The boutique music shop, label and gallery specialised in independent Illawarra and Australian performers and once hosted bi-monthly live music events on Saturday afternoons and the occasional evening performance for album launches and promotional shows.

However, following a noise complaint by a nearby business, they were told by Wollongong City Council they would need to submit a development application for a "Place of Public Entertainment".

Music Farmers co-owner Jeb Taylor said the costs and time involved in the application were unfeasible.

"The costs to get a DA approved weren't justified for what we were doing and we've decided to cancel all live music and wind down the shop at Christmas time," Mr Taylor said.

"The shop relied on being able to have Saturday afternoon shows to keep people coming in."

Music Farmer's closure follows the cancellation of this year's KemblaStock music festival. Established by Marty and Jenny Doyle in 1999, the all-ages outdoor music festival has been held annually at Mt Kembla Oval.

But the festival appears to have become a victim of its own popularity, with the crowd growing from just 200 at the inaugural festival, to almost 2000 in its later years.

The rise in attendance numbers was brought to the attention of Wollongong City Council, which told the Doyles they would now need to fill in a comprehensive development application, which included third party insurance, traffic management plans and security.

Mrs Doyle said they were unable to raise the insurance money.