If I could solve the problems with a sentence or two I wouldn't be posting here but hiring myself out as a consultant! A few things do come to mind though --

This is the 21st century, the age of Digital TV, Youtube and iPods -- even my old mum uses an mp3 player, PVR and the internet. Audiences are more "sophisticated" and demanding so what worked in the 60s or 70s often seems dated or dull or boring.

One of the things Womad do is educate a potential audience through their promotional material so that those turning up feel as though they're already "in the know" and buy in to the cultural event they're attending. Professional events such as Opera, Ballet or Classical music are increasingly taking this approach as well to find a new audience.

Targeting events at a particular audience and combining events imaginatively as is done by smaller touring theatre groups could also be productive. I'd suggest that an evening featuring the traditional music, food and folklore of north-east England would be of far more interest to many people of that region than a generic "folk" evening.

Choice of venue should also be a consideration. If you want to draw in passers or those casually interested don't choose a hall or back room of a pub where anybody entering immediately gets all the old hands staring at the "new face".

There's no doubt that the word "Folk" has become devalued and covers a lot of evils. For those in the UK the M&S food adverts show how use of language can massively alter perception.

People have a far larger range of entertainment options than in the past so if you want an audience to come you've got to go and find them and give them a reason to be interested in what you offer.