

Fairfield University - Department of Economics

Date Written: June 27, 2013


Despite the existence of a number of famous American music festivals in the 20th century there was no major annual production until the early 2000s. This paper examines what characteristics are important to current commercially successful music festivals when making hiring decisions. This decision is similar to other industries such as professional athletics and online video services such as Amazon Prime and Netflix. A model of customer demand motivates the empirical analysis and provides an explanation for why festivals hire bands at varied levels of success and quality. The empirical analysis utilizes characteristics important to the negotiation of festival and the band as input in order to determine what is needed for the festival to attract consumers, as well as what input substitutions must be made to establish profitability. Results show that music festivals are more likely to hire inexperienced bands of higher quality as inputs over experienced successful bands in order to take advantage of the lower costs, a practice which is likely extended to other industries.

Keywords: Input quality, product characteristics, music industry, entertainment industry, expectations, bundling

JEL Classification: L15, L82, D84

Suggested Citation

Hiller, R. Scott, The Importance of Quality: How Music Festivals Achieved Commercial Success (June 27, 2013). Available at SSRN: or

R. Scott Hiller (Contact Author)

Fairfield University - Department of Economics ( email )

Fairfield, CT 06824
United States

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