This weekend is the 40th anniversary of the Woodstock Music & Art Fair, and if the young billionaires who’ve amassed fortunes via YouTube, Facebook, and various other exercises in selling crowds to themselves for free are grateful, well, they should be. The three-day gathering in upstate New York was a watershed moment in the history of American business, and while the music acts that played there may be wrinkled, gray, and largely forgotten, the entrepreneurial principles pioneered there are still extremely relevant.
Woodstock began with a tiny classified ad placed in The New York Times on February 1, 1967. “Young man with unlimited capital to invest looking for interesting, legitimate investment opportunities and business propositions.”
The young man was 23-year-old John Roberts, then a recent graduate of the University of Pennsylvania with a degree in history and a trust fund derived from a family fortune built on Polident denture adhesive and other drug store staples. Roberts wasn’t necessarily serious about investing. He and his friend Joel Rosenman, a 25-year-old Yale Law School grad, were interested in writing a sitcom about two young men with money who pursue business deals: The Times ad was research, a way to generate potential story ideas.
In two weeks, Roberts and Rosenman received thousands of responses. One correspondent had plans for a flying car. Another wanted to design an edible golf ball. Surely this was fodder for sitcom greatness, but Roberts and Rosenman had a change of heart somewhere along the way and decided to open a plain old boring recording studio — it didn’t fly, it wasn’t edible — in Manhattan. Because of that enterprise, and their reputation as young men with money to invest, an attorney Rosenman knew connected the two nascent entrepreneurs with 23-year-old Michael Lang and 25-year-old Artie Kornfeld.
Lang was a genuine hippie who’d owned a head shop in Florida, Kornfeld an A&R man at Capitol Records. They had plans to build a recording studio in Woodstock, New York — a rural getaway in the Catskills where Bob Dylan and other counterculture types had been congregating — and while they were at it, they wanted to produce a massive rock festival, too. Lang had produced a much smaller festival in Miami and Kornfeld had contacts in the music industry, but ultimately they were young men with no capital whatsoever; they needed partners.
After a few meetings, the quartet created a company called Woodstock Ventures, with Roberts putting up all the money to produce a concert that, according to their vision, would then fund a recording studio and various other endeavors. In April 1969, they started airing commercials on New York and Boston radio stations announcing the festival. Print ads in the New York Times and Village Voice soon followed. Tickets would go for $7 a day, or $18 for a three-day pass.
All told, they spent approximately $200,000 advertising the event. In addition, radio DJs and the underground press gave the event plenty of coverage. While the promoters were having trouble nailing down an actual location for the concert, interest in it was spreading rapidly. In June, Lang told the Times they were expecting as many as 150,000 attendees.
The sheer size of Woodstock was the first thing that made it revolutionary. With, say, 50,000 fans packed into a sports stadium, a concert could still be about the band. With 150,000 people plopped onto an alfalfa field, it wouldn’t matter how loud they cranked up the amps; the event would inevitably be about the crowd itself, the way like-minded friends and strangers interacted with each other in a bucolic 600-acre Eden in the middle of nowhere, an abstract virtual space made out of dirt and grass. Woodstock was, in short, a kind of role-playing game or social network. As a 1970 Esquire piece put it, “The cultural significance of the Woodstock festival lay in the simple fact of 400,000 kids hanging out for the three days. The music was the draw, but the people were the event.”
Along with the main stage where the paid talent performed, Woodstock included a “free stage” where anyone who so desired could get up and attempt to entertain their peers. There wasn’t much security on hand either; the concert-goers were expected to govern themselves. And of course, as people swarmed to the event in numbers beyond what anyone had anticipated — with thousands showing up before the disorganized promoters had been able to put up fences that would bar access to those without tickets — ticket prices dropped from $7 a day to the very contemporary price of “free.”
At the time, this seemed like a huge blunder. Advance ticket sales totaled approximately $1.4 million, but when all was said and done, the event cost $2.7 million to produce, leaving Woodstock Ventures more than $1 million in debt. In the wake of the festival, as Roberts scrambled to secure funds to pay his many creditors, he used words like “nightmare” and “disaster” to describe the event.
But “free” had helped build Woodstock’s user base to a size that distinguished it from every festival that had come before it. “Free” had reinforced the Aquarian values of the Woodstock brand — Oh, the community! Oh, the anti-capitalistic authenticity! — to the point where they could then be monetized for eternity.
Alas, none of the promoters profited much from their inadvertent entrepreneurial breakthrough. Just weeks after the event, Lang and Kornfeld sold their shares in Woodstock Ventures to Roberts and Rosenman for $31,750 each. Roberts and Rosenman in turn sold the distribution rights to a Woodstock documentary and a Woodstock three-record album for upfront fees that netted them around $1 million, plus a fractional percentage of any profits. The movie grossed more than $50 million for Warner Bros. by 1979. The album, released by Atlantic Records, sold over two million copies, at $14.98 each, in its first year of release. Roberts didn’t recoup his original investment in the festival until 1981.
A year after Woodstock, Mike Lang was trying to recapture the highly profitable magic of selling kids to themselves for free with a concept he dubbed The Train. The Train, Esquire contributor Craig Karpel explained at the time, would “highball America’s favorite rock bands across the nation, behind a funky old locomotive and who knows what else, giving free concerts along the right-of-way — free because the kids now refuse to pay. Money will be made when The Train rolls: The movie will be shot, the record cut, the TV sale made, the profit reaped.”
But despite his experience with Woodstock — his own case study in how to make millions off kids who refuse to pay for their entertainment — Lang apparently never found investors willing to back this enterprise; unfortunately for him, he was still about 30 years ahead of his time. • 14 August 2009