2016 is shaping up as the year of live streams.

Nearly every major sports and entertainment event has a live stream in 2016, with the vast majority bringing one or more sponsors along for the ride.

Case in point: Toyota Motor Sales U.S.A., Inc. this year is sponsoring new live streams for two music festivals: the Sasquatch music festival in George, Wash. and this week’s Firefly music festival in Dover, Del.

The automaker is one of a growing number of companies sponsoring live streams. Other deals include 7-Up and the Ultra Music Festival, Goose Island and the Pitchfork Music Festival, and T-Mobile and the Coachella music fest.

Rather than serving as a broadcast sponsor, some companies are cutting deals directly with the festivals themselves.

Red Bull TV this year will offer more than 18 days of live music programming—more than double 2015—via partnerships with six music festivals. The “Season of Festivals” program includes Primavera Sound (Barcelona, Spain); Bonnaroo (Manchester, Tenn.); Roskilde (Denmark); Lollapalooza (Chicago); Bestival (Isle of Wight) and Austin City Limits (Texas).

Live streams give rightsholders the opportunity to engage consumers around the world and provide sponsors a new activation platform.

“(Live streams) are a terrific way to partner with a brand and bring the festival experience to consumers who can’t make it to the event,” said Matt Frampton, vice president of sales with the Pitchfork Music Festival.

“We do a lot of content offerings, and the live stream is the biggest we have to offer.”

For sponsors, live streams offer one primary benefit: the opportunity to drive scale.

“It’s an effective way to extend a regional message into a national or international message,” said Andrew Klein, senior vice president with AEG, the producer of Coachella, Stagecoach and other major music festivals.

Live streams also benefit artists due to the changing dynamics of the music industry.

“The industry has changed significantly as revenue from recorded music dried up. Everything is on the table in a way that it wasn’t before,” said Lesley Pinckney, senior vice president of digital strategy with GMR Marketing.

“Being on Yahoo during the Stagecoach music festival for all the world to see is good for the artist,” said Klein, noting that AEG Live has an in-house team charged with securing clearances from artists and their labels.

The Key To Success: The Right Distribution Partner
Rightsholders and sponsors typically enlist Yahoo, YouTube, Twitch and other companies to extend reach and drive tune-ins.

Coachella, for example, distributes its live stream on YouTube, the Ultra Music Festival uses Twitch, while Stagecoach distributes content on Yahoo.

“The success of a live stream has a lot to do with the right distribution partner. A company like Toyota could stream on Toyota.com, but I don’t think that would be a good way to drive tune-ins. People go to Toyota.com to learn about cars, not watch a concert performance,” said Klein.

More than two million consumers viewed the Toyota-sponsored Stagecoach stream, he said.

Other festivals have the backing of large media companies with their own distribution networks. In addition to its own web site, Pitchfork distributes its live stream on Condé Nast’s TheScene.com as well as YouTube.com, Instagram and other third-party syndication networks. Condé Nast purchased Pitchfork in 2015.

“We have built-in distribution—we don’t need to partner with another media company,” said Frampton, noting that Pitchfork.com alone receives roughly eight million unique visitors each month.

Video on demand plays a key role in extending reach, said Frampton, noting that consumers may not be able to break away from other activities on a Friday or Saturday night to watch a live stream of a music festival or another event.

“A live stream might do great with several hundred thousand views, but a video on demand may end up with millions of views.”

Frampton points to a video by the electronic music duo Disclosure as an example. A full set performance by the band at Pitchfork Paris several years ago continues to draw more than one million views each year.

“That blows our mind. It continues to do well several years removed from the live stream.”