Beatport CEO: We Were Here Before the EDM Bubble, We’ll Be Here After the EDM Bubble…

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When it comes to EDM, there are typically two different opinions: one says electronica is just a bubble, the other idolizes EDM as the new rock n’ roll.  Robert F.X. Sillerman, who’s investing hundreds of millions on this genre, waxes about a genre created by digital natives for digital natives with a long, long growth curve ahead.  Matthew Adell, CEO of the hyper-successful download boutique Beatport just acquired by SFX, isn’t so sure.

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In other words, who cares?  Beatport was making money – lots of money – before EDM became a fad, thanks to a hyper-dedicated, mostly niche crowd with niche tastes and needs.

Welcome to the bizarro world of Beatport, where fans gladly pay twice the price of songs on iTunes and like it.   And, this is a behavior that’s been happening for years: back in 2011, Beatport CEO Matthew Adell pointed Digital Music News to an average shopping cart total of $17, with DJs and independent labels the major beneficiaries.  “Instead of digging through wood crates and listening to vinyl, the average Beatport customer spends an hour per session scouring the site for the precise sounds they are looking for,” Adell said.

This time around, things have changed: Beatport is now part of Sillerman’s EDM conglomerate SFX Entertainment, thanks to a recent $50 million acquisition that made everyone rich.  But despite constant downward pressure on the price of recordings, Adell feels tracks on Beatport are still undervalued (and growing).  During a recent Reddit AMA (ie, ‘Ask Me Anything’) Adell showed little intention of adjusting prices, and every intention of sticking with the same business model.

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8 Responses

  1. GGG

    Well, people in theory have a lot to gain from these tracks/remixes etc that are probably incredibly hard to find on pirate sites. What percentage of people that buy these are doing so to just listen to at home? Most are buying them to have the best sets next time they go DJ, right?. People will pay when your reputation is at stake. It’s a completely different business than iTunes.

  2. PN NJ

    iTunes bit rates suck, and it’s particularly noticeable in electronic music. Beatport has a better catalog in this genre and higher quality digital downloads.

  3. @sahpreemking

    I think BeatPort offers a quality service with one-stop shopping for a host of EDM genres. As for being a fad on the downside of the bell curve, I would have to wholeheartedly disagree. As mentioned in the article, once the tourist and bandwagoneers move on, you will be left with a heap of hardcore EDM fans and DJ’s that will more than keep the revenue streams flowing like Niagara Falls. As far as EDM going the way of the dinosaur, the same could be said about Hip Hop music in the late eighties/early nineties. Hell, BeatPort has done for EDM, what Def Jam Recordings did for Hip Hop!

  4. EDM law

    People choose Beatport because it’s convenient and offers high quality. These tracks are just as easy to find on pirate sites but the quality fluctuates.

  5. mac the knife

    If Beatport continues to post charts by ‘DJs’ such as Paris Hilton, they won’t even last the EDM bubble. Think of it like this, for every serious wannabee DJ, every Paris Hilton chart is a step further away for them getting a chance to post a DJ chart on Beatport. And of course it makes everyone think if they want to be associated with a store that chases those who want to copy Paris Hilton’s finely-honed musical taste.

  6. hippydog

    Beat port is a good product and niche product.. So I dont see why they cant continue, even when things change..

    As to the bubble.. I think its gone to far to completely collapse..
    I’m see the pendulum starting to swing back to the ‘guitar centric rock N roll’ aspect of music, but unlike the last ‘swing’ I think EDM will stick around in some form.. so I have to agree with the pundits, I believe EDM has become its own genre..

  7. BPMstr

    I am reading a lot of nice ideas here, but let’s stay focused – the question raised by this article is, more or less, “Where is electronic dance music going?”. True – Beatport was here well before EDM became fashionable. Also true – Beatport is the major player in the DJ-driven, club-loved, festival-fueled (especially in the USA) dance music scene. But we must acknowledge that SFX didn’t pay 50 million for Beatport to capitalize on EDM. SFX is a public company that is in the business of making money for its investors, and it bought Beatport and made dozens of other huge investments (and continues buying – just look at the ID&T acquisition!) because it wanted a piece of the pie in the entertainment business – not because it believes that EDM is here to stay forever.

