Robert F.X. Sillerman sees opportunity in Electric Dance Music Robert F.X. Sillerman sees opportunity in Electric Dance Music
The man who brought you Live Nation is hoping that dance music and its promoters will fit into the same tried-and-true business model. Media... Robert F.X. Sillerman sees opportunity in Electric Dance Music

The man who brought you Live Nation is hoping that dance music and its promoters will fit into the same tried-and-true business model.

Media savant Robert F.X. Sillerman transformed the concert music scene in the 1990’s by gathering numerous rival local music promoters under his umbrella company, SFX Entertainment. Sillerman realized great financial success with this model, selling the company to Clear Channel Communications in 2000 for a total of $4.4 billion. Clear Channel subsequently spun off the concern, and Live Nation was born. Two years ago Live Nation merged with Ticketmaster to become ticketing and promoting giant Live Nation Entertainment.

Now Sillerman views a similar business opportunity in the Electronic Dance Music (EDM) scene — possibly an even more profitable one now that social media can be harnessed to connect and drive audience. In reference to his new interest in the dance music event industry, Sillerman recently explained to The New York Times, “There’s a wave of interest in attending concerts that have less to do with the specific music and more to do with the experience attached to the music.”

“Our thought is that the experience of attending an individual event can be perpetuated and made better by connecting the people, not just when they’re consuming the entertainment but when they’re away from it.”

And according to the piece, he thinks he sees where the money is.

“I’m confident we’ll do an excellent job empowering these kids (meaning promoters) to be as good as they can be. I’m also confident that we will create a better experience for the fans. Can we monetize that? If we can, this will dwarf the first SFX. That’s the whole game.”

Thus, just as it was 20 years ago, the media mogul is on the hunt for regional promoters whom he can unite under one roof, once again under the SFX Entertainment moniker. The Times article reports that Sillerman claims ongoing negotiations with roughly 50 promoters and getting tentative deals with around 15 so far.

One high profile grab has been festival promoter Donnie Estopinal, until recently of Insomniac Productions but now making the move to sell his fledgling dance music business, Disco Donnie Presents, to Sillerman.

Estopinal took some heat over the decision in recent days while on a panel at the dance music extravaganza Electric Daisy Carnival’s pre-show conference. According to an article on Billboard.biz, Estopinal was initially cheered at the mention of the sale, but rival promoters, including Pasquale Rotella, Estopinal’s ex-partner from Insomniac, soon challenged him on the wisdom of this move.

Whether the decision to join or abstain from this new venture remains a subject of debate, a force of nature such as Sillerman will be hard to resist as his company starts picking up partners.

Add to this the surge in popularity of the dance/electronic scene, and the force may just be irresistible.

In April, the Times noted that, while sales for recorded dance music remain “relatively low — even the biggest recent albums, like David Guetta’s ‘Nothing But the Beat,’ rarely sell more than 300,000 copies,” many of the subgenre’s live events have exploded in popularity, and profits, in recent years.

For instance, the Electric Daisy Carnival’s first ever appearance at the MetLife Stadium in East Rutherford, NJ, led to a sell-out in three hours.

Nevertheless, EDM ticket sales are not consistent, at least not across events or markets. While large scale festivals like Electric Daisy or the Ultra Music Festival in Miami have become “destination” concerts and sell well on the primary market, secondary sellers have not all shared this experience. A broker who declined to be identified recently told TicketNews that ticket sales for the smaller EDM events have been spotty and characterized by single ticket sales, as opposed to the group sales often seen for concerts.

Earlier this month, Jason Berger, president of AllShows.com, reported less than stellar sales for the Electric Daisy Carnival in New Jersey. Nevertheless, he expressed optimism that sales would pick up as this type of music continues to gain fans.

“The Electric Daisy Carnival is new to New York, and usually these festivals gain in popularity after a few years, so although this was not an immediate sell-out, I would think that popularity will grow with this festival and in future years there will be increased demand.”

Maybe it’s a case of the secondary markets catching up to the primaries in this new trend. Maybe the larger arenas are creating a more attractive “destination” and therefore providing a bigger draw. Time will tell. In the meantime, whatever shape this all takes, it is clear that EDM events are the next big thing. In the April Times article, Live Nation head Michael Rapino was quoted as saying, “If you’re 15 to 25 years old now, this is your rock ‘n’ roll.”

Upcoming EDM shows worth noting include Hard Summer in California, Burning Man in Nevada, and Electric Zoo in New York, all of which kick off this August.