Paula Peyton
Mr. Reuter
Economics
25 April 2017
Coachella
Coachella 2017 is currently being held in Indio, California. It’s a music and arts festival that’s highly attended from people around the country, including many celebrities. Coachella consists of 2 different 3 day weekends, containing the current most popular performers. Musical heavyweights include Lady Gaga, Beyonce, and Kendrick Lamar. With large music festivals, come huge revenue for the city. Coachella has given a huge boost to the economy. Nearby hotels are in high demand and booked months ahead of the festival’s dates, giving profit to the hotel and economy from taxes. Consumers and businesses spend $704 million overall during the festival. It’s estimated that $403 million is spent in the city of Indio. $106 million is estimated to be injected into the economy. Just the cost of tickets brings in $3.18 million of profit, and that accounts for 5% of the city’s general fund. The cost of a 3 day pass in 2015 was $375, and in 2017 it’s now $400 for the same ticket package. The event is able to raise the price, because they know people will still buy them because it’s such a popular festival. Each day 99,000 people attend Coachella. Most spend their entire day there, so they are inclined to spend their money on food, beverages, and the various activities and booths set up.
Coachella invigorates the local economy in Indigo where 21% of the population is under the poverty threshold. Goldenvoice, a company based in LA, gives the city $5.01 for every pass sold to the festival. Businesses that support Coachella, such as food vendors, receive a positive externality from this music festival. So do businesses outside of the festival grounds, as they are going to be visited more from people going to and leaving the festival. Despite the total cost of tickets, hotels, flights, etc to attend this festival, I personally think it’s worth the opportunity cost. Coachella would be a vacation to California, a chance to meet new people, spend time with friends, and see all your favorite artists in one package.
Works Cited
"Coachella 2017: What Does It Really Cost to Attend? | Money." Time. Time. Web. 25 Apr. 2017.
"Coachella by the Numbers: A Breakdown of the Festival's $700-million Impact." Los Angeles Times. Los Angeles Times. Web. 25 Apr. 2017.
Seabrook, John. "The Mastermind Behind Coachella." The New Yorker. The New Yorker, 12 Apr. 2017. Web. 25 Apr. 2017.
As someone who endeavors to venture forth one day and attend Coachella, it is heartening to learn that a company pays the city a certain amount of money per every ticket package sold. However, it is displeasing to see that over one fifth of the city lives under the poverty threshold. That seems to be counter-intuitive, as the city draws so much revenue from the Coachella experience. However, Coachella is only once a year so the revenue it provides is really only a drop in the bucket, and what else would a desert city in California have to offer? That being said, it would still be an enjoyable experience to attend Coachella, even if the effects of poverty were as apparent as ever.
ReplyDeleteIt comes no surprise to me that Coachella ticket prices have been raised. Through social media especially, I believe Coachella is becoming increasingly popular as well as informing more and more people about what the event actually is. If you asked me a couple years ago what Coachella was, I would have no idea. However, now I am well aware of what it is due to it being a very popular event for celebrities as well as “internet famous” people to attend. Due to this increase in ticket prices, some people may have the idea that this event is moreso created for people with money instead of the average person, however this is not the case.
ReplyDeleteAfter reading this and Carson's comment, I have been forced to think about things that have never really been brought to mind like the idea of poverty despite the major increase in population and income at this time. It makes me wonder about other festivities like Coachella such as Summerfest. As public grounds, does some profits go to the city? And if so then how are we spending it?
ReplyDeleteIt is not very surprising that Coachella brings in so much revenue due to how popular it is. People from all over attend this festival, increasing the total revenue of vendors and nearby locations. I was unaware that Coachella pays the city some of the ticket money, but it positively impacts not only the city, but also the residents of that city, especially the ones living in poverty. Personally, I agree that the price of a ticket is worth it because of the experience one has there.
