Another year, another Lollapalooza. And with that came another mad rush for tickets, even before the announcement of a lineup.

That’s because, expert say, the powerful destination festival, which attracted 300,000 people last year, is shifting away from its early roots as the irrefutable curator of alternative music into a premium-priced lifestyle event. Giving ticketholders a place to interact, dine, and play for a summer weekend, drives ticket sales as much, if not more, as the music.

“It’s the social experience that now matters. One thing you see repeatedly with the most successful festivals is they are all about trying to give fans a good experience. The music is really a sideshow,” says Gary Bongiovanni, editor-in-chief of Pollstar, a leading concert industry media outlet.

Lollapalooza, scheduled for Aug. 1-3 in Grant Park, has carved out such a unique space that it can sell out its $250 three-day passes — as it did Tuesday — in just an hour.

The festival now competes — not just with large-scale rock festivals like Coachella in the California desert, and Bonnaroo outside Nashville — but with a crowded field of mid-sized festivals in secondary markets like Forecastle in Louisville, Ky., or Rock on the Range in Columbus, Ohio, and both Pitchfork and Riot Fest in Chicago.

According to Billboard estimates, gross ticket revenue for festivals in the United States increased nearly 50 percent over the last five years. The reason: more festivals launched in the U.S. over the past five years than over the last 30 , crowding the market with competition for the ever-shrinking pool of marquee-name headliners. So promoters are being forced to come up with new ways to drive sales, or to create a unique identity, which may not necessarily rely on just the music.

“The holy grail in the festival business is a festival with a site so attractive, it almost doesn’t matter who you program, because people know if they go there, they’ll see great music and they’ll have a great experience,” says Joe Levy, editor of Billboard.

The destination festival market has already peaked in Europe, where it originated decades ago, and there are signs that the field is growing to a saturation point stateside. Live Nation and AEG Live, the biggest concert promoters in the U.S., are alone responsible for more than two dozen festivals, including Coachella and Jay-Z’s Made in America festival in Philadelphia.

Even C3 Presents, the Austin, Tex., company that produces Lollapalooza, has stake in nearly 20 festivals around the world, including the expansion of the Lollapalooza brand in South America (Buenos Aires, Santiago and Sao Paulo). William Morris Endeavor, a C3 partner in Lollapalooza and the agency operated in part by Ari Emanuel, brother to Chicago Mayor Rahm Emanuel, is also expanding its festival portfolio, announcing in February it is investing in six country music festivals across the U.S., including the Country Thunder brand in Twin Lakes, Wis. Representatives for C3 declined requests to be interviewed for this article.

Then there is competition from the dozens of midsize festivals that have cropped up within a half-day’s drive of Chicago. Forecastle, for example, draws heavily from markets outside Louisville, including Chicago. The festival’s draw, besides the music — which, this year includes Outkast, the Replacements, Beck, and Jack White — also focuses on regional food, local micro-beers and, of course, Kentucky bourbon.

“We can’t just depend on the Louisville audience, it’s more regional; there has to be a reason for people to come down here,” says J.K. McKnight, Forecastle’s founder. “We feel Kentucky has a real brand.”

The potential threat to festivals like Lollapalooza, or other festivals in Chicago, is that concertgoers in smaller markets now have a festival with A-list talent in their own backyard, so why travel? At the same time, these festivals also provide a lure to Chicagoans: premium acts at lower ticket prices and housing.

But even with a landscape cluttered with festivals, the real competition in booking talent is not necessarily coming from nearby states, but from overseas.

“Our biggest issues aren’t festivals around us, it’s Europe,” says Mike Reed, producer of Pitchfork, which takes place July 18-20 in Union Park with Beck, Kendrick Lamar, and Neutral Milk Hotel as headliners. “If bands say ‘we want to do Europe in July or August,’ that can really take somebody out of the game.”

At times, getting headliners means performing tricky feats of routing. Reed reports that last year, Bjork played the Pitchfork festival on a Friday and then flew to Japan the next morning to play Fuji Rock Festival that week; that same weekend Yo La Tengo played a festival in England on a Saturday, then arrived in Chicago the next day to play an afternoon set in Union Park.

McKnight agrees: “It’s an international market at this point. It’s amazing that we can get all these bands to Louisville in the peak of the summer tour season, but it’s not easy. At the end of the day, it comes down to relationships, plus a degree of luck.”

Reed says that each year the number of marquee acts hitting the road is limited — “there’s only so many dancers to dance with,” he says. But with Pitchfork, the aim is to curate a festival that appeals to a certain aesthetic that makes it different from the competition, and to present A-list headliners who are drawn to a festival operating on a smaller blueprint.

Levy says that the festival market in the U.S. is not “limitless,” but that festivals like Lollapalooza are successful because they rely on brand recognition, a beautiful site and the allure of Chicago’s nightlife to drive sales.

“The bills on many of these festivals are so similar, there isn’t a guarantee we won’t reach a saturation point. It isn’t saturated yet, but [festival producers] need to approach the market with care,” he says.

Mark Guarino is a local freelance writer.