The Great EDM War has Begun

Interesting article about the business side of EDM from EDMsnob:

 

"Letting the corporate world into EDM is like letting a thief take your house and then sell it back to you brick by brick. There, I said it.

By now, it’s no secret. The world of corporate music and concerts wants your house.

…And your trance, your dubstep, your electro, and your drum and bass, too. They want whatever you want, so that they can sell it back to you note-by-note and wobble-by-wobble.

Since our original expose about Insomniac’s Electric Daisy Carnival, I’ve spoken to a lot of people in the industry, and many others in the live EDM business have spoken out on their own publicly. Let’s recap on what I’ve learned.

There are two big factions in the live EDM business, and both of them are in a gold rush to acquire independent promoters and become bigger and more powerful than the other one.

The first is Live Nation Entertainment, which you may know as Ticketmaster, the service-charging powerhouse of the ticketing world. In the last year, they’ve acquired Creamfields and Hard Events, bringing on the respective leaders of those companies and building strategies to further increase their influence.

The second entity is what will eventually be known as SFX Entertainment, which includes Disco Donnie Presents. Originally I thought that this company had spun off from Insomniac’s touring events division entirely. What I now know is that Disco Donnie took back the approximately 20 local affiliate companies that he delivered to Insomniac around 2010, and sold that whole entity to Robert Sillerman and SFX Entertainment. Insomniac and Disco Donnie Presents are still partners on the massives (including Electric Daisy Carnival), so we’ll lump these companies together.

There’s been a lot of ridiculous PR-talk coming from these two companies, so let me make this perfectly clear: this is all about money. In honor of my economist marketing manager, let’s lay down a few economic lessons.

1. Decreased competition drives prices up. This one is easy. When you have fewer options, people can charge more. Buying competing companies is a down payment. You pay a good amount now to be able to charge a lot more later, because people don’t have alternatives. So all this talk about “We’ll be able to deliver better events because of the resources we have now” is total jive. Yeah, you’ll be able to deliver what people perceive as “better” events because you make it seem that way through your marketing, and then you can charge higher prices.
2. People don’t invest millions of dollars for fun. The people in the music business at the highest level are not in this for the love of the music. That might be a perk, but this is about making money. A lot of money. If these companies are investing $100 million into a company, it’s because they expect it make them $200 million. A lot of times, this money comes from financing arrangements with banks or investment capital firms. These are groups of rich white men that look for hungry businessmen that can make their money grow in exchange for the opportunity to run a powerful business.
3. The artist and the businessman do not get along.  I love it when I hear about how a music festival created an “experience” for the people there, like it’s some kind of gift that they worked day and night to give to you. Make no mistake, they’re charging you for that experience. You’re paying for every light, sound, and smell that you’re getting. There’s no place for “had a good time” or “beautiful” on a balance sheet. Corporations don’t care.

So what does this mean for you? It means, very simply, that these companies are selling themselves out, and they’re selling you out in the process. When people like James Barton of Creamfields, Gary Richards of Hard Events, and Disco Donnie say that they’ve sold their company to be able to “deliver bigger and better events to the fans”, that’s nonsense. If they don’t know that it’s nonsense, they’re delusional, and if they do know, then they’re liars. They have effectively sold their souls to the devil that is corporate music, and you will pay the price.

We’re already seeing the signs. Increasingly, EDM artists are being signed to what are known as “360 deals”, which are exactly what you would expect: record companies now get a slice of EVERYTHING that an artist profits from, where they only used to get a big slice of the music revenues. Music profits are disappearing. You simply can’t sell someone a song when they can get it for free. Live performances are now the big moneymaker.

Concert Production and live EDM promotion companies are starting to realize how important they are and swing that weight around. If you want to play at Ultra Music Festival, you have to sign a contract with a “radius clause”, where you agree to not play anywhere nearby for 90 days before or after their event.  Eventually, more big festivals will have this, and artists will be terrified to be left out of these massive events. So it will be virtually impossible to see your favorite artists outside of a big festival where you are paying hundreds of dollars alongside a hundred thousand other people.

These are the juicy profits that these two big companies want. As soon as they can get away with it, they’re going to start locking up popular artists, hyping them up even more, and then cashing in when they have the only way to see them.

I like to think I have a very complete and advanced marketing education, so let me sum it all up. This is bad for absolutely everyone except for a very small number of people that will become very rich. I laugh when I talk to a mid or low-level employee of one of these companies that has been bought by a big corporate venture. They really think that this is their ticket to the big time. These corporations will put together a list of people that work for the companies they buy, draw a line through the middle, and fire the bottom half. Then, they’ll assign those responsibilities to the people in the top half, or make them automated completely. I’ve met many people that thought they knew where the line was and which side they were on. They were wrong.

Luckily, it’s not too late. There are things you can do, but probably won’t. None of you will care enough or be brave enough to go against what you are told is the popular thing to do. I’ll give you a list anyway.

• Refuse to buy any tickets through a system with service fees. These are code words for “we can get away with it, so why not” fees. It’s pure profit.
• Demand to know how much an artist charges to perform before you go to see them. You’re paying for a ticket, why is it secret how much of that goes to the promoter and how much goes to the artist?
• Support independent shows. The more companies that have successful shows, the more competition there is in the market. That drives prices down.
• Make up your own damn mind about who has good music and who doesn’t. Don’t settle for what people tell you is good. That just means that artist has a better PR team. Go listen for yourself.
• SEND THIS ARTICLE TO YOUR FRIENDS. I don’t make any money no matter how many people read this. I care about saving my music from the claws of corporate greed. So get the word out.

Make no mistake; we’re in for a war. There are very powerful men that are trying to figure out how to turn the love of EDM into an ATM on their front lawn. Maybe this time will be different. Maybe this time, people won’t stand for being taken advantage of. EDM has always been about the idea that anyone can jump right in. But right now, there is a battle being fought over what used to be free, and you are the prize. I’m reminded of a line written by the poet To Huu during the Vietnam War:

“In the end, in any war, whoever won, the people always lost.”

Not on my watch."

-The Snob@EDMSnob