The Fateful Hangar
Much of Iceland’s cultural output depends largely on enterprising spirits. Throughout Iceland’s young entertainment history, ambitious go-getters with limited resources have set the tone for the creative sector’s unruly operations.
That’s partly how Iceland’s biggest music festival, Iceland Airwaves, got its ball rolling in 1999. From its humble beginnings in Reykjavík airport’s aircraft hangar number four, the festival has grown into an unmissable weekend for music lovers. Attracting countless visitors over its lifetime, Airwaves has been an imperative tool to connect Icelandic musicians to the international industry, while cementing Reykjavík as one of the top destinations to experience live music.
Having gone through periods of tumult, prosperity, bankruptcy and exponential popularity, Iceland Airwaves is now celebrating 25 years of staying alive.
Day one
Like most Icelandic cultural institutions, the minute details of how Airwaves came to be are clouded by time and lack of archived sources. But Þorsteinn Stephensen might be the man who comes the closest to an accurate depiction, given his involvement in the festival since day one.
For a promotional event for GusGus’ album Is This Normal? in February 1999, Þorsteinn was one of the many people involved in helping the band transform the airport hangar into a performance venue. “People think this is the first official Airwaves gig, but it really wasn’t,” Þorsteinn clarifies.
The premise was simple: bring the foreign music industry to GusGus, not vice-versa. Sponsored by Icelandair, the airline supported the venture by securing flights for music industry personnel — a service they provide to this day as the event’s principal patron.
“From this, we had the idea to create an annual music festival. Icelandair was so happy about this because Iceland wasn’t really being promoted at the time. Every piece of coverage was the equivalent of gold,” he says, emphasising the festival’s dual role of promoting Icelandic music and Iceland itself as a tourist destination.
In October 1999, Airwaves was formally kickstarted in the same yellow airport hangar, welcoming around 500 guests to its debut. As success repeated itself in subsequent years, Þorsteinn suspected the organisation team were on to something. “We had run into a working formula. Because so many journalists came over, we decided to make this an industry festival,” he says, adding that “Iceland was just so hot at the time.”
Responsible for turning up Iceland’s cultural heat in those early days were performances by GusGus, Björk, Quarashi, and the young up-and-comers Sigur Rós, whose Airwaves show in 2000 Þorsteinn claims was one of the festival’s “defining moments.” The band was subsequently featured in the New York Times. “Everything goes sideways and interest in Iceland skyrockets,” Þorsteinn recalls.
Bankrupting Airwaves
By 2003, Airwaves had become the world’s most popular party. “Everyone was there, whether they performed or not. Musicians and journalists lay like driftwood on every corner after partying at Sirkus and Kaffibarinn,” Þorsteinn reminisces.
But as with all parties, the hangover soon came in the form of an economic recession.
“During those first years under Þorsteinn, it had a lot of edge,” former Airwaves director Grímur Atlason describes. Taking over the reins after the 2009 edition, Grímur was well aware of the festival’s comings and goings due to his previous roles as a music manager. His vision for the festival was to preserve some of Þorsteinn’s edge.
“I found the key was to create something crispy,” Grímur explains. “Like a meatball or a fish ball that’s not mushy — you can feel the bite in it. And create a festival where you’re bringing something that wouldn’t otherwise come to Iceland.”
As Grímur puts it, the festival’s success and relevance depend on a delicate balance between performers, the city of Reykjavík and the tourism industry.
“You should be looking at those factors. That was the harmony; what happened all across the city I think was the beauty behind the festival,” he says, referring to the festival’ once vibrant off-venue scene — a feature which has undergone a major transformation.
“[One of the things] eating up the festival was the off-venue schedule. But at the same time, that was a part of the magic,” Grímur reasons. “Then it either worked out or it didn’t. It did, but I thought it was too big,” he admits.
After two years of running the festival with a deficit before going bankrupt, Grímur stepped down and local promoter Sena Live took over.
Leading up to the festival’s 2018 bankruptcy case was an incremental expansion of the festival. In 2017, Grímur’s final year at the helm, Airwaves was operating on multiple fronts. Over four days, the festival schedule included a headliner concert by Mumford & Sons; 207 performing artists playing 229 shows in Reykjavík and 30 in Akureyri across 16 venues; and a whopping total of 500 off-venue performances. In contrast, the 2024 iteration of the festival incorporates six venues over three days.
“We did too much. I admit that,” Grímur says, pointing out the festival’s heavy scheduling in his last years.
Although the festival was a financial loser under Grímur’s leadership, it demonstrated the possibilities of ambitious festival programming in a place like Iceland. Ask nearly anyone, and they’ll say that the culture of off-venues embedded an air of magic into Reykjavík, with live music playing on every corner and bursting forth from seemingly every bar and storefront.
