Coachella 2011: The Day the Concert Industry Sold Out

Posted by | April 18, 2011 | 20,688 views

Let’s get this straight. This year’s Coachella sold out six days after going on sale in mid-January. To put it in perspective, while shopping for a reasonable flight and trying to line up accommodations somewhere in the Desert Cities, you easily could have come back to round out your advance purchases only to find no official way into the event.

You may think to yourself, “Certainly, Goldenvoice is  just trying to get an early take on demand, especially for camping facilities around the event (new to recent Coachella editions).” You may say to yourself, “They’ll likely release more passes closer to the date, as has been the case in past years.” Then, when it turns out the event really did sell out in six days, you may ask yourself, “Well… how did I get here?”  I guess when it comes to the desert’s “new rules”, make sure your horse can drink before leading him to water.*

The Coachella Valley Music and Arts Festival is, for many, their favorite music festival… at least in North America. For me, not so much. I’ve never NOT enjoyed a Coachella visit, always met great people at every event, and it’s been a wild ride seeing it grow and evolve over the years. But there are other festivals I find more appealing, and Coachella does leave some things to be desired every year.

I’ve attended six of the twelve years of Coachella since 2004′s Pixies vs. Radiohead double bill, and each of these visits to the area have put up some definite highlight moments for me. I’m certain there will be more to come, which can be shared separately from the point to be made here. However, the 2011 edition and it’s “all-in” 3-day high security and full-on packaging has had some full-on clusterfuck moments. To see the news story from last night of an attendee getting mugged at knifepoint of his or her wristband is a clear indication of what Coachella has become: literally a BIG TICKET ITEM, except without the tickets.

Unfortunately, it seems the best of intentions is the main culprit, but I’m pretty sure good ol’ buddies Greed and Control are taking some of the blame too. It’s a standard narrative, well described earlier this week by Paul Tollett, “the festival’s architect and head of Goldenvoice”. Obviously, Tollett and company want to make money from staging the event, as they should. But they also have to limit their liability and exposure to forces that cut into the financial or perceived value of the event, e.g. the overcrowding that brings down the overall experience, as does the insane traffic congestion that raises larger questions about Southern California car culture. And of course there’s the ongoing issue of doubling down on over priced scalper tickets that may or may not be legit.

Sci-fi dystopia notwithstanding, the move towards a sophisticated RFID-enabled wristband makes sense. There’s better control of direct access to the event, so as to manage the crowd size spikes that would happen depending on the headlining acts in what’s become a three-day event. There’s a sneaky grab of consumer surplus in some cases as well, that is, grabbing up the bigger spenders who don’t really care about the price point of paying $300 for single day $130 face value ticket or a $350 3-day pass that they’ll only be using for one of the three days. People will pay, especially so close to Los Angeles. Witness accounts of roadside scalpers this year have been scarce. And the pretty packaging of the fold-out wristband box may be angling to be the new album sleeve of an digital music age. The question is whether this is the way of the future for the concert industry?

There have been unintended consequences…

Less than two weeks prior to the event, there was increasing concern of wristbands packages not having been shipped out with enough lead time. This left many overseas travelers worried about a shipped package arriving at their door after they’d already left for California. In the meantime, printed tickets (which didn’t exist) and fake wristbands were being offered on message boards and craigslist pages at ridiculous markups.

Meanwhile, actual ticket brokers such as StubHub rarely offered a 3-day pass for anything other than $500 and up. Also consider anyone actually finding pair of real wristband packages for sale through a 3rd party individual seller via a message board or Craigslist. Such a buyer would be packing around at least $1000 to make a transaction. That would be cash-in-hand, with no guarantees of authenticity in return. Or, consider even more notorious schemes going on with dodgy scalpers bringing in friends to conveniently “take care” of that $1000… as nearly happened to my wife, who was set to buy a craiglisted wristband from a “Michele” only for Michele to insist that her “brother” make the transaction on “her” behalf. It was a scam. Again, the news of a knifepoint wristband robbery last night is less and less surprising when the wristband itself becomes a highly visible “all-in” value proposition.

Naturally, there are tradeoffs to the scalping issues of these new “BIG TICKET” wristbands. First hand reports of Friday nights show had traffic still being a pain, however, getting through the gate, and the redesigned festival space, has been far less of a hassle than in previous years. The added on-site camping options were also likely to be a key and necessary reason for the use of wristbands to ease up on some of the hassles of getting through the gate. Those taking the shuttle buses (finally being offered!) seem to be converts of skipping parking traffic. Yet after dealing with 2004′s traffic I thought In-n-Out Burger would have quickly signed on as shuttle sponsors for 2005. Hasn’t happened yet, but I’m not ruling it out.

As much as the high-tech wristbands may have been helpful to the Coachella event organizers in these areas, there’s been one significant area where their intended benefit has backfired. Namely, the dubious policy of “No passes will be sold at the venue. Period.” Here’s the problem with this approach. First off all, there’s immediate confusion with this statement: Does it mean there are not going to be tickets available at the time of the event? Or is it just that the box office has moved off of the venue grounds, where it had been in previous years.

More importantly, while trying to curtail past problems with scalpers, the policy has put those looking to make a killing on reselling their wristbands in complete negotiating power. Let’s take an example…

Let’s say I missed out on the six-day window to buy wristbands when they were initially released. In the past, I could normally wait out an expected release of additional tickets, or even take my chances that some tickets would be available at the gate if I were to get there early enough.  Now I may be much more interested in having tickets in hand prior to making any travel plans for such an event, and therefore might be inclined to pay a premium for what are hopefully legit versions from a scalper or ticket broker. But if I’m negotiating a price with a scalper or broker, my best alternative to a negotiated agreement is to not go to Coachella at all. Why? Because it is well advertised that no passes will be sold at the venue. Both parties will likely know this information in advance.

So at the very least, the authoritative “No passes will be sold at the venue” notice and quick six-day sellout has put some doubt in buyers’ heads about the later availability of legitimate wristbands. This statement by Goldenvoice results in bargaining power going directly to wristband holders looking to exploit wannabe attendees. Wannabe attendees become actual purchasers when they’re willing to pay higher prices (perhaps so as not to lose out on prepaid travel expenses), and who are also willing to take on the risk of the wristband being a fraud.

Again, these are BIG TICKET ITEMS we’re dealing with now, that is, 3-day passes selling for $500 a pop on secondary markets, and a fair bit of coin to put at risk. Who knows… we may start seeing consumer action on “Concert Default Swaps” and “Collateralized Wristband Obligations”. Everything’s on the table, and then Vegas might see a role to play and get in on the action, doing what it does best (or worst). Or, alternately, maybe ticket prices start moving in the same way as the housing market has recently. Has the concert bubble burst yet?

The point here for such negotiating scenarios, as a buyer, is that I can’t balk at a scalper’s price and say, “no, that’s too rich for me. I’ll take my chances at the box office”. That option has effectively been removed by Goldenvoice. This gives the wristband seller complete negotiating advantage, driving up the prices in secondary markets, and increasing the attractiveness of the wristband market for more sophisticated scams. It might take more time and effort for the scalper to pull it off, but the payoff is much greater and less risky than trying to unload a Sunday night ticket at face value at the event itself.

NET RESULT: I’m sure there are some smiling scalpers in this new system who are now quite happy to take the weekend off instead of standing all day in the desert heat. As for me, apparently the promoters can’t confirm a press pass that was requested over a month ago. That’s okay, I’ll just go buy one at the… oh wait… that’s right: “No passes will be sold at the venue. Period.”

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Posted by on Apr 18 2011. Filed under featured, Live Industry. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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