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coachella

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Today’s Trapital podcast episode is a breakdown on Coachella. I was joined by Tati Cirisano from MIDiA Research. We talked about the rise of the festival, how it has evolved, which artists get the most out of it, and why people still want more. Let’s dive in.

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Coachella’s rise

The origin story of Coachella is a screenplay waiting to happen. The first festival was announced a few days after the disaster of Woodstock ‘99 with just 60 days advance notice. That year, Coachella sold just 25,000 tickets at $50 each for the two-day event. It lost well over $1 million in 1999 and didn’t come back until 2001 thanks to a partnership with Goldenvoice, which organizes the event every year. Twenty-plus years later, Coachella has become a staple of American music culture.

The timing of the 1999 festival is remarkable. Imagine if a new cryptocurrency exchange platform launched the week after FTX collapsed. And then that platform became a marquee financial institution by 2035. That’s essentially what Coachella did.

Coachella has evolved from an alternative rock meetup to a mainstream pop ensemble. It has followed the common societal trend in the internet age: nerd culture became mainstream culture. This tracks with the rise in mainstream popularity of things like fantasy football, Comic-Con, video games, Formula 1, and even retail investing. (As someone who was in stock market clubs in the 90s, me "investing" in Oracle or Sony wasn't as cool as people investing in FAANG companies today).

But unlike other trends and even other festivals, Coachella developed a brand that can sell itself. This festival could sell out tickets before announcing a lineup if it wanted to. Fans want the vibes. Fans was the lifestyle. The influencers, fashion, and activations will be there regardless of who performs on stage. In the early 2010s, the festival became a who’s who for celebrity attendance. Attending was a flex, like sitting courtside at a Lakers game.

Meanwhile, most music festivals, especially newer ones, need strong lineups to sell tickets. Those festivals are vehicles to push products (the artists) to consumers. After a while, enough festivals can give the audience an idea of what to expect, like Rolling Loud, but it takes time to get there.

Listen to the full episode here or read below for more takeaways.

who gets the most out of it?

One of the upsides of festivals like Coachella is the ability to reach new fans. This is true at all festivals, but Coachella’s brand and guaranteed audience help ensure that artists will reach new people. It’s especially true this year since all six stages will be live-streamed on YouTube for the first time.

The downside though is that those people who attend may not fit the profile of the artist's fanbase. They may be less likely to become real fans. The influencers who are paid to attend the festival may be interested in the show itself. Festivals can be great for artists to get big checks and guarantees, but that upfront money avoids the long game selling hard tickets to an artist's most passionate fans. This is one reason why Curren$y explained in our podcast episode that he doesn’t like festivals and prefers his own shows.

Headlining the show is great for many superstar artists, but at the highest heights there’s a tradeoff. In recent years, the headliners get $4 million per weekend (but I heard from a source that Bad Bunny got $5 million). The artist on the second row got $750,000 per weekend. That’s a great payday, even for an artist selling out arenas. But for an artist like Taylor Swift, who can likely gross $10 million per night on her own stadium tour, then she may be leaving money on the table. This is where the Coachella documentary deals play a factor. Beyonce was rumored to be paid $20 million for the Homecoming documentary on her 2018 show, which made the experience worthwhile for her (and the Beyhive).

For other artists, Coachella is a brand-building signal to keep getting looks. Cardi B performed in 2018 and was paid just $70,000 per weekend. She spent more on her production, but she saw it as an investment. Cardi now gets paid $1 million for private shows regularly. She used a Coachella performance the same way a speaker uses a TEDx Talk. Sure, they weren’t paid. But that high-quality video lives on YouTube forever and will be the proof point to land more lucrative speaking and career opportunities.

the economics: do people want more?

On our podcast, Tati said that she wouldn’t be surprised if Coachella adds a third weekend. I agree. Music festivals, like any form of entertainment, are subject to the power law. Most fail, and even those that succeed aren’t at the same level as Coachella, Glastonbury, Lollapalooza, and others. People may say they want a variety of festivals, but what they really want is more of what they already know. Festivals are like IP franchises in that way. A third weekend could boost revenue by 50%. It may be tough to get artists and their teams to stick around Coachella Valley for another week, but at least it’s close to Los Angeles.

Before we close out, here are my predictions on the 2024 Coachella headliners. I’m picking Madonna, who will be back in tour mode), SZA, who has been one of the best commercial years of any artist, and Usher, given the popularity of his Vegas residency.In the rest of the episode, Tati and I went in more depth on:

• untapped opportunities for Coachella
• how the rise of concert ticket prices impacts Coachella
• festival lineups becoming homogenous

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money moves

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• why multi-hyphenates still need a core business​

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