Coachella Ticket Purchasing Frenzy: Installment Payments Gain Popularity
As the globally renowned Coachella Music Festival approaches, many attendees have already secured their tickets through a “buy now, pay later” method. According to a report by Billboard, approximately 60% of general ticket purchasers this year opted for the installment payment plan offered by Coachella. This service is particularly appealing to younger audiences and has become a significant source of revenue for the organizers.
A Small Service Fee Creates Millions in Revenue
Attendees using the installment plan must pay a $41 activation fee. Although this fee seems negligible compared to ticket prices (with general three-day passes starting at $499, excluding additional fees), it is projected that with around 100,000 participants, this service fee alone will generate over $4 million in revenue for the organizers and ticketing companies.
Start Your Dream for Just $19.99
The installment payment method at Coachella allows fans to secure tickets for as low as $19.99, with the remaining balance to be paid over the following months. Typically, payments are completed within three months from the announcement of the lineup in January until the festival begins. This “early bird reservation” strategy aligns perfectly with the spending habits of the younger generation.
Coachella Installment vs Traditional BNPL: What’s the Difference?
While various BNPL (Buy Now, Pay Later) services like Klarna and Affirm are prevalent in the market, Coachella’s model significantly differs from these platforms.
BNPL usually allows consumers to obtain a product or service first and then make periodic payments, often without service fees. However, Coachella’s payment plan requires participants to complete their payments before the event starts. If a payment is missed, there is a 10-day grace period to make up the payment; otherwise, the order will be canceled, although organizers will provide a credit for next year’s event.
How BNPL Differs from Credit Cards: 6 Key Differences
While both “Buy Now, Pay Later (BNPL)” and “credit cards” seem to allow for “enjoying now and paying later,” there are significant differences in application thresholds, interest rate structures, and credit impacts:
- Application Thresholds and Approval Methods
BNPL: Generally lower thresholds, no credit check, and no credit history requirement.
Credit Cards: Requires bank approval, including credit score, income, and job stability. - Payment Structure
BNPL: Commonly fixed installments (3, 6, 12 months), sometimes offers 0% interest.
Credit Cards: Can be paid in full or minimum payment with high-interest revolving credit. - Interest and Fees
BNPL: Markets itself as “0% interest,” but may charge penalties or service fees for late payments.
Credit Cards: If not paid in full, revolving interest often exceeds 10%, and annual or installment fees may apply. - Credit Impact
BNPL: Some platforms do not report credit history, while some do. Long-term use may help build credit.
Credit Cards: Will affect credit records, and timely repayment is beneficial for credit scores. - Usage Flexibility
BNPL: Mostly available in e-commerce or specific platforms, requiring selection of installment options in advance.
Credit Cards: Usable in almost all spending scenarios, allowing for post-purchase installment options or promotional installment activities. - Spending Risks
BNPL: Low thresholds may lead to underestimating total expenses, resulting in overspending.
Credit Cards: If mismanaged, revolving interest can quickly accumulate into substantial debt.
Summary Table:
| Item | BNPL (Buy Now, Pay Later) | Credit Card |
|---|---|---|
| Application Threshold | Low | Medium to High |
| Interest/Fees | Commonly 0% interest, possible penalties | High interest if not paid in full |
| Installment Method | Fixed number of periods (e.g., 3, 6 months) | Can be installment or convert to revolving credit |
| Credit Impact | Depends on the platform | Will affect credit records |
| Usage Flexibility | Limited to specific channels | Highly flexible |
| Spending Risk | Easy to overlook total amount | Long-term interest burden possible |
From 18% to 60%, Coachella Installment Plan Gains Popularity
Reflecting on Coachella’s introduction of installment payments in 2009, only 18% of attendees utilized this feature; now, the proportion has grown to over 60%. Despite this, organizers may face strong competition from free BNPL services in the future. Ben Danner, a senior credit analyst at Javelin Strategy & Research, stated: “When BNPL offers 0% interest and no service fee options, it is likely to replace installment plans that require upfront fees. This is especially true for events like Coachella, which attract a younger audience that is more receptive to BNPL.”
Not Just Coachella: Global Music Festivals Adopt Installment Payments
Coachella is not the only major music festival employing a BNPL-like strategy. The Bonnaroo Music Festival in Tennessee, USA, also allows attendees to pay in installments but requires a 50% down payment on ticket prices. The UK’s Bloodstock heavy metal festival offers a six-installment plan, with each installment costing £33.18.
From the West Coast of the U.S. to the English countryside, installment payments for festival tickets seem to have become the new norm. For organizers, this not only makes tickets more affordable for more people but also secures revenue in the presale phase, making it a win-win model for the future.
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