Festival Coachella

Coachella, a major festival, took place from April 12th to 14th and 19th to 21st, featuring 100 artists who performed day and night. The festival was hosted on a vast 440,000 square meter venue in the desert region of western California, attracting a total of 750,000 attendees. This included numerous music industry executives and artists from Japan, such as the presidents of Universal and Avex. Large festivals like Coachella are increasingly popular globally, drawing far more spectators than typical stadium concerts.

In the United States, festivals such as Austin City Limits in Austin, Texas, Electric Daisy Carnival in Las Vegas, and the New Orleans Jazz Festival each attract around 450,000 attendees. According to the data platform Statista and other sources, the festival industry generated over $30 billion in total sales in 2023, which is approximately 4.6 trillion yen. Projections suggest that by 2030, this industry could grow to $85 billion, or about 13.1 trillion yen, indicating its potential to become a massive economic sector.

Three keys to a successful Coachella festival business

The keys to a successful Coachella festival can be summarized into three main factors: (1) the relevance and appeal of the artist lineup, (2) the ambiance of the outdoor venue, and (3) the uniqueness of the production. However, achieving this level of success typically requires a preparation period of at least 2 to 3 years. Success is achieved through enduring initial losses, developing unique features, and enhancing the brand. Despite these efforts, many festivals still disappear within a few years.

The “Coachella Festival” originated in 1999 when Paul Tollett, captivated by the scenery of California’s Coachella Valley, envisioned a festival that would blend modern art with music. Initially, it attracted only 25,000 attendees over two days. However, the organizers skillfully curated the artist lineup and secured a highly relevant headliner, which played a pivotal role in the festival’s growth.

The venue was adorned with giant modern art installations and balloons, which were illuminated at night, enhancing the festival’s atmosphere. The use of fireworks, drone art, and other spectacular displays also helped to integrate the vast festival space with the night sky, becoming a focal point of discussion. Consequently, Coachella garnered substantial support from affluent young adults in the Los Angeles area, located a three- to four-hour drive away. The festival has been especially popular among those who budget between 400,000 to 700,000 yen per person for a three-day weekend experience.

Additionally, AEG, a major entertainment company, acquired the trademark and performance rights from festival founder Paul Tollett. This acquisition allowed for further investment in production and artist invitation costs, which significantly contributed to the festival’s growth and development.

Diversifying and increasing the cost of revenue sources

Traditionally, the primary sources of revenue for festivals have been ticket sales, merchandise and food sold at the venue, and sponsorship fees. However, in recent years, various high-priced services have also contributed significantly to profits. For instance, tickets for the three-day Coachella weekend are priced at $499 (approximately 77,000 yen) for general admission and between $1,000 to $2,000 (approximately 150,000-300,000 yen) for VIP tickets. Additionally, shuttle bus services from the parking lot to the venue cost $140 (approximately 20,000 yen). The fee for using the overnight tents provided at the campground also varies, costing several thousand dollars for two people, and over $6,000 (approximately 920,000 yen) for a group of four.

The system at Coachella is designed so that food, beverages, and merchandise are intentionally of high quality with substantial profit margins. Additionally, entry to Coachella is managed through wristbands equipped with electronic chips, which streamline security checks at the entry areas according to the type of ticket held by attendees. This not only enhances security but also improves the overall festival experience by ensuring efficient entry management.

Since customer data is managed electronically, sponsors can engage in activations and conduct e-commerce sales to ticket purchasers not only during the event but also post-event. This strategy leads to substantial profits. For instance, according to Billboard magazine, in 2017—a year when Lady Gaga and Radiohead headlined Coachella—the festival earned a profit of $117 million (approximately 18.158 billion yen). This impressive revenue made it the top-grossing festival over its six-day duration, highlighting the financial success of integrating advanced technology and strategic sponsor partnerships.

The scale of events like Coachella has led to substantial earnings, often exceeding a billion dollars. Consequently, the compensation for headlining artists has soared, with offers typically ranging from $5 to $8 million (approximately 700 million to 1.2 billion yen) for an hour’s performance. These headliners take great pride in producing elaborate and original shows that justify their high pay. The captivating performances they deliver garner global attention through social media and YouTube broadcasts, further enhancing the festival’s prestige and reach.

Performances by Asian artists

The number of Japanese artists featured at Coachella has been increasing, with notable performances by X-Japan and Hikaru Utada in the past, and YOASOBI gracing the main stage this year. Hatsune Miku also made her second appearance in 2020, and the band New School Leaders took the stage, signifying a growing presence of Japanese artists at the festival.

Particularly, K-Pop artists have a distinct advantage among Asian performers. Since the Korean hip-hop trio Epik High made their debut in 2016, there has been a significant presence of Korean artists, including last year’s headliner, BLACKPINK. This year, the K-pop girl group LE SSERAFIM also performed, continuing to generate considerable excitement and draw international attention to the festival.

Will the festival business expand in Japan?

In Japan, collaborations between prominent Western and Japanese music artists have historically been successful, notably at events like the Fuji Rock Festival and Summer Sonic. Recently, Sony Music’s ticketing arm, E+, invested in Fuji Rock, providing it with greater financial resources for future enhancements in artist casting and venue development. Additionally, in the realm of EDM (Electronic Dance Music), Avex introduced the major festival ULTRA, originally from Miami, USA, to Japan, where it has steadily built a substantial following. Given these developments, music festivals are increasingly seen as an entertainment business with high growth potential in Japan.

Concerns about the rising costs of inviting Western music artists and the limited number of suitable venues due to noise and traffic concerns pose challenges for Japan’s music festival scene. Despite these issues, there is optimism for the emergence of a Japanese equivalent to Coachella. As the domestic entertainment industry strategizes new revenue models, potential host locations like Hokkaido and Okinawa are being considered, which could provide the necessary space and appeal to establish a major festival with international allure. This initiative reflects a proactive approach to expanding Japan’s cultural footprint on the global music festival map.

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