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Shut up and spend: inside the electronic music money machine

Exploring the EDMBiz Conference and music's hot new $6.2 billion industry

There was a time, not many years ago, when people used to ask each other what type of music they liked as a way of finding common ground. Genres meant something! You would walk into a record store and head to the R&B section, the rock section, or the country section, and where you went said something about you. The concept of genres meant a lot to the music industry — it allowed record labels to define you as a consumer in order to be on the receiving end of the spending relationship as often as possible.

But then the internet happened, and everything got messed up. Suddenly, there were a billion different hashtagged microgenres: bloghouse, raptronica, country-rave, Tumblrwave… all the products of a new kind of music consumption led by the democratization of production and the free exchange of music all over the world. For old-school music biz people, this sucked! Without a prevailing cultural wind to guide them, they had trouble marketing to fans, and without physical album sales, it was difficult to stay in the black. But as people born in the ’90s grew up, a seemingly new cultural force emerged that the record industry saw as a pulsating white light at the end of a long, Napster-induced coma: EDM. Some clever marketer decided to package the pervasive electronic sound of pop music into Electronic Dance Music, and the move worked in a big way. The EDM industry, along with its corresponding superstars and festivals, has become such a force that it has generated the need for its own type of trade show in Las Vegas, called EDMBiz, where I found myself a few weeks ago. But before we go to the desert, let’s step back in time a couple decades.

In 1992, Eurodance hits like Captain Hollywood Project’s “More and More” were all over the radio and Nine Inch Nails’ “Wish” was all over MTV. This was a kind of first wave of experimental electronic pop in America, but for most people it didn’t have staying power. I was the exception: unlike a lot of ’80s babies, I used dial-up internet to dive into the furthest reaches of the electronic music market. As a teen, I was obsessed with intelligent dance music, or IDM — a term that everyone seemed to hate, but was the only thing that people could agree on to describe European masters like Aphex Twin, Four Tet, and μ-Ziq. In the 2000s, I followed the early evolution of the music through grime and then dubstep — a breed of electronica known for its devastatingly minimal bass abstractions. So in the early 2010s, when terms like EDM and dubstep began to float into American pop radio, I paid very close attention. At that time, Electronic Dance Music was too ambiguous for mainstream America to grasp — what was this hard-hitting, repetitive sound that made thousands of people dress up like UFOs and eat ecstasy until they died? Did it have any street cred, or was it only for n00bs? Should we call it techno? What in the shit is a Skrillex? Is this Rihanna album dubstep or what?

Electronic Dance Music didn’t grow into a serious industry in America until it was boiled down into those three little letters. Like KFC or MTV, EDM is an acronym that implies a lot about a substance that may or may not be contained in the actual product. But the idea behind an acronym like EDM isn’t about the music itself — it’s about the cold hard cash earned from selling the whole package to legions of people.

In mid-June, Insomniac Events hosted the third-annual EDMBiz conference at Las Vegas’ Cosmopolitan Hotel, in the days leading up to its massive Electric Daisy Carnival, which is loosely known as the world’s biggest rave. As notable as it is for its size, EDC is known just as well for having at least one person die from ecstasy-related trauma annually. Walking through the halls of the Cosmopolitan’s conference halls for EDMBiz, however, the pall of rave-related fatalities was entirely absent. The event convened a group of about 1,000 people who took EDM very seriously as part of their careers, but who’d apparently left their feathers and body paint at home: the most extremely dressed attendees were goth-casual, but everyone else looked like a generic creative executive. Regardless of dress, everyone was munching on sushi and sipping lattes, listening to bass music spun by a duo of statuesque blonde women in slinky leather tank tops and diamond-studded headphones. In the conference’s small expo section, representatives from gear manufacturers like Pioneer and ticketing entities like networked with event promoters and music-reactive LED sunglass vendors. And every so often, I got a glimpse of those at the top of the EDM food chain — the graying (or already gray) white men in expensive jeans, bespoke blazers and, sometimes, tailored button-down shirts.

A pulsating white light at the end of a long, Napster-induced coma: EDM

Ubiquitous West Coast music guy Jason Bentley hosted the two-day EDMBiz affair — he’s the music director at KCRW, and the host of the Santa Monica radio station’s massively popular new music show Morning Becomes Eclectic. The handsome, honey-voiced DJ has always been a confusing character to me, riding the line between hardcore underground music proponent and pure Hollywood douchebag super-efficiently, for a seemingly optimal balance of reverence for good music and good business. He was, in essence, the perfect person to host this particular conference, which was primarily a collection of panels and conversations between people who had been successful at making a more-than-decent career out of concurrent and equally powerful loves of music and money. People who had the love of music, but maybe not quite the level of material success as those on the stage, sat attentively in the audience, taking notes on laptops and smartphones, eager to glean any sliver of an edge over the competition in an increasingly crowded and constantly growing market.

On the first day of the conference, four men spoke on a panel called "The 6.2 Billion Dollar Business," and offered a vision of the financial and cultural reach of EDM. "Every generation has a style of music that comes with a set of opportunities to reach out to people who are aficionados," mused Rick Stevens, the CEO of Y Entertainment Group and one of the panelists. "Rock ‘n’ roll, disco, hip hop." These were all genres that started out conceptually splintered, then rallied under a unified title to become the extremely profitable "sound of a generation." They were all genres, Stevens said, that were once a lot like EDM.

