Resnikoff’s Parting Shot: What Coachella Is Telling Us

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Which way are the economic winds blowing?

The data points are cloudy and conflicting, and depending on the analyst, the world is either headed towards double-digit gains or a double-dip recession.  These are choppy waters, and many are still treading.

But at Coachella this year, reality seemed to take a back seat.  The event was almost cancelled, according to organizer Paul Tollett, based on serious economic concerns.  Yet Coachella 2010 sold out, and on the expansive Empire Polo Grounds in Indio, this was a full-bodied affair.  Swarms of fans moved like oceanic currents from stage to stage, and outside the venue, traffic spread its idling tentacles into off-ramps and parking lots.

People were partying and soaking in the sun and sound.  But make no mistake, this was a rather extravagant endeavor.  The three-day-only passes hovered around $300, just one part of a tab that included travel, lodging (camping or otherwise), food, and parking expenses.  And these costs were being paid by roughly 75,000 attendees.

The price was hardly a buzzkill, at least for those inside.  Throughout, the enthusiasm for both established and newer acts was feverish.  Everyone seemed pumped, and the upbeat mood extended to big sponsors like Heineken and State Farm, both of whom hosted DJ-focused tents.

Coachella has even forged a long-term lease on the Grounds, a parcel almost chopped into cookie-cutter housing lots.  So what is all of this telling the industry?

In the here-and-now 2010, this seems like a great indicator for both festivals and the broader concert sector.  Undoubtedly, a lot of festival-goers were forced to scrape, but they chose Coachella over a myriad of other entertainment options.  They had the cash, and they spent it on live music.

Not so fast?  The question is whether that outlay cramps other concert-related expenditures, or if it is part of a broader increase.  Coachella itself is a phenomenon of its own, and its signatures can be found in everything.  The unique elements include palm trees set against snowy mountains, a remote desert locale, and celebrity and hipster appeal.  Indeed, Coachella had its ‘moment’ this year, and the ingredients of an elite festival are finally getting baked.

Perhaps the skies rain on those that can bottle something irreplaceably unique.  Just moments ago, SXSW (if it can be categorized as a festival) was reporting record attendance, and anyone on-the-ground can testify to the power of down-home authenticity.

Looks like there’s enough to go around, but another issue creeps in.  Simple economics tells event organizers to charge the highest price per ticket to maximize profits.  Makes sense, especially in a sold-out scenario.  But the broader problem is that concerts are now a luxury good, and most budgets can only accommodate a few blockbuster events.  That is the hangover of high-priced success, whether the $300-plus goes to Coachella or the Eagles.

But beyond the concert-focused discussion, a very positive development is getting reaffirmed.  Consumers have more entertainment options than ever before in history, and many of those options are inexpensive.  But outside of the griping about file-swapping and freemium excess, events like Coachella underscore that a huge appetite for music exists.

Suddenly, the half-baked file-sharing retort, ‘but I go to the show,’ means something.  Sure, file-sharing often means less money for artists, despite the theoretical rhetoric otherwise.  But at Coachella, these fans are going to the show, in record numbers and at record ticket costs.

And, maybe – though hard to prove – a lot more are going because of lubricated discovery channels online.  That puts things like ‘three-strikes’ into perspective, and suggests that modern-day appetites simply need to be monetized and approached differently.  Fans want music, and lots of it, even if they never purchase a recording in their lives.

Paul Resnikoff, Publisher.