In August of this year, a report was published that attempted to quantify Electronic Dance Music’s contribution to the global music industry. The co-authored whitepaper by John D. Langdon and Jennifer C. Lai of Massive Enterprises helps us to comprehend the startling rate of growth we’ve seen in China this year. Before we dive in: Massive Enterprises doesn’t appear to have a track record to accompany its pseudo-academic rhetoric or salesey-speak. It’s a new set-up attempting to provide a one-stop shop of solutions for entering the electronic music market. Mr Langdon (Chairman & Founding Partner) has a background in private equity, but chose to forego the growth prospects, relative stability and collection of leather-bound books that came with his last job in exchange for a crack at the music industry. Sounds legit. We find the usual industry sources (IFPI mostly) intermingled with other in-house intelligence, which we expect you to take with a pinch of salt. With that said… Welcome to the “EDM Pangaea”. The Pangaea refers to a time when the Earth was composed of one supercontinent: “…illustrating the entire global music industry as one, all-encompassing, economic ecosystem, with electronic dance music as its unifying cultural core.” This statement is more flamboyant than a monkey with an embroidered neckerchief , but the argument that it’s now electronic music that’s driving serious growth in the global music industry – once coupled with figures – is actually fairly compelling. Perhaps. Key Insights of the report:
- The EDM market is a $15.0 to $20.0 billion global industry, with the major players in the global festival market achieving $4.5 billion in sales for 2012.
Comment: 25% tolerance there, not encouraging.
- [There’s been] a 17% increase in festival attendees at five top global festivals and an increase of 33%* in the total number of festivals thrown yearly worldwide.
Comment: Source for this stat is just an online festival fansite / aggregator.
- The attendance at 20 top global festivals evaluated by Massive Advisors increased from 1.9 million in 2009 to an estimated 3.4+ million for 2013.
Comment: That’s a big jump. If attendance numbers doubled, capacities naturally, must also have doubled – can this be verified? This is perhaps one of the most interesting points brought forward: The disparity between these data points is astounding -– the top 50 global EDM festivals in the market are almost two times larger than the traditional concert market. The industry trade is unconscious of it until recently…the concert tour industry’s leading, subscription-based trade publication Pollstar has not factored EDM into their work, reporting the top 50 grossing global concert tours in 2012 achieved only $3.4 billion in revenue, dropping 2.3% versus 2011’s $2.9 billion, with total attendance experiencing a 3-year compounded annual decline of 8.3%. Is it feasible that the bodies that compile the few information resources available on the music industry’s live sector bias their output according to their knowledge and appreciation of the impact of niche genres of music? And could the result be undervaluation? It’s an interesting argument. How do the demarcations between different genres and the selectivity of research agencies play into the number games that draw investment from outsiders? Massive Enterprises is pushing this apparent black-hole in industry reporting as its main selling point; the argument that there is “money floating around that isn’t being accounted for” is the hook. The whitepaper also comments on the growing remix culture that is arguably what makes or breaks a good single: …analysis of Spotify’s data illustrates that the number of remixes of IFPI Top 10 Global Singles tracks increased 74% in 2011, increasing from 437 remixes to 762 remixes, and 35% for 2012, increasing to 1,029 total remixes. Who did the analysis and how it came about we don’t know, but as a general trend it’s a sound observation (even though remix culture has been around for nearly half a century). And here is where China comes in… this is exactly the rhetoric that lies behind the deluge of events we’ve seen and whittled on about for months: Players in the EDM space are currently rushing to South America, Asia, and Africa, as the EDM tidal wave hits shores worldwide. These markets, as well as the mature markets, are experiencing profound growth with clear market opportunities and entry points – the EDM global gold rush. There is nothing to suggest this rushing is being prompted by actual demand from the Chinese side. It’s speculative foreigners and their assumptions of what the youth here want that’s stimulating growth. Sweeping statements and hyperbole need to be replaced with solid market research and strategic mid-long term initiatives that balance supply with demand. The first step is to get a representative office here, to put on a few small events, build the brand, and then bring the big guns. And by then you’ll know who the big guns are – in the eyes of Chinese music fans. Finally we have this chestnut: The EDM festival market is now the primary access point for all music, consolidating all genres of music under one global genre. Discuss! p.s. There’s a typo in the report where they refer to Gangnam Style as ‘Gangman Style’. Might make you chuckle. Get the Massive Advisors report here.