Creating business
Interestingly, Grímur mentions he always perceived the festival running best as not-for-profit — only needing to amass enough income to cover the next festival. “Although it looks like we were playing with other people’s money, that’s not the case. The festival didn’t own more than it received,” Grímur clarifies. “I think [the festival’s] most advantageous shape is as a non-profit festival.”
People involved with creative businesses have always recognised the sector’s economic effects. That understanding had been latent — and probably still is — in the eyes of policymakers, until a recent report published by the Ministry of Culture and Business revealed the substantial economic input of the country’s cultural output.
According to the report, every króna invested by the government into the arts generates three more in the economy. Furthermore, it highlighted that the direct contribution of cultural activity accounted for 3.5% of Iceland’s GDP —a figure only surpassed by the fishing industry’s 4%.
Ísleifur Þórhallsson, the current director of Iceland Airwaves and CEO of Sena Live, is well aware of this fact. “It’s been calculated that Iceland Airwaves creates business in the economy for about a billion ISK [approx. 6.7 million EUR] every year, when accounting for flights, hotels, food, trips,” he says.
When Sena took charge of the festival in February 2018, Ísleifur and his team were tasked with making necessary, yet unpopular, changes to steer the festival away from the rocks.
“I understand why it went under. It’s incredibly fun but equally challenging, and includes major responsibilities and duties,” Ísleifur explains. “It’s a challenge to manage a festival that fulfils every single requirement and makes everyone happy without losing money.”
“We realised we would probably stumble and learn many lessons, but we were also confronted with making necessary changes which would not be popular,” he admits. “Everyone loves off-venues. We love off-venues as much as anyone else, but when that stopped adding to the festival and started to literally replace it, it was evident that was a part of the problem,” he surmises.
Ultimately, Sena implemented its austerity measures which included shortening the festival, minimising headlining acts and reducing the off-venue scheduling. A big change was the reduction of artist payment and complimentary guest tickets, a decision Ísleifur admits was, “Not fun. But if every single performer has a complimentary ticket, you’ve got a built-in feature to give away 2000 tickets.”
This reshaping of the festival made Sena take a long, hard look into its core roles, resulting in a renewed emphasis on its original purpose.
“The basic strategy we tried implementing since the beginning is to do less. Scaling back the festival and trying to return to the festival’s core,” Ísleifur clarifies. “Asking questions like, ‘Why was this festival founded? Why does it exist?’”
“It was founded as a platform to promote Iceland through Icelandic music,” he says. “So it was about going downtown and not chasing the biggest bands in the world.”
Eulogy
To make conditions even more difficult, Ísleifur’s had to deal with the onset of the covid pandemic only two years into Sena’s management of the festival. The pandemic’s undoubtedly most devastating repercussions for the global live industry was the erosion of ticket sales.
“What we’ve realised is that the pre-covid reality is gone. We’re just figuring out this new reality,” Ísleifur says.
With ticket sales as the festival’s biggest income stream, Ísleifur claims that government support is almost nonexistent. When compared to other Nordic countries, Airwaves lies on brittle foundations.
“[Festivals in] Norway, Sweden and Denmark — it’s almost as if they are on a fixed budget. The state, authorities, and municipalities understand that they create so much value, that the patrons get it back multiple times over,” he argues. “They’ve decided that a festival like this shouldn’t have to rely on ticket sales or private sponsorships,” he asserts, partially reverberating Grímur’s comments on running as a non-profit. “The festival needs more support to ensure the operational baseline for the future.”
However, despite financial hardships or momentary controversy, Airwaves has provided an unquantifiable amount of personal experiences, creative opportunities, networks and economic stimuli.
“If I’m completely honest, we love this festival; it cannot disappear,” stresses Ísleifur. “It cannot die. It is such an important phenomenon for the Icelandic music industry and the country itself, it would be with a very heavy heart to see it disappear.”
“It’s a very valuable brand and it has done a lot for all of us. People from everywhere in the world came over, saw our country and heard our music,” says Grímur. “That’s good stuff.”
Thinking back to those early days in the yellow hangar, Þorsteinn admits the festival’s longevity is a pleasant surprise. “[The fact] that it would still exist after 25 years — that we’d been thinking on those terms — it never entered our minds.”
Go celebrate 25 years of Iceland Airwaves in downtown Reykjavík on November 7-9. Full festival price is 21.900 ISK with day passes available. For the full lineup and more information, visit icelandairwaves.is.
Get in the festival spirit or take a stroll down memory lane. Follow along with the Grapevine’s Iceland Airwaves coverage.
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