INTERNATIONAL EXPANSION:Germany, Japan and Brazil

ELECTRONIC MUSIC BY THE NUMBERS

$6.2B

38%

68%

$4.2B

INSOMNIAC EVENTS: 22-YEAR HISTORY IN NEED OF INTERNATIONAL GROWTH

Founded in 1993 In 2013, Live Nation buys 50% stake… 33 countriesIn 2014.. Partnership with Interscope for Record Label

4 Countries 250 festivals

4M Attendees

:ECONOMIC IMPACT IN LAS VEGAS

MODERATE INTERNATIONAL SUBSTITUTES AND RIVALRY

No. of Festivals 88 Festivals

No. of Countries

19

Revenue $386.2 million

Festival attendance

2.9 million

No. of Festivals 47

No. of Countries

9

Revenue $200 million

Festival attendance

330,000

16%

SUPPLIERS: HIGH BARGAINING POWER

DJs are IN CONTROLDJ booking prices will keep rising… UNIQUE Flexible DJs… Unable to substitute… A USB STICK IS ALL THEY NEED

5 highest paid DJs… $175 million annually combined…11% increase

THE HEADLINERS: LOW BARGAINING POWER

Increasing attendance… 3.4 million in 2013

Always sold out… Before Line-Up

Low Price Sensitivity…Tickets from $399-$850…81% Increase

LOW THREAT OF NEW ENTRANTSStartup costs are outrageously high$400,000 to book a DJStaging costs are rising

* Higher expectations… Higher Production Costs

High barriers to entry

Company Analysis: McKinsey’s soft S

•Free-spirited•Boundless playground… Music, Adventure & ArtShared Values

• World-class special effects & performers• Internationally ranked DJsSkills• “Stay Healthy, Happy and Hydrated”• HYPER-SOCIAL… PLUR culture…Trendy BlogStaff

Style • MASSIVE Creativity… out of the box • Freedom of the mind and expression

COMPANY ANALYSIS: MCKINSEY’S HARD s

•Best Production Value… Sense of Belonging•Stages, Rides, Art, PerformersStrategy•Revolves around CUSTOMER EXPERIENCE•Immersive fan interactionStructure•Large-scale but detailed production •Precise and technical supply chainSystems

COUNTRY ANALYSIS: BRAZILA HUB OF CULTURE, TECHNOLOGY AND CREATIVITY

No. of Electronic Music Festivals: 5

REGION Latin America & Caribbean

INCOME CATEGORY

Upper middle income

POPULATION 200,361,925

GNI PER CAPITA (US$)

11,690

BRAZIL: POLITICAL FACTORS

GOVERNMENT Democratic Republic

FOREIGN INVESTMENT ENVIRONMENT • Open to and encourage foreign direct

investment• Fifth-most attractive country between 2012

and 2014• Largest FDI recipient in Latin America• Friendly environment for foreign investment• Government does not discriminate against

foreign investment THREAT • Corruption (43, 69/177)• Income gap is great

BRAZIL: ECONOMIC FACTORS

GDP $11,208.1 per capital in 2013 UNEMPLOYMENT 5.9%RATE

ECONOMIC Economic Freedom Index FREEDOM 56.6 (Most Unfree) BUSINESS Take around 84 day to start a REGULATIONS business at Brazil

BRAZIL: SOCIAL FACTORSEXPONENTIAL GROWTH

Electronic-music industry 2011 2013

Electronic Music Fans

19.5 million

27 million

REVENUE 1.13 billion

1.7 billion

• Upper Class Demographics

• End of 2014… Industry growth at 30%.

BRAZIL: STRONG TECHNOLOGICAL FACTORS

IT ranks 53rd in the world

Increase in Infrastructure Investment

89.2% online… 3rd Largest in Social Media

HIGH potential for Insomniac Events… To Create EDC Buzz

COUNTRY ANALYSIS: GERMANYEUROPE’S LARGEST MUSIC MARKET

No. of Electronic Music Festivals: 7

REGION OECD high income

INCOME CATEGORY High income

POPULATION 80,621,788

GNI PER CAPITA (US$)

46,100

CITY COVERED Berlin

GERMANY: POLITICAL FACTORS

Political Background:Democratic Republic

Largest Country in the EU

High Political and Freedom Rights Rating

GERMANY: ECONOMIC FACTORS

World’s Leading Producer of Solar and Wind Turbine Power

3rd Energy Importer in the World

GDP is $3.428 Trillion

In 2013...Germany Posted First Increase in Music Sales (1.2%)

GERMANY: SOCIAL FACTORS

Society… Molded by Variety of Lifestyles

Family… Most Important Social Factor

Culture… Music, Literature, Art and Sports

Music Industry Flourishing

Hosted Many Large Events…

Average Visitors per year: 26.9 million

GERMANY: TECHNOLOGICAL FACTORSVery Advanced Country...Emphasis on R&D

People are Advanced...High living standards

Recently Overtook U.K. to Become EU’s Largest Music Market

COUNTRY ANALYSIS: JAPANECCENTRIC, ELECTRIC AND ENERGIZING

No. of Electronic Music Festivals: 3

REGION OECD high income

INCOME CATEGORY High income

POPULATION 127,338,621

GNI PER CAPITA (US$)

46,140

CITY COVERED Tokyo, Osaka

A few purely EDM music festivals taking place in Japan 2015

JAPAN: POLITICAL FACTORS

Constitutional Monarchy

High stability and low

corruption

Strong Democratic Setupo Liberal Democratic Party (LDP)

An ideal political environment

Japan and its major cities of interest

JAPAN: ECONOMIC FACTORS

$100 Billion loss from

earthquake

3rd largest economy

High per capita GDP (PPP)

Ease of doing businessDistance on frontier score for Japan

A Business Friendly Environment



JAPAN: SOCIAL FACTORS

Spending habits on

experiences

Strong Club Culture

The importance of

festivals

Survey of Japanese consumers on preferences based on spending

A Change from Luxury Items to Luxury Experiences

JAPAN: TECHNOLOGICAL FACTORS

Very strong electronics industry

Leads the world in robotics

Advanced in automation &

LED/OLED manufacturing technologies

A few examples of technology seen at EDC

A Technology Powerhouse

COMPARISON SUMMARY BETWEEN COUNTRIES:

WHICH COUNTRY SHOULD YOU CHOOSE?Indices

International Transparency

Ease of Doing Business

29 14 120

Economic Freedom

73.3 #20 73.8 #16 56.6 #118

Competition LOW HIGH MODERATE

POPULATION>FESTIVALS: ASIA UNDER-PENETRATED1/6TH OF THE GLOBAL ELECTRONIC MUSIC MARKET

LDI 28

Capture market share… Compete with SFX and ULTRA

Expand Asia Fan Base ... Utilize resources...Spread EDM culture

Meet Global Demand Through International Expansion...

Summary: Insomniac Events should launch EDC in JAPAN