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Executive Summary

Overview Coachella Valley Music and Arts Festival is a three-day music festival that takes place every April in Indio Valley, California at Empire Polo Field. It is known as the premiere music festival in North America and, according to Billboard, it is “semi-arguably the most successful festival in the world.” Coachella was founded in 1999 under the direction and vision of Paul Tollett, president of Goldenvoice—Los Angeles’ prominent ticket promoter—and the late Rick Van Santen. Since its inception, Coachella has continued to grow in size and popularity. The festival sold out in advance and expanded to three days for the first time in 2007. In 2012, Coachella expanded to two weekends in order to accommodate everyone who wanted to go. Coachella 2013 will again take place again over two consecutive weekends—April 12-14 and April 19-21—and advance tickets have already sold out. With so many festivals available to the consumer, my group and me were curious why Coachella stood out amongst them. What made it a prime concert destination? And if Goldenvoice added more shows to Indio Valley/Empire Polo Field (as they have been discussing), would Coachella be able to survive or would it saturate the festival market and become less desirable? Hypothesis I believe that if Goldenvoice adds more festivals to Indio Valley/Empire Polo Field it would reach a saturation point and Coachella would lose some of its appeal. My entire group shared this hypothesis. Methodology In order to prove/disprove our hypothesis, my group decided to examine six audience segments that affect the festival. My particular audience segment was “Goldenvoice and AEG.” The breakdown of the other audience segments we analyzed is below. For more information on these segments, please see my respective group members’ individual reports.

• Record Labels and Artists – T-Aira Sims • Residents – Kelsey Collins • Tourism and Hospitality – Marlise Knechtle • Festival Goers – Julie Tong • Bloggers – Julie Brigati

It should be noted that after completing some basic research, Julie Brigati realized that “Bloggers” was not a substantial audience segment. Because of this, she conduced a competitive analysis of competing music festivals instead.

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We decided that every group member would: conduct secondary research, interview two to five people, and conduct a content analysis for their audience segment. A couple months into the project we concluded that our hypothesis was irrelevant and that we needed to find a new way to analyze Coachella. We decided conduct a SWOT (strengths, weaknesses, opportunities, threats) marketing analysis instead. Secondary Research As a group we each conducted secondary research on our respective audience segments. I compiled my key articles from:

• Los Angeles Times

• USA Today • LA Weekly • The Desert Sun

• Hollywood Reporter

• NBCLA.com • Goldenvoice.com • Billboard.com

• IE Weekly • U-T San Diego • OC Weekly

Interviews Every member of our group interviewed between two and four people from their respective audience segment, either in person or over the Internet. I interviewed Bruce Fessier, reporter, The Desert Sun and Gary Tovar, founder, Goldenvoice. Competitive Analysis Julie Brigati conducted a competitive analysis with competing festivals. She looked at Coachella, Outside Lands, Bonnaroo, Lollapalooza, Austin City Limits, Sasquatch, and Treasure Island. See her individual report for findings. Content Analysis and SWOT Analysis Utilizing our respective secondary research, we each conducted our own content analysis. We compiled all of our content analyses findings into one chart. This chart, along with our interviews and competitive analysis, allowed us to conduct a comprehensive SWOT Analysis. As a whole, our group analyzed one hundred and twenty-four articles (not including Julie Brigati’s). I looked at twenty-three articles. Findings Secondary Research

• Paul Tollett, president of Goldenvoice, co-founded Coachella in 1991 • AEG purchased Goldenvoice in 2001 • Three day music and arts festival with diverse musical genres

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• In 1999, 25,000 people attended Coachella, generating about $1.3 million • In 2012, 85,000 people attended Coachella, generating about $27 million • Coachella continues to expand its brand (two weekends, S.S. Coachella Cruise,

possibly adding more shows in Indio) • Competes with numerous music festivals, like Lollapalooza and Sasquatch

Interviews Key findings from my personal interviews are below:

• Coachella is a perennial, it will stand the test of time • The key to Coachella is its set and setting • Coachella’s problem isn’t saturation, it’s accommodating all the fans • In the festival market, only the strong survive • Coachella has such a strong brand that it will continue to be successful

