Coachella festival 3 reasons why the huge music festival was successful

Festival Coachella

Coachella, a huge festival, was held from April 12th to 14th and 19th to 21st, with 100 artists performing throughout the day and night. A vast festival venue of 440,000 square meters was set up in the desert area of ​​western California, and a total of 750,000 people attended, including many music industry figures and artists from Japan, including the presidents of Universal and Avex. Large festivals such as Coachella, which can attract many times the number of spectators than performances held at stadiums, are rapidly growing around the world.

In the United States alone, Austin City Limits in Austin, Texas, Electric Daisy Carnival in Las Vegas, and New Orleans Jazz Festival all draw 450,000 people. According to data platform Statista and others, the total sales of the festival business in 2023 will exceed $30 billion (approximately 4.6 trillion yen in Japanese yen), and will reach $85 billion (approximately 13.1 trillion yen) by 2030. ) Some say it will become a huge industry.

Three keys to a successful Coachella festival business

The keys to a successful Coachella festival can be summarized into three things: (1) the topicality of the artist lineup, (2) the environment of the outdoor venue, and (3) unique production. However, in order to achieve such success, a run-up period of at least 2 to 3 years is required, and success is only achieved by enduring losses, exploring unique characteristics, and enhancing the brand, so it will disappear in a few years. There are also many festivals.

Three reasons why the huge music festival “Coachella” was successful

The “Coachella Festival” originated in 1999 when Paul Toretto, who loved the environment of the Coachella Valley in California, planned a festival that would fuse modern art and music. Initially, it only attracted 25,000 people over two days. However, they were able to skillfully arrange artists and bring in a highly topical headliner (an artist who plays the leading role).

The venue was dotted with giant modern art objects and balloons, lit up at night, and the use of fireworks, drone art, and other displays to unify the night sky with the vast festival venue also became a hot topic. As a result, it gained overwhelming support from high-income young people in the Los Angeles area, a three- to four-hour drive away. It has been popular among customers who go to the site for a three-day weekend with a budget of 400,000 to 700,000 yen per person.

In addition, AEG, a major performance company, acquired the trademark and performance rights from festival founder Toretto, which enabled further investment in production costs and artist invitation costs, driving growth.

Diversifying and increasing the cost of revenue sources

Traditionally, the sources of income for festivals have been ticket prices, sales of goods and food sold at the venue, and sponsorship fees, but recently all kinds of services have been sold at high prices, contributing to profits. For example, tickets for the three-day Coachella weekend are sold for $499 (approximately 77,000 yen) for the general public and $1-2,000 (approximately 150,000-300,000 yen) for VIP tickets, but tickets from the parking lot to the venue The shuttle bus costs $140 (approximately 20,000 yen), and the fee to use the overnight tent provided at the campground is several thousand dollars for two people, and over $6,000 (approximately 920,000 yen) for four people.

Three reasons why the huge music festival “Coachella” was successful

The system is such that food and beverages and merchandise are intentionally prepared with high quality and high margins. Additionally, Coachella tickets are managed with wristbands containing electronic chips, and security checks are conducted in the entry area depending on the type of ticket.

Since customer data is managed electronically, sponsors can solicit activations and make e-commerce sales to ticket purchasers not only during the event but also after the event. The profits accumulated in this way amount to a huge amount. According to Billboard magazine, in 2017, when Lady Gaga and Radiohead headlined Coachella, the company made a profit of $117 million (approximately 18,158 million yen), making it the first No. 1 in the six-day box office.

It exceeded a billion dollars. With shows of this scale, the pay for headliners has skyrocketed, and it is not uncommon for artists to be offered $5 to $8 million (approximately 700 million to 1.2 billion yen) for an hour’s performance. Headliners take great pride in producing elaborate original shows that are commensurate with the pay they receive, which is why they attract attention from around the world through social media and YouTube distribution.

Performances by Asian artists

Three reasons why the huge music festival “Coachella” was successful

The number of Japanese artists appearing is also increasing, with X-Japan and Hikaru Utada appearing in the past, and this year YOASOBI appeared on the main stage. The presence of Japanese artists is increasing, with Hatsune Miku making a reappearance for the second time in 2020, and New School Leaders appearing on stage. In particular, K-Pop artists have an overwhelming advantage among Asian artists. Since the Korean three-man hip-hop group Epic High first appeared in 2016, it has boasted a large number of performers, including last year’s headliner BLACKPINK. K-pop girl group LE SSERAFIM and others performed this year as well, creating a buzz.

Will the festival business expand in Japan?

In Japan, there is a history of successful collaborations between well-known Western music artists and Japanese music artists, such as Fuji Rock Festival and Summer Sonic. Recently, Sony Music’s ticketing company E+ has invested in Fuji Rock, so with greater capital in hand, further investment in casting and venue development is expected. Additionally, in the field of EDM (electronic dance music), Avex brought the big festival ULTRA from Miami, USA to Japan, and has steadily gained a following. Music festivals can be positioned as an entertainment business with high growth potential.

Three reasons why the huge music festival “Coachella” was successful

Concerns include the skyrocketing cost of inviting Western music artists and the extremely limited number of locations where events can be held due to concerns about noise and traffic congestion. In any case, I have high hopes that a Japanese version of Coachella will emerge as the domestic entertainment industry plans a new revenue structure and considers Hokkaido and Okinawa as host locations.

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