Following “substantial losses” from this year’s tour, We Love Sounds Pty Ltd has been announced as insolvent. As reported by The Music Network, the company owes just over $430,000 to creditors, of which approximately $300,000 is owed to the five festival co-owners themselves Ben Korbel, Declan Lee, Patrick Nash, Wade Cawood and Simon Beckingham.

As punters can attest, attendance was down at each stop this winter, with the Perth leg cancelled entirely. Korbel confirmed the news of the insolvency today in an interview with The Music Network.

“Combined, the five owners, along with our interstate partners, have already absorbed near $1 million of the loss,” he said. “However at this point we hit a threshold that we could not manage any further and in becoming insolvent, were forced to appoint a liquidator.”

He also mused that We Love Sounds has suffered from the over-saturation of the festival market. “The biggest festivals, for the most part, are selling out however much more slowly, and some major players are barely breaking even now on their usually multi million dollar events. When We Love Sounds launched, there was a relevant place for it in the market, however as new festival after festival entered the market, ticket buyers have become saturated with large scale events with large scale line-ups.

“In order to survive as a business, we went with ‘bigger is better’, even though our core philosophy was not aligned with this in any way. Sadly business health and artist vision do not always align.”

When inthemix spoke to Korbel ahead of the 2010 festival tour, his comments foreshadowed the difficulties ahead. “I think everything is cyclical,” he told us. “The festival market will correct itself. As that happens, people will have had too much of a good thing.

“Things will move back into smaller venues. It’s already happened with live music, people will still go out to small venues. The problem is specific to electronic music at the moment.”

We here at inthemix have been right behind We Love Sounds since its humble beginnings as We Love…Sydney in 2004, so this is troubling news indeed.