Content Analysis and SWOT Analysis Overall, both my group and I found that Coachella’s strengths and weaknesses outweighed its weakness and threats. SWOT breakdown for all audience segments:

• Strengths: 64% • Weaknesses: 3% • Opportunities: 5% • Threats: 28%

(**See Research Report for additional findings) Conclusion Based on the information revealed in my findings I can conclude that my initial hypothesis is irrelevant. This is because it is impossible to define a saturation point and because every audience segment is definitive and has unique ‘saturation points.’ However, the irrelevancy of my hypothesis led my group and I to conduct a SWOT (strengths, weaknesses, opportunities, threats) marketing analysis of Coachella. This analysis revealed that Coachella has more strengths and opportunities than threats and weaknesses. From my personal research and interviews I can conclude that most people who know about, and are involved with, Coachella and Goldenvoice/AEG are extremely passionate about the festival and are optimistic about the opportunities it has for growth. My research also showed me that if Goldenvoice decides to bring more shows to Indio Valley that they would not affect Coachella. Due to the strength of Coachella’s brand, the festival’s set and setting, and Goldenvoice’s attentiveness, I can conclude that the festival it will continue to be successful and will be known perennial.

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Key Findings

Hypothesis Overall, my group found that our initial hypothesis, “If Goldenvoice adds more festivals to Indio Valley/Empire Polo Field it would reach a saturation point and Coachella would lose some of its appeal,” was irrelevant. This is because all of our segmented audiences were so distinctive and had a unique saturation point—none of which were definitive or comparable. Some of the questions that arose when we were trying to define a saturation point were:

• How many shows would need to be added to the area to make it saturated? • What kind of shows would be added? All music festivals? Food festivals? • If music festivals were added, would they represent different genres? • How larger would the shows need to be? • At what point would Coachella become undesirable? • How do you measure lack of interest? Ticket sales? Ticket prices? Blog

coverage? • How can you compare how someone who lives in Indio feels about saturation to

someone who only goes to the area a few times a year? My audience, Goldenvoice/AEG, did not have a definable saturation point. This is because, thus far, they have been extremely successful with expanding Coachella and because it is impossible to tell if adding more shows to Indio Valley/Empire Polo Field in the future would affect their business negatively. Although our hypothesis was irrelevant, we knew that all of our audience segments—Goldenvoice and AEG, Record Labels and Artists, Residents, Tourism and Hospitality, and Festival Goes—were critical to the success of Coachella and needed to be included in our report. It was not until Professor Kjerstin Thorson came into our class in late October that we figured out how we were going to achieve this. After we told Professor Thorson about the complications we were facing with our hypothesis, she suggested that throw it away and change our approach by conducting a marketing analysis of Coachella. After discussing the discussion as a group, we all decided that a SWOT analysis was the most effective way for us to synthesize our research. I completely agreed with this approach after realizing that our audience research was not germane by itself and that a SWOT analysis was the most effective, logical way to tie all of our data together. Furthermore, I came to understand, like the rest of my group, that it was more telling to unveil Coachella’s overall strengths, weaknesses, threats, and opportunities than struggling to define a so-called ‘saturation point.’ Secondary Research At the onset of the project, I researched the history and breadth of Goldenvoice and AEG. However, I quickly realized that this information was not relevant to our overall

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project. It was not until I interviewed Bruce Fessier that my research became more focused. See “Interview” section for more information. Similar to the rest of my group, my secondary research served as the building blocks for my report. My key findings are below. It should be noted that some of these findings were not included in my group’s report because, overall, they were not seen as key takeaway.

