First published on www.forbes.com
We have certainly seen the increasing positive impact of live events on the music business for some time, from Lollapalooza to Bonaroo to SWSX to The Wiggles (for those of a slightly less hip persuasion). But the explosion of EDM (Electronic Dance Music) is particularly fascinating.
For the uninitiated, EDM is heavily percussion-based, electronic music directed by DJs in live venues ranging from nightclubs to soccer stadiums world-wide. What you get at an EDM event is a huge swell of passion, energy, and intense music (I’ll leave aside the variety of drug consumption). But beyond the DJs you aren’t paying for live performers. Think of Madison Square Garden filled with people just listening to Springsteen music without Springsteen and the E Street Band being present and you begin to get an idea of the genius of the business model here. The recent annual report from the International Music Festival now pegs EDM as a $6 billion per year market, and more than two-thirds of this comes from festivals and clubs. And the link to digital music purchases is powerful. According to figures from Billboard and Nielsen SoundScan, EDM was the only category of digital music in the US to grow in digital track sales in 2013.*