The sounds of summer: Has Glastonbury lost its mojo?

Slow ticket sales, competition from groovy new 'boutique' events – and disquiet over this year's headline act... It's not all harmony at Britain's biggest music festival. Tim Walker reports

Once upon a time, down on a little spread in the West Country, a farmer and his wife decided to stage a music festival. On 19 September 1970, the day after Hendrix died, Marc Bolan rolled up at Worthy Farm in a velvet-covered car to play to a modest crowd of 1,500 long-hairs. The £1 entry fee included as much free milk as you could drink. The farmer, Michael Eavis, hoped to pay off the remainder of his mortgage with the proceeds. Instead, he lost £1,500. But the sun shone, no one disturbed the cows and they all lived happily ever after. Or, at least, until now.

Thirty-seven years on, the 2007 Glastonbury Festival was the biggest yet. More than 177,000 people paid £145 each for the privilege of being rained on, risking their tents being washed away with the raw sewage and straining their necks to catch a fleeting glimpse of The Fratellis.

When the £155 tickets for this year's three-day extravaganza went on sale at 9am on Sunday, its organisers might justifiably have expected a stampede to match last year's, when the event sold out in less than two hours. Instead, a day later, about 35,000 tickets remained unsold, and the complex pre-registration system designed to deter touts had to be re-opened to accommodate fans who were slow off the mark. Of course, Glastonbury will sell out as it always does, perhaps by the time you read this. The festival now makes millions every year – most of which goes to charity – but has it lost its mojo?

The brightest star at this year's festival is one reason for punters' waning enthusiasm. Many were surprised when it was announced that the American hip-hop mogul Jay-Z would headline the Pyramid Stage on the Saturday night, traditionally the biggest gig of the weekend. Radiohead became the most acclaimed live act in the world after their Pyramid Stage performance in 1997, and most festival-goers expect a relatively traditional guitar band to fill the slot.

So concerned was Jay-Z about his appearance before an unfamiliar crowd that Eavis has offered to introduce him on stage personally, breaking a lifelong habit of remaining in the wings.

The NME's online message boards confirmed that the rapper was a controversial choice, with commentators suggesting he'd been chosen purely to appeal to a younger, more urban crowd than that to which Glastonbury has become accustomed. Others, however, welcomed his inclusion, suggesting the rap superstar was just what the festival needed to add diversity to its roster and shake up the middle-class "Hooray Henrys", who've been getting just a bit too big for their Hunter Wellington boots. Eavis and his team have been forced to play down rumours that Jay-Z is considering cancelling his appearance altogether after reading the negative press.

But Jay-Z, aka Shawn Carter, does epitomise the sense that Glastonbury has become overly corporate. Last week, days before marrying the singer Beyoncé Knowles, Carter signed an unprecedented $150m (£75m), "360-degree" deal with concert promoters Live Nation, giving the company a stake in every aspect of his career, and making him arguably the richest rapper in history. It's a far cry from the hippy, free festival spirit that gave birth to the first Glastonbury.

Eavis was inspired to establish his own festival after seeing Led Zeppelin play at the Bath and West Showground in 1970. Named the Pilton Festival, after the nearby village, it was a low-key affair, but it attracted the attention of hippy activist Arabella Churchill, who believed that the other major festivals in the musical calendar had become over-commercialised.

With her help, Eavis and his wife, Jean, organised the revamped Glastonbury Fayre in 1971, with David Bowie topping the bill, and a crowd of about 12,000. That time, admission was free.

A gap of almost a decade followed, with small, impromptu festivals in 1978 and 1979, before Eavis decided to institute an annual event in earnest in 1981. Churchill used the event as a launchpad for her children's charity, Children's World, while Eavis donated £20,000 of the profits to CND. Today, Glastonbury still gives the vast majority of its profits to charity. The main beneficiaries are Greenpeace, Oxfam and Water Aid, all of whom provide festival features and volunteers to man the event. In the past 15 years, Oxfam has raised more than £2m through its work with the festival.

Glastonbury's watershed came in 1997. After one of the festival's periodical years off to give the land and its owners a rest, the event returned with major sponsorship and a deal with the BBC to televise the event. Millions tuned in to see the coming of age of two national institutions, as crowds braved the Glastonbury mud to watch Radiohead play the show of their lives. It set a gold standard for live performance, but it also gave the public a fear of festival weather.