ReplyDeleteI do agree that Coachella has many positive externalities. As you mentioned in your blog post, the profit from Coachella in ticket sales, food and beverages, and activities not only supports the festival financially, but this revenue brings in even greater profit for Indio in California. In addition to profiting the economy through this festival, people get an emotional profit themselves when they come to the festival because they get to participate in fun activities and get see amazing concerts. Even though the price of Coachella and all the activities included seems outrageously expensive, this money brings in so much revenue for the event and the city, and there is a positive exernality to see the concerts, so the opportunity cost of a paying a very expensive price is definitely worth it.
ReplyDeleteI knew some information on Coachella before reading your post, but some facts surprised me. It makes sense that ticket prices are so expensive for a weekend pass, but I wouldn't expect that many people to go throwing away $400 on a festival. Going to see some amazing artists does have a large opportunity cost. In my opinion, I think Coachella is a once in a life time opportunity. I'm personally not going to go and spend that kind of money on one weekend. Which the festival ticket package doesn't even include the plane and hotel expenses. Some people are highly dedicated to their favorite artists and festivals, but it does come at a high price tag.
ReplyDeleteI thought I knew a lot about Coachella before reading this, but this brings in a lot of positives that I didn't know about. It is a really good thing that the festival is doing to a town that is struck with poverty, and even better that they donate some of the money to help bring the city's economy into better shape. Not only does it do this, but the amount of jobs needed for this event must also help people get work, and get some source of income. The only negative is that this is only the two weekends a year, leaving the rest of the year back to the regular low income town. It is great to see how many positive things Coachella is doing for the economy other than just enjoyment for consumers, but could there be more they could do for the economy?
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ReplyDeleteCoachella is a very profitable festival. I wasn't surprised to see that the ticket prices increased because it is such a popular festival. It would have been helpful to see the basic tickets and the different prices in the ticket packages. It's also very nice that the city gets money out of it as well because of the extra consumers but that would probably help the city with the hotels making more money. The vendors could have been a whole topic by themselves they have several vendors and all make a probably very profitable amount of money. One of the vendors this year had expensive donuts covered in edible gold. I think it's great that there is an event like Coachella to boost the local economy.
ReplyDeleteIt does not surprise me to hear about the rise in ticket prices throughout the past few years at Coachella. With this being such a popular music festival where millions attend, including celebrities, in order to increase their profit, they must increase the ticket price. Even though there was an increase in the cost, when you can pay a certain price to see your favorite artists, see them all potentially in one day, the expensive ticket is worth it and Coachella definitely uses this to their advantage. One part of Coachella that I did not know about was the fact that the festival gives back $5.01 from each ticket sold to the city itself to help their poverty levels. Even though that sounds like such a small amount, when millions of tickets are sold, this will definitely help the city in the near future.
ReplyDeleteI did not know that the tickets were 500$ for a three day weekend at Coachella. But even though they have been raised, many people are still willing to pay this price. Celebrities advertise every year on their instagrams which makes young adults go to Coachella and pay the high prices of the tickets. The festival itself makes a lot of money, but also the town it is in as you mentioned. But there is also a negative externality for the people living in Indio but are not attending the festival. These people might get disturbed by the loud noises of the festival. The price of the tickets is worth it, because it is a lot of fun and the paying that price is worth the experience. The event overall has an great impact on the economy.
ReplyDeleteAfter reading your post I am not surprised with how much revenue this festival brings in. Although, I am surprised that just the tickets themselves take up 5% of the cities general fund. That is a large portion of the fund for just one small part of the festival. I expect that in years to come though that this percentage will continue to increase as the popularity of Coachella has been increasing and every year more and more people are willing to spend hundreds of dollars to attend the festival for a weekend.
ReplyDeleteI did not know that so many people went to Coachella, I guess since it's in a different state I didn't realize it was such a big thing. But it also doesn't surprise me that Coachella brings in so much money not only for the event but for the Indio and California it's self. But I would agree with you about how this event is worth the opportunity cost because for how much you're paying you're getting a lot out of it too.
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DeleteI believe coachella is becoming more popular every year as many popular celebrities continue to go. I think coachella is a once in a life time opportunity and even though it is a lot of money, it's probably worth it. I agree that Coachella does bring in a lot of revenue due to how popular it is.