    Further, it needs to be understood that EDM as a concept in the entertainment business and EDM as a principle of music production are different notions, at least logistically. To start, the concept of a DJ-driven performance is not going away, ever, just like people will never stop partying: specifically, DJ gigs (such as Hardwell or Tiesto or Headhunterz) are different from artist-driven gigs (such as a U2 or a Lady Gaga performances) because (a) a DJ has greater stamina on stage than a band of musicians, (b) a DJ is more mobile, (c) a DJ has fewer mouths to feed during a performance, ensuring greater profit margins, (d) a DJ has better control over sound during a performance, (e) a DJ has more music (and more diverse music!) at his/her disposal at any given time, and (f) a DJ-producer can compose, record and release songs very quickly.

    So, if the principle of electronic music production over time becomes less popular as people get bored with computer-generated sounds and will grow hungry for the real strings and drums and woodwinds, the entertainment business invariably will go back a step and will remember why it is that a DJ-driven performance is potentially a more profitable venture, and thus the industry will find a way to refuel the DJ business. The key here is that small clubs are of no consequence for the industry – it is all about big events and the economies of scope and scale that they offer, in turn promising… the greatest return on investment!

    So, the only contingency/question is, who can be a better entertainer? And the answer is: anyone. It doesn’t have to be just DJs or just “EDM artists” or just hip-hop or just pop or jazz or rock performers that play live. Any artist can develop a loyal following quickly that can become an absolute revolution in the music scene overnight just because of a good song or a nice video or a new staging or event concept (i.e., “marketing strategy”). And the best thing is, because of EDM many more people can be good artists. And this in turn drives competition in the event industry through the roof. Look at me: I spent 10 years to learn to play piano and violin and bass and I produce dance music electronically, but there are hundreds of thousands of 15-year-olds that produce equally cool dance music but don’t play any musical instruments. So, at the end of the day, who cares if I can play an instrument? No one. People want cool visuals, cool ambiance, and cool tunes – no matter how these tunes were produced. In other words, the audience (at the stage and on and elsewhere) always wants one thing – fun. And that they will get – no matter what you want to call it today or tomorrow.

    And so, I laugh pretty hard when my two recent single releases Yeah-Ah-Ey (dubstep+electro) and We Are the Universe (hard NRG) have nearly 20 thousand listens on Soundcloud… but zero sales on Beatport. Why? Again, I must remind you: because as soon as music becomes a business it seizes to be a form of pure art – i.e., because making money in the music business is not about finding the best music and making it public – it is about taking above-average music and marketing it aggressively to maximize return on investment. It’s neither good nor bad – that’s just how it is. And this notion applies equally to Lady Gaga and to Headhunterz and to SFX and to Beatport and to everyone in-between in all industry segments, including myself (and I need a good press agent for sure!!).

    Consequently, the notion of “a bubble” in the entertainment industry that may supposedly lead to notably less interest in EDM is a superficial one. Big players like SFX will adapt their marketing strategies in order to make money for their investors, and in the process, Beatport too will adapt, and so will iTunes and everyone else. Has it occurred to anyone why Apple’s music platform doesn’t sell a lot of EDM tracks? It’s simple: they haven’t gotten around to it. To rephrase: it is just a matter of time before iTunes starts competing with Beatport. In other words (and this is for all of you who think that the above article was about Beatport’s pricing policies), I love Beatport and so do millions of others, but it too must adapt over time in order to survive… and SFX will make sure that this adaptation is both timely and effective.

    In summary, as much as I would love for the terms “EDM” and “Electronic Dance Music” to stick around forever, I am quite sure that they will not. So, don’t be blind or arrogant and understand this: music is about the icing, not about the perfection of acoustic combinations and best riffs…music is about writing above-average tunes and promoting “the hell” out of them. However, let’s face and accept one fact: the principles of producing music electronically are never going to become obsolete or useless – just like computers and mobile devices and gadgets are not about to become unfashionable because they are now an integral part of our existence.

    EDM cheers to all ~ Luke Kelvin

  8. soniquarium muzika

    My label has been a partner with Beatport before the bubble. My production and that of others on my label are purchased word wide and revenue is strong. I also sell on Itunes, which reache’s more of the “ZOMBIE” nation of sheeople who like POP music. Sales on Itunes have been increasing since the “BUBBLE”. However, my first choice and last choice for a target audience is on Beatport. I like Itunes also but once the Bubble burst and the Sheeople follow another “TREND”, my sales may drop. Who knows. But on BEATPORT, we know the target market is the correct marketing for EDM.