1) In case you’ve been under a rock for the past week, this weekend marks the 40th anniversary of the original Woodstock Festival. 2) I recently finished reading Chris Anderson’s new book Free (which I covered in a post here). Listening to the Woodstock album again (on LP, I’m totally old skool) and thinking about Woodstock in the context of Free made me remember the announcement that changed the concert completely:
It’s a free concert from now on. That doesn’t mean that anything goes, what that means is we’re going to put the music up here for free. What it means is that the people who’re put — backing this thing, who put up the money for it, are going to take a bit of a bath. A big bath. That’s no hype, that’s true, they’re going to get hurt.
According to the New York Post, the initial budget for the festival was $500,000. The promoters’ goal was to host a three-day concert for about 100,000 people paying 5 bucks each. Although they met the goal of selling 100,000 tickets, the promoters never finished the ticket booths or fences (due to a late change in venue), and the crowd quickly became overwhelming. To avoid making a dangerous situation worse, they made the decision to turn Woodstock into a free concert.
Although great for the spirit of Woodstock, this was a devastating financial decision for the festival organizers. The Telegraph did an interesting interview with the Woodstock promoters where they explained the financial mess this way:
“I had a laundry list of problems after the event,” says Rosenman. “We had partners we had to deal with. We had very angry bankers. We had creditors we had to deal with. We had some lawsuits from people claiming injustices ranging from damage to property to strange things tampering with their cows.”
It would take them 11 years to get out of debt.
Looking back, was this “free concert” a financial success? Emphatically yes… for some people. A few didn’t do so well while others made out like crazy. From the NY Post article:
“We really weren’t mature enough to handle it,” says Lang, who eventually sold out his interest for $31,750. Warner Brothers swooped in and snapped up the rights to the documentary movie and the soundtrack, two properties that have generated more than $100 million in profits, not a penny of which ever went to Lang.
So just the movie and soundtrack alone generated at least $100 million, and that doesn’t include the other subsidiary rights and licensing deals that have been made in the years since. In addition, many of the performers who played at the show saw their careers significantly enhanced by the Woodstock exposure. The big acts, like The Who, Jimi Hendrix, and the Grateful Dead, got bigger. New musical talent was discovered, and financially lucrative careers were made. Even Lang, who sold his share of the soundtrack and movie rights, went on to make a name as a successful producer, promoter, and talent manager.
Total amount of money created by this free concert? Who knows? But it is clear that the financial empire that Woodstock created still drives revenue heading up and to the right. According to a Reuters article, Woodstock-related products may generate $50-100 million in revenue this year alone. And a new movie directed by Ang Lee, Taking Woodstock, comes out on August 28. The beat goes on.
One closing thought as I consider the 40th anniversary of Woodstock in the context of free business models. It is one thing to decide to make your product free. It is another thing altogether to build a profitable business model around free. Those who do the former are not always the same to do the latter. It might not seem fair that those who create the most value don’t always reap the benefits, and it is something to seriously consider when playing around with free business models.
But it sounds like most of the organizers have ended up doing fine (or way, way better…), and who says they were in it for the money anyway. Happy anniversary, Woodstock!