ReplyDeleteI knew that Coachella was really expensive to put on, however, I didn’t know that consumers and businesses spend over $704 million. I also didn’t know that 99,000 people went to Coachella each year. That is a crazy amount of people, however it is a good place to experience good music, food and different variations of the arts. It is also a good way for performers to get their name out there even more because it is such a popular event. Also it is a good way to meet some celebrities for free. Because so many famous people attend the concerts as regular people and the people who attend the concerts also get to meet and interact with them. I do agree with you that it would be worth the opportunity cost because there’s so many opportunities to meet new people and get an experience of a lifetime.
ReplyDeleteI think it's cool that such a big festival is held where 21% of the city's population is under the poverty threshold. I've always wanted to go to Coachella but the ticket prices are too much for me and it's so far away. This made me think of how Summer Fest affects the economy in Milwaukee.
ReplyDeleteIt's not a surprise that this music festival is so profitable and I think that it is a really good idea that this is held in a city with a high poverty levels. This festival can be compared to summer-fest. I think it would be very interesting to see how the economy is doing before and after Coachella as well as the break down of where the profits are going.
ReplyDeleteIt's great to see that an event as large as Coachella give back to the city that they are held in, especially when the local economy has such a high poverty rate. Coachella does much more than just provide money for the city from their ticket sales, though. Coachella just occurring in the city invigorates the city's people, causing them to spend more which circulates money through the economy, a large amount of which is spent at local businesses. Coachella does much more for a city's economy than I would have initially expected.
ReplyDeleteI didn’t know much about Coachella before reading your post but I am surprised that nearly a hundred thousand people are willing to pay the $400 ticket prices. Maybe if the total cost of spending a weekend there was $400, it would be worth the price, but with added expenses like hotel fees and food, it seems too high. It’s undoubtedly a benefit for the city and local companies though, so if people are willing to pay the high prices, it’s well worth it.
ReplyDeleteFirst and foremost it comes as no shock that the ticket package has been raised, with every year drawing in more people , an increased amount of activities and performers, it is easily a $400 option for festival attendees. In terms of the city of Indio, I would agree in the aspect that it does a fair amount to boost the cities economy, and neighboring cities when you take into account hotels and other necessities when attending. Coachella does a very good job drawing in large amounts of people, and each year they only increase this rate. In addition, another positive externality is that if Indio or even california in general hosts the event, it will do a tremendous effort in boosting their economy overall, and draw more investing powers towards these cities such as Indio, and possibly help create jobs and a stronger economy for those living in the poverty threshold over time. Coachella is without a doubt a strong and economically empowering event that enlightens all options for growth in each economic division.
ReplyDeleteIt's not a surprise Coachella makes so much money. It being one of the biggest music festivals in the world, and with such high class performers people for sure feel it's worth the opportunity cost with the expenses of going. Not only this, but tons of celebrities attend the event as well, making it all the more high class. I would have to totally agree and say if this is an event totally worth the price of it. It's truly a vacation to a music celebration, party, and chance to meet new people and celebrities all in one.
ReplyDeleteHearing about all of the affects on the economy from Coachella makes me wonder what kind of affects Summerfest held in Milwaukee every year has on our economy, especially because Sumemrfest is the world's largest music festival and people from all over the country and world like to attend this event. I don't see why the tickets needs to be so expensive, I also do not agree that tickets need to be this expensive considering you don't guaranteed seats at the concerts held at the festival.
ReplyDeleteI've always known Coachella was a popular festival, but I never knew how much it truly impacted the economy. It's nice that profit is given to the city as it is held where 21% of the citizens earn an income below the poverty threshold. The economic impact of Coachella makes me wonder how much Summerfest impacts the city of Milwaukee.
ReplyDeleteI can see how Coachella is big enough to help boost the economy, having a big attraction like that will bring a lot of people to the area which will help with hotels, restaurants, as well as the businesses that get supported through the festival. If it's anything like summerfest, it probably has a lot of stands for certain businesses and restaurants inside the festival which, I'm sure, will help them out a lot with their revenue and boost business. I see coachella on a lot of celebrities that attend, which also brings popularity to the area. Overall, I agree that coachella boosts the economy in Indigo.