• Gary Tovar founded Goldenvoice in 1981, company focused on punk scene • Goldenvoice is named after a type of marijuana • Tovar was sentenced to seven years in federal prison for marijuana trafficking in

1992 • Tovar sold Goldenvoice to Tollett and Rick Van Santen when he was sentenced • Tovar vowed to not go back to the business when he got out of jail • Tollett learned “everything” from Tovar, especially how he built shows • Goldenvoice took a $800,000 hit in 1999 no festival in 2000 • AEG purchased Goldenvoice for about $7-million-dollars in 2001 • AEG initially co-promoted Coachella bought Coachella in 2004 • AEG and Tollett each own fifty percent of the festival • 2010 festival was seen as a “clusterfuck” too many bodies • Goldenvoice helped fund an extra land to Avenue 50 in 2011 • Two weekends was birthed out of a supply-and-demand issue • The fact that both weekends boded the same lineup in 2012 made Coachella’s

expansion extremely unorthodox • Goldenvoice’s decision to purchase 280 acres of land surrounding stages in

March 2012 was applauded by local politicos and music mavens • Indio Mayer Glenn Miller wants Goldenvoice to work with Empire Polo Club and

Eldorado Polo Club to promote more concerts • People think of Coachella as a destination festival • Goldenvoice doesn’t need to stage multiple blockbusters to recoup its investment • There is some grief from neighboring communities about Coachella • Coachella was threatened by a ticket ax initiative in 2012 (was not passed) • Coachella offers 12-step meetings for artists and bodes a backstage “village” • Brand expanded with “S.S. Coachella” cruise—sets sail for the Bahamas and

Jamaica in December 2012 • Tollett build a festival that sells on brand alone • Festival starts “once you hit the windmills”

Interviews Although I do not know the specifics of my fellow group members’ interviews, as I never read their transcripts, I know that all of us uncovered personalized and pertinent information in our interviews. I think that my two interviews were especially telling because they highlighted Coachella’s strengths and opportunities more than any other aspect of my secondary research or content analysis. Furthermore, one of my group’s two conclusions, that Coachella is a perennial, was extracted from my interview with Gary Tovar.

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I first learned of Bruce Fessier by reading numerous of his articles about Coachella online. Some of these articles, such as “Coachella festival gets its acts together,” can be found in Appendix B. It is clear from his articles and his blog (http://bruce.blogs.mydesert.com/) that Bruce is incredibly knowledgeable about Coachella and its relationship to Goldenvoice and AEG. His large knowledge base and articulate, detailed articles are what encouraged me to contact him for an interview. Doing so was simple, as he lists both his email address and phone number on his blog. On October 11, 2012, I pitched Bruce via email from my University of Southern California (USC) email address. My pitch is below.

Hello Bruce, Coachella--its growing and thriving like never before. But, how much can it grow before it over saturates the market? That is what my research team is trying to find out, and we need your help and your valuable insight. My name is Shelby Moran and I am studying Public Relations and Music Industry at the University of Southern California's Annenberg School for Communication and Journalism. I am currently investigating the saturation rate of Coachella and other festivals hosted by Goldenvoice in Indio as part of my Strategic Public Relations Research, Analysis and Insights class. Would you be available to answer a few short questions about Coachella over email? The interview questions should take no longer than 10-15 minutes to complete. Please let me know if I can count on your participation in the interview. I will be following up with you about this on Monday, October 15th. You can reach me at this email address. All the best, Shelby Moran

Fortunately enough, I heard back from Bruce within a few hours. After a couple emails back and forth, Bruce responded with the answers to all of my questions on October 16, 2012. See Appendix 1A for the interview transcript. See Graphic 1 for key takeaways from the interview. Bruce’s interview have rise to the rest of my research because his comments made me realize that:

• I had been focusing on the wrong things for my research—I didn’t need to research Goldenvoice and AEG as a whole, but rather, their decisions pertaining to Coachella and how these decisions affected the festival

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• Finding a ‘saturation point’ was irrelevant and impossible to define • It is important to understand Coachella’s brand • Saturation is not Coachella’s problem, accommodating fans is

After interviewing Bruce I was able to refocus my research on the following questions:

• Why have Goldenvoice and Coachella grown over the years? • How have Goldenvoice and Coachella grown since their inception? • To what extent is AEG involved with Coachella? • What inspired Goldenvoice to found Coachella? • What has Goldenvoice done to make Coachella successful? • What sets Goldenvoice apart from other promoters? Coachella from other

festivals? • How has Goldenvoice addressed Coachella’s growth? • What plans does Goldenvoice have for the future, especially in terms of