Radiohead retreated to the studio to make challenging, esoteric records. Glastonbury, on the other hand, jumped headfirst into the mainstream, becoming part of the urban sophisticate's cultural calendar, along with the Edinburgh Festival and the first day of the football season.

Soon, supermodels in print dresses and dreadlocked new age travellers were mingling in the mud together. Last year, Eavis complained that the complex ticketing system had turned off the youth demographic and made the crowd middle-aged. But there is also the matter of the line-up: among the most widely touted performers of the past two years have been Dame Shirley Bassey and Leonard Cohen, at 73, a year older than Eavis himself.

Paul Stokes, the news editor of NME, was at Glastonbury 2007. "Last year there weren't many teenagers and mid-twentysomethings at the festival," he says. "It was mostly those around the 30 mark, who aren't necessarily going to be jumping up and down at the front of the crowd. We should get a balance back so that there are lots of young people, middle-aged people, old people and kids. Last year, that balance was skewed for some reason, and it didn't quite have the magic of previous years."

Before '97, overcrowding was a loveable quirk of the event, a semi-legal remnant of the old, free festival mentality. Word would go round about which areas of the site's fence were vulnerable, and gatecrashers would stream in through the gaps. By 2000, however, it was beyond a joke. Organisers sold 100,000 tickets, but attendance was 250,000. Complaints from the locals went through the roof, and the district council refused to grant another licence until the problem could be solved.

Eavis decided to turn the festival's security over to concert promoters Mean Fiddler (now called Festival Republic), the largest events management company in the UK, who were already responsible for the Reading and Leeds festivals. He was concerned that the move would be seen as diluting Glastonbury's anti-commercial spirit and, after a brief dispute, Mean Fiddler allowed him to retain artistic control of the event in return for a 20 per cent share of the profits, which has since risen to 40 per cent.

The company built a £1m fence to keep out the gatecrashers. Then they instituted the pre-registration system intended to discourage ticket touting. Last year, for the first time, those who wanted to apply for tickets had to provide contact information and a passport photograph months before the tickets themselves went on sale; 400,000 registered for the 2007 festival. Only 225,000 took up the offer this year. Despite the new, £750,000 flood defences, last year's festival was still marred by bad weather, and Eavis has blamed this for the lull in interest.

"The day the tickets went on sale it was snowing in the South of England," argues Stokes. "People thought, 'do I really want to sit in a miserably frozen tent all over again?' Those who got up at 9 o'clock to buy tickets might have decided to give it a miss."

Eavis also blames the proliferation of new festivals for his event's diminishing appeal. This year, unlike previous years, Glastonbury tickets went on sale after many other festivals, none of which have the same demanding ticketing system. Though this may have put off a lot of prospective punters, it also means the statistics are skewed. By now, many thousands of Reading and Leeds tickets, for instance, are probably in the hands of touts. Glastonbury tickets, meanwhile, are reserved for fans.

A decade ago, Glastonbury's competition was minimal. The Reading Festival catered to a harder rock crowd, the youthful Virgin-owned V Festival was branded soulless and commercial, and Scotland's T in the Park was too far north of Watford to attract many Londoners.

Last summer, however, every weekend boasted at least one musical gathering inspired by Glastonbury's overarching success. There was Southwold's deeply civilised Latitude Festival, which featured dinner-party-friendly bands such as Arcade Fire and The Good, The Bad and The Queen, as well short plays staged by the Royal Court theatre. There was The Big Chill in Herefordshire, which this year includes a performance from Leonard Cohen. And Jay-Z is playing the O2 Wireless Festival in Hyde Park, making some Londoners wonder why they should travel to Somerset to stand ankle deep in mud.

Simon Taffe is one of the founders of End of the Road, a 5,000-capacity festival established in 2006 in the grounds of a Dorset stately home. "I went to a couple of smaller festivals and then I tried to go back to the big ones and I really didn't enjoy it," he explains. "So I set up something smaller and more intimate, with more attention to detail. At Glastonbury, for example, when it's muddy, you can't sit down anywhere. But we build wooden boxes all over the place so people can sit down if it does rain... Glastonbury still has a certain magic, but it seems every year they do something else to tarnish that."

"The BBC treat Glastonbury like a sporting event now," says Paul Stokes. "The coverage is so comprehensive that people can watch the festival at home on telly, then go to a different festival... Whatever attracts you to Glastonbury, there's a chance you could find it somewhere else."