ReplyDeleteThe festival has become so big that reality stars, music icons, and models find their way to Coachella despite their "busy" schedules. This also introduces a new way to advertise and brand the festival, allowing them to bump up prices and create more profit. This is probably why they added 900 dollar VIP passes to their purchasing options so high profile people looking to listen to music feel like they are separated from the average person.
ReplyDeleteThis is a really good economic that most people don't really think about or realize it is happening around them. there are so many star performing all over the place and some travel all over the world an people pay tons of money so see live music of all kinds. It's awesome that they have this in a poor area because a lot of the money goes to the town or county or even the state. This kind of event is a win win, the people get what they want and it bennifits them down the road to. And the stars that are performing are changing live and making people happy.
ReplyDeleteAnother thing to consider is the amount of money spent on clothing. From what I know, people like to buy new, and outgoing outfits to wear at the festival. They buy a lot of jewelry, bikinis, scarfs, shorts, crop tops etc. That means retail stores will be receive lots of benefit from Coachella.
ReplyDeleteA main contribution to the festival is due to the celebrity attendance. Kendall Jenner, Gigi Hadid, and a vast amount of other famous names go to the festival which makes it more enticing. In addition to that, this even is significant for the fashion industry in terms of keeping up with the trends. Many fashion designers will attend this event to see some of the iconic models and their style so they get updated on the upcoming summer trends.
ReplyDeleteI wonder if there a reason that Coachella was held in a place with such a high percent of the population below the poverty threshold. On a related note Coachella reminds me a bit of Camp Flog Gnaw which is hosted by Odd Future. It’s held somewhere in the heart of LA. The carnival consists of rides, games and music. I never thought of how much money it could bring to surrounding businesses. I’m not 100% sure on the ticket cost or where it exactly is or if it’s ever in different locations.
ReplyDeleteA huge part of Coachella is contributed to celebrity attendance. Since huge artists always perform, it is no secret that many celebrities attend the music festival, and host VIP parties. Also, many famous fashion youtubers attend the event, and many spend hundreds of dollars trying to achieve the perfect "Coachella wardrobe." Many people go to the festival and take tons of pictures and videos just to receive praise and jealousy from their friends. The festival seems like a lot of fun, but it also seems extremely crowded and overwhelming, not to mention the fact that it probably taken hours to get back to the hotel since everyone wants to leave around the same time once the concerts are over. Overall, I really enjoy that you chose this as your topic and analyzed the economics of the event, it's a very interesting and relevant topic.
ReplyDeleteIt's amazing how the festival is held where 21% of the city's population is under the poverty threshold. many people want to go to coachella but the tickets are too expensive, I wonder how summer fest will adapt to this.
ReplyDeleteCoachella is everywhere on social media, so as I began to read the article, it came to my mind, "Does it help the economy?". First off, I did not find it shocking that the price of tickets increase as there is such a new demand every year for that specific weekend. With all the famous people they bring in, and if more want to enter: then Coachella can raise their prices if more people will buy at that higher price. I do agree that with all if can offer, it is worth the purchase for the consumers. One question that came to my mind as I finished reading is how destroyed is the land? If may be a positive externality to businesses, however to the land it's a negative externality.
ReplyDeleteI think it is very interesting to look at how different music festivals affect the cities they are in. I read a few things about cochella this year and from what I read not much has changed. They still have the same food and art and other attractions, even some of the same performers come, so it is interesting to see that people still pay to go every year even if it is not improving or changing.
ReplyDeleteFor me personally I don't think this opportunity coast is worth it. Since it's so expensive to go and everything is overbooked. Its not worth the time and money to go. But it is a good thing for the cities since they get the revenue boost but Its not worth it to spend all the money and go.
ReplyDeleteIt's not surprising that despite an inflation of the price of 3-day wristbands, Coachella still managed to completely sell out both weekends within a matter of days of the initial onsale date. Coachella is one of the largest musical festivals in the nation and recieves so much publicity/media coverage from celebrities, so I highly doubt they'd ever lose ticket sales even if they continue raising the price of wristbands.