Coachella? The way I found and contacted my second interviewee, Gary Tovar, was very unconventional—especially in comparison to how I reached out to Bruce. Gary’s name had popped up in a handful of the articles I had looked at about Coachella and Goldenvoice. After learning that Gary founded Goldenvoice and currently serves as a consultant for Coachella I decided to reach out to him. Although I could not find Gary’s email or phone number online I was able to find both his Tumblr and Facebook. I decided to send him a message on Tumblr—I knew that doing so was a shot in the dark, especially since my Tumblr account has been inactive for alm ost a year, but my options for interviews were running out and I knew that I had to try. The pitch I sent him was almost identical to the one that I sent Bruce. On October 24, I received a call from an unknown number. Although I do not usually answer calls from unknown numbers, I did that afternoon. It took me a couple seconds to realize that I was talking to Gary Tovar. It was immediately apparent that he was passionate about music, telling me how he attended upwards of 270 shows a year. After a few minutes of small talk, Gary asked me if I wanted to see The Melvins perform that evening at Hollywood Forever Cemetery (he had an extra ticket) and told me that we could do the interview there. Although I was unable to attend the show, I agreed to meet him that night before the concert at Will Call to conduct the interview. The interview lasted approximately thirteen minutes and provided me with a new, personal and passionate view of Coachella. The two things that Gary told me that stuck with me were that the key to Coachella is its “set and setting” (where Coachella is located and the state of mind you are in when you are there) and that the festival is a “perennial…it will stand the test of time.” See below for comparisons and takeaways from my two interviews.

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Graphic 1: Key Findings and Takeaways from Interviews Competitive Analysis See Julie Brigati’s individual report for a competitive analysis of the festivals below:

• Coachella • Outside Lands • Bonnaroo • Lollapalooza • Austin City Limits • Sasquatch • Treasure Island

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Content Analysis and SWOT Analysis In order to compile and synthesize all of our information, my group created a chart that listed a handful of themes under each SWOT category, twenty themes total. The themes we chose embody our most important findings as a group. Although not all of the themes listed were applicable to everyone’s research, all of us used this chart when conducting our individual content analyses. Once we each did our respective content analysis, we compiled all of our findings and placed them in a singular chart. Our group analyzed one hundred and twenty-four articles total (not including Julie Brigati’s). I analyzed twenty-three articles total. The majority of my articles contained multiple mentions from the same themes. I chose to count each singular mention—giving me a total of seventy-seven unique mentions. See Appendix 1B for my personal Content Analysis chart.

Graphic 2: Breakdown of Articles per Audience for Content Analysis Through our combined SWOT analysis, my group found that Coachella’s strengths and opportunities outweigh its threats and weaknesses. I drew the same conclusion for my SWOT analysis of Goldenvoice/AEG. This can be seen on the next page.

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Graphic 2: Personal SWOT Breakdown

Graphic 3: Group SWOT Breakdown

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Conclusion Although my initial hypothesis is irrelevant I can conclude that if Goldenvoice brings more shows to Indio Valley they would not affect Coachella because they would target different audiences and be at another time during the year. From both my findings and my group’s I can also conclude that Coachella has more strengths and opportunities than threats and weaknesses. Furthermore, my individual research demonstrated that most people who know about, and are involved with, Coachella and Goldenvoice/AEG are extremely passionate about the festival and are optimistic about the opportunities it has for growth. Due to the strength of Coachella’s brand, the festival’s set and setting, and Goldenvoice’s attentiveness to Indio residents, fans, and artists, I can conclude that Coachella will continue to be successful destination festival and will be known perennial. Coachella is here to stay.

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APPENDICES

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Interview #1: Bruce Fessier, The Desert Sun

• Why do you think Coachella has become such an iconic festival? What continues to attract people--fans and artists--to it?

• Do you know why Goldenvoice decided to partner with AEG for Coachella? How has this partnership affected the festival?

