EDM and our Economy #GoodVibesOnly
EDM (Electronic Dance Music) industry has been exploding since the last two decades. The industry has evolved from an underground genre that belongs to “minority group” genre to what you call mainstream nowadays. Just Ultra Worldwide (one of the biggest music festival organizations in the world) alone had 1Mn+ attendees in 20 different countries, which was equivalent to the total attendance achieved by the Winter Olympics 2018 in Korea. With the increasing popularity supporting the enormous business opportunities, investors have also been rushing in the sector to make profits. The current electronic dance music industry is valued at $7.3Bn as of 2018 and is expected to reach $9Bn by 2021. The revenue streams of the industry can be broken down as hardware and software, festivals and clubs, DJ earnings, and recorded music - with over 50% contribution from festival and club earnings.
These massive figures should have been no surprise since the millenials, as well as other age groups, are obsessed with going to all sorts of music festivals, such as Electric Daisy Carnival (EDC) or Tomorrowland in and out of the country. The industry has also established its official status by organizing annual conferences like the International Music Summit as well as its own lobbying group, Association For Electronic Music. So what has been driving the recent growth of the energetic dance scene particularly in the U.S?
Before the tech boom, it was the commercial crossover that brought the EDM on the main stage - for example, the collaboration between the pop acts Black Eyed Peas and Will.I.AM and the French DJ David Guetta on the album “I Gotta Feeling” in 2010 (which reached 5.5Mn downloads on Itunes by 2010.) The proven success later started the POP/EDM music trend up to now. Another contributor is the Tech sector - the success of Youtube and Spotify has that makes EDM very accessible to mainstream listeners. In 2018, Spotify commands 12Bn+ streams from EDM alone. Given the digitalization of the music experience, consumers then seek physical and personal fix from attending the festivals or purchasing related merchandise. Lastly, social media also helps to market the new music genre and establish fans’ loyalty as well as build up DJ online personality.
EDM industry has also brought other benefits to the economy, such as creating temporary jobs in small non-tourist towns (Coachella alone created 3000 jobs and $254 in revenue in Indio, California in 2012). In major tourist cities, EDM festivals have become part of the major tourist attraction (200,000 international tourists participated in 3-day festival Tomorrowland in Belgium last year). Another report from Beacon Economics shows that EDC Las Vegas alone generated over $20Mn tax income for the state government.
Although EDM festivals are often stigmatized with substance abuse, EDM culture is, however, deeply rooted in the values of “Peace, Love, Unity, Respect.” Seeing the enormous economic benefits and potentials within the industry, ravers and business investors should be aware of the risks as well as opportunities in EDM (without over-commercialization)!
Source:
(1) http://xlivecon.com/lasvegas/how-music-festivals-boost-the-local-economy/
(2) https://smartasset.com/mortgage/the-economics-of-electronic-dance-music-festivals
(3) https://www.axs.com/news/study-finds-edm-festivals-generate-billions-for-local-economies-62592
(4) https://www.complex.com/music/2013/09/business-of-edm
(5) http://www.thembj.org/2013/12/the-economics-of-the-electronic-dance-industry/