ReplyDeleteI knew that Coachella brought lots of revenue to the area it is located but I didn't know it was this much. Although this is new information, it's not very surprising. From the time that the line up is released to the day it ends, Coachella is talked about. I've heard more about it the last couple years than ever before. Although there are celebrities performing lots of celebrities attend too which makes coachella a bigger attraction because people love to see their idols and favorite celebrities in person.
ReplyDeleteI find it really cool how Coachella is taking place in a city with such a high poverty rate. Obviously this is really rare since many concerts or big social events are in huge, well-known cities. The amount of revenue that the city/local businesses receive during these weekends is staggering, so it's nice to see the economy in this area improving. I also think it was smart to increase the price to $400/package. Considering the opportunity costs, those attending the event will most likely be willing to pay the extra $25 to go. But with 99,000 people attending the event at an extra $25/person, that's a huge increase in revenue!
ReplyDeleteCoachella seems like it really helps the economy. I feel like Coachella has become a super iconic festival, especially because it’s in California. Coachella does for Indigo what Summerfest does for Milwaukee. During that time, the cities’ economies are boosted because people buy tickets, food, transportation, hotels, etc. Not only does Coachella poor money into the economy for the time it is open, but it also may help businesses too for the long run. If certain businesses in the area get Coachella goers, then those who return or those who remember are more likely to go back to those businesses.
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ReplyDeleteWhile Cochella definitely sounds like a great time to spend with friends, while also listening to some of the most popular musicians of the year, the continued growth in ticket prices may eventually cause less people to buy them. Tickets already increased within the last year, so to imagine how much they will have increased by in 5 years is insane. Some people will still continue to go and not worry about the price, but eventually this will cause them to lose consumers. But for those living in poverty is good to see that this positively affects them and will help them.
In many store around the country there is a Coachella line of clothing and accessories. When the festival comes around every year stores know that people from all around will be traveling to the event from all over and if they can buy their much needed trendy outfits from home then that's one less thing to worry about. So, even stores across the country are profiting from the event. Especially because of the high demand for certain trends for the festival. People feel the need they have to go out and buy all new outfits just for this event.
ReplyDeleteIt's always nice to see when music festival that may be criticized by certain people in our society ends up making decent money. How can you argue with numbers like cochella ticket sales topping over 3 million in ticket sales alone. Also you must realize that ticket sales are not the only source of income for musical festivals, you must also factor in the number of tourist who come and spend their money in hotels, food, and other things.
ReplyDeleteCoachella essentially has "free" advertising as it continues to gain more and more attention through social media and celebrities who attend. You mentioned that they were able to increase the ticket prices because people are still willing to pay the price to attend this event. I would be interested to see if/how much local businesses (like hotels) would raise their prices in response to the increased population brought in by this event. I also thought how it was cool how this event occurs in a relatively poor town versus a very well-known city (like Milwaukee and Summerfest) and that part of the profits went directly to the city.
ReplyDeleteI am not at all surprised by the total revenue Coachella brings in every year. It is a very popular event itself, but what contributes to the popularity is the celebrity attendance which makes the festival that much more exciting. This also helps the fashion industry as many look for the perfect Coachella outfit, or to keep up with trends. The one thing I found interesting was that a company pays the festival a certain amount of money per ticket packet meanwhile they give $5.01 back to the city for every ticket. This is a huge positive externality for Coachella and only attracts more people which ultimately makes experience worth the ticket price.
ReplyDeleteI absolutely didn't know what Coachella was until I was a freshmen. This festival is for sure a boost for California economy. Various companies from different industries would initiate themselves to sponsor for this festival because they know that they are going to end up in profit, and would never get them to a loss. Also, several entrepreneurs or fashion designers would try to enter this event in order to introduce new products and ideas. The uniqueness attracts consumers and celebrities from all over the country, which in turn improves the California's economy and gives a chance for the business to invest and raise prices.
ReplyDeleteI am happy to find this post Very useful for me, as it contains lot of information. thanks
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