• What do you think about Goldenvoice increasing the number of festivals at Indio Polo Field? How do you think increasing the number of festivals will affect Coachella?

• Where do you see Coachella going in the next five years? • At what point do you think Coachella will saturate the market? What would

make it do so? 1) Why do you think Coachella has become such an iconic festival? What continues to attract people--fans and artists--to it?

Coachella became iconic because it was the first festival promoted with an understanding of the concept of niche marketing. Co-founder Paul Tollett of Goldenvoice understood that radio and television had become media of lowest common denominator programming in their attempts to reach the largest possible mass audience. That meant a lot of great music was not getting played on commercial radio. Tollett booked the best of those bands that were being ignored, and a few headliners that had come up through the alternative ranks of indie rock, hip-hop and electronic dance music, and he attracted enough followers from those niche tribes to create one massive audience per weekend. When the Internet became a more efficient tool for young people to find great music than radio and MTV, Coachella became the flagship for a new generation that has continued to remain relevant by its mix of great music and use of a unique concert environment.

2) Do you know why Goldenvoice decided to partner with AEG for Coachella? How has this partnership affected the festival?

Coachella lost a lot of money its first year. It partnered with AEG Live to be able to afford good headline acts at future festivals and expand.

3) What do you think about Goldenvoice increasing the number of festivals at Indio Polo Field? How do you think increasing the number of festivals will affect Coachella?

There are no immediate plans to increase the number of festivals at the Empire Polo Club in Indio. Goldenvoice booked the Big Four concert in 2011 and a Phish festival in 2009. But that was before Coachella expanded to two weekends. I

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don’t think we’ll see more festivals or concerts at the polo club in the spring. However, both the city of Indio and the owner of the Empire Polo Club would like Goldenvoice to produce more festivals to generate more revenue for each of them. Goldenvoice had to address all possibilities for growth in an environmental impact report covering the next 18 years. Goldenvoice has produced several fall concerts at the Indian Wells Tennis Gardens, so I wouldn’t be surprised to see more big fall festivals, such as the Phish fest, when opportunities arise. But any annual festivals are likely be smaller and they probably won’t feature the same kind of music as Coachella. The parties involved have talked about a blues and jazz festival, with a little bit of roots rock, and they’ve talked about a Latino festival. So they really won’t impact Coachella at all.

4) Where do you see Coachella going in the next five years?

Coachella will continue to book big reunion acts, such as Dr. Dre and Snoop Dogg, when the opportunities arise and they’ll try to nurture future headline acts by placing them in smaller stages at Coachella and seeing how audiences react. Tollett doesn’t believe he discovers great new acts, he believes audiences discover great new acts and he pays attention to audiences. I think we’ll continue to see more EDM acts since the popularity of that genre is growing, but Coachella will always try to mix it up and Tollett and the owner of the Empire Polo Club will always try to make the venue more interesting to make it the perfect canvas for Tollett’s programming artistry.

5) At what point do you think Coachella will saturate the market? What would make it do so?

I don’t see Coachella saturating the market. Goldenvoice’s environmental impact report projects only minor increases in attendance in the next 18 years and it is trying to buy more land to combat overcrowding. It considered and apparently rejected the opportunity to move to another location in the Coachella Valley that would have given Goldenvoice more room to attract more people. The cities of Indio and Coachella need to build more hotels to take advantage of the festivals so people won’t have to drive all the way from Palm Springs or Banning to attend Coachella. So saturation isn’t the problem. Accommodating fans in ways that won’t force them to clog the roads to Coachella is the challenge and Goldenvoice is trying to find alternatives to commuter cars. It’s interesting that festivals throughout America have fared better than individual concerts during the recent recession. They’re also doing better than the recording industry and radio. People discover new acts at festivals now. Many festivals have faltered or folded and part of that is because music fans have so many more choices of destination festivals than they’ve ever had before. In that sense, the festival industry may be reaching saturation. But it’s like when you

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have four similar stores in the same mall. The stores with the weakest products will falter. Coachella is now such a strong brand, it’s growing beyond the Coachella Valley with its S.S. Coachella cruise from Florida. There are Coachella lines of clothing and there will be other products bearing the name of Coachella because that name can’t be trademarked. I don’t see Coachella saturating the festival market. It’s stimulated more festivals, but only the strong will survive. Coachella will survive and flourish as long as the individuals at the top of its company continue to be innovative and attentive to great artists appealing to niche audiences.

