There are a lot of festivals. There are also a lot of different types of festivals. Your music may not be the right kind for every festival. So before you spend time and money applying to every festival in the world, make sure you narrow down your selections to ones that you stand a chance of being at.
Metal Is Not Edible
We're going to go ahead and get your first restriction out of the way. If you play heavy, dark, and/or depressing music, you've already been axed from a large majority of events. Remember, a lot of festivals are street fairs, city fairs, corporate events, etc. They are generally trying to cater to a crowd full of families, kids, and people shopping at all the vendor booths. They want live music that is "appropriate" for the vibe of the festival.
That doesn't mean there aren't ANY festivals that will book you. It just means you have to aim for ones that are open and willing to have your particular kind of music. Most of them come in the way of music festivals, not festivals that happen to have music.
Size Matters
Not all festivals book small acts. The larger and more famous the festival, the less likely they are going to. But if they are a famous festival that does book small acts, there will be a lot of competition. They will always be more likely to book a small band that has developed a decent-sized audience, or one that has previous festival experience, than a small band that has less than a dozen gigs under their belt.
Themes
Some festivals are themed. A renaissance faire, for example, has a very distinct theme, and they go to great lengths to ensure that the theme is preserved. Lots of them won't allow you to play an instrument if it requires electricity. If that is the case, there's no point in trying to land a spot if you are a trance DJ.
However, if you are a themed band, then you can probably find a festival that is looking for exactly you. That means that all of you acoustic, pirate-metal bands actually have a good chance of being part of the renaissance faire (Just in case you don't believe me - it does exist).
Money
As with any gig, payment is a factor you should consider. Some festivals have too much money at their disposal, others don't have near enough. Regardless, you will find that a lot of them aren't willing to pay the smaller bands. They will ask you to play for free and use the money to bring larger names onto the bill. It's up to you to decide whether or not it's worth it. If the festival can provide you with a large audience, it is probably well worth it. But if you are only going to be playing to 20 people, it may not be worth it.
If you're wondering why playing for free would ever be a bad idea, it's because once you get on that path, it can be hard to get off. Next year, they may refuse to pay you regardless of how well you did purely because they know you are willing to do it for free. On top of that, people who organize festivals DO talk to one another. Word may spread that you are willing to play for free. Your decision should depend on what you are looking for out of the festival, and what you want from future festivals.
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Image: Tim Toomey