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Interview #2: Gary Tovar, Goldenvoice Founder

• What capacity do you work with Coachella? • Why do you think Coachella has become such an iconic festival? What

continues to attract people--fans and artists--to Coachella? • To what extent have you thought about increasing the number of festivals at

Indio Polo Field? A different type of festival? How do you think increasing the number of festivals will affect Coachella?

• At what point do you think Coachella will saturate the market? What would make it do so?

• Where do you see Coachella going in the next five years? • Why did Tollett found and produce Coachella in the first place?

1) What capacity do you work with Coachella?

Now, I am an overseer of Coachella. I go to a lot of shows (over 270 a year) and suggest bands to Paul [Tollett] regularly.

2) Why do you think Coachella has become such an iconic festival? What continues to attract people--fans and artists--to Coachella?

I think the setting of Coachella is what has made it iconic. The grass! The grass! I mean, its on Polo Field…surrounded with palm trees and a stunning background. The company [Goldenvoice] just makes is all so nice! It’s set and setting. A set is mindset. Setting is where you’re at. The set is just so good there and the setting is so good….it’s the combination. You get out there and there are so many parties. Nice parties. You get out there and see that some people just go to Coachella to party. They hardly even go to Coachella! The key Is the camping too. You wake up and you’re there. You’re at Coachella. You never leave. All these other places you go to a concert, like Lollapooloza, you leave and come back the next day. Coachella…you never leave if you’re camping. You’re there. You wake up in the middle of the night and you’re in the middle of Coachella. And the campground is going off! Everything…the campground, the amenities…it’s just a great feeling there. Coachella is going to be a perennial. It’s going to stand the test of time.

3) To what extent has Paul and Goldenvoice thought about increasing the number of festivals at Indio Polo Field? A different type of festival? How do you think increasing the number of festivals will affect Coachella?

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The company really needs to think things out. All these things are thought out with everything in mind—the fans, the community, etc.

4) At what point do you think Coachella will over saturate the market? What would make it do so?

It won’t saturate the market. Last year, they [Goldenvoice] sold out two Coachella’s …they could have sold out five! I hope they do something in October, which would be exactly six months out from Coachella. Instead of trying to beat the heat, like you are in April, you would be trying to outlast the heat and hope it cools down. The festivals would be six months apart and wouldn’t really affect each other. I mean, think about it. Would you rather party once a year or twice a year? I think it would be fabulous.

5) Where do you see Coachella going in the next five years?

I think that it’s all in the bands. New and upcoming band are going to bubble up like a spring—there is just going to be a wealth of bands worth paying attention to. This talent is going to make Coachella an even stronger festival than it is already.

6) Why did Tollett found and produce Coachella in the first place?

Paul wanted something of his own. We never had any buildings in the old days…we rented buildings whenever we could. Paul wanted something for himself outside—something beyond the rented buildings. He wanted something that he could have full creative control over—to put it all together.

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Appendix 1B: Content Analysis

TOTAL ARTICLES: 23 TOTAL MENTIONS: 77

S.W.O.T. Content Analysis: Goldenvoice/AEG Category Theme Mentions Total

s Branding 3

Location/Setting 3 Increasing infrastructure in Indio/Tourism 12

Goldenvoice is innovative/attentive 20 Far away from Los Angeles 5

Artist exposure 5 Media has invested interest 1

Safety and community relations 4

Strengths

International reputation 4

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Not enough hotels/places to stay 2 Pay for artists is not substantial

Weaknesses

Artists have nothing to do during the week in between festivals

2

Add another festival 6 months out Opportunities Additional festivals would reach new

audiences/genres 8

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Industry may reach saturation point soon Too corporate 2

Becoming mainstream Competition

Traffic/inconvenience 7

Threats

Indio hosts lots of events 1

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