Earlier in the day, the EDMBiz keynote featured Vegas nightclub kingpin Sean Christie, a man perfectly suited to explain EDM’s rapid mainstream ascent. He runs the Wynn Hotel’s highly successful club properties Surrender and Encore Beach Club, and he looks the part — perfectly executed two-piece suit, slicked-back hair, and an intensity in his delivery that oozes power. When he started booking DJs in Nevada around 2000, the music industry hadn’t come around on DJ culture. Christie experimented, booking events like a spinning debut from Perry Farrell (of Jane’s Addiction) and a set by legendary underground DJ Frankie Bones. Both were complete flops. It wasn’t until Christie orchestrated Paris Hilton’s 21st birthday party at the Bellagio, Christie said, that things began to change — it was the opening salvo in a string of events that catalyzed huge nightclub growth in Sin City. As access to legal gambling expanded around the world, the Vegas gaming industry was losing players — and tourists started to spend more on bottle service at ritzy dance parties.

EDM’s best friend

That shift from casinos to clubs also saw the rise of celebrity DJs. Christie signed Calvin Harris, Kaskade, and Skrillex to their first US residencies in the late 2000s at his Wynn clubs. Soon, bidding wars to book top DJs erupted between clubs, and for the first time ever, DJs could earn six figures in a single night. "That raised the bar financially," Christie recalled. The idea was, "let’s see what we can afford to pay." It was around this time that much of electronic music was merged into a mass-market presence under the term EDM — the perfect catchall to sell DJ-producer culture and sound to the masses. While Vegas may have ushered in the era of EDM celebrity, it didn’t take long for the rest of the music industry — and the country — to get on board.

John Boyle, the CFO of Insomniac, described the current financial state of the EDM market during "The 6.2 Billion Dollar Business" panel. "This isn’t disco," he said. "This is hip hop with a lot more legs." The prevailing sentiment on the panel was that $6.2 billion is a low estimate, and the global value of EDM is currently closer to $20 billion, with room to grow. "There’s a fundamental difference [between EDM and other music cycles]," Boyle said. "Technology." After all, EDM fans aren’t merely rabid consumers of drugs, alcohol, and subwoofers. They’re also primarily millennials whose hashtags, likes, and shares create a precisely quantifiable consumer.

What was this hard-hitting, repetitive sound that made thousands of people dress up like UFOs and eat ecstasy until they died?

If there’s any company that knows how to quantify those consumers, it’s Nielsen. In addition to analyzing radio and TV listenership and album sales, the company also monitors every aspect of how consumers interact with brands online. During a solo presentation called "Engaging the Electronic Music Listener," Tatiana Simonian, Nielsen’s head of branded music entertainment, described how she measures the data that EDM listeners fork over, either in directed Nielsen surveys or in the form of likes and hashtags, and in chart after painstakingly rendered chart, revealed how EDM has created a new class of highly engaged spenders.

Not surprisingly, people who love electronic music also love electronics. They have "a high propensity to purchase high-tech devices versus other genres, making them ideal for partnerships in the mobile and tech space," Simonian said. They’re more likely than other music listeners to purchase songs after hearing them in an ad. They’re also 50 percent more likely to buy energy drinks and 18 percent less likely to buy diet soda — presumably because they spend too much time dancing to worry about calories, Simonian joked. They spend more of their music money on live events, and they’re trendsetters — EDM listeners are generally regarded as "key influencers" among their peers. That influence is already attracting major companies eager to throw money at the genre: 7UP, for example, recently debuted its Electric Daisy Carnival-branded can and a companion hashtag, #7x7UP, which the company is using to give away tickets to shows like Tiësto and the HARD Summer music festival.

With album sales on seemingly permanent decline, readily quantifiable EDM consumers offer the industry a raft of ways to make money. Festival culture is chief among them. Modern EDM festivals like Electric Daisy Carnival, HARD Fest, and Skrillex’s Mothership tour are massive productions that dwarf their predecessors: most "laptop" artists and DJs were, until recently, lucky to have shoddy projections on a poorly hung bedsheet as their visual backup. But when Daft Punk brought their massive LED-coated pyramid to Coachella in 2007, things started to change.

Now, Coachella has a series of tents that are covered in acres of LED panels, riddled with high-intensity lasers, and dense with the sticky musk of artificial fog. The festival, which rakes in an astounding half-billion dollars a year, featured an EDM producer (Calvin Harris) as its top-billed headliner for the first time in 2014. Festivals also offer fertile ground for millennials, a generation entirely unfamiliar with the concept of selling out, to engage in "brand immersion." Swedish House Mafia pioneered the trend when they partnered with Absolut in 2012, releasing a single called "Greyhound" — named after the popular combination of vodka and grapefruit juice — that featured the trio behind a roboticized race dog on its cover. The move successfully cast the cocktail as an EDM staple, and the band incorporated the digital dog into its visuals for an Absolut-sponsored tour. Simonian says Nielsen’s research has revealed that electronic music fans "want brands to sponsor artists." If this concept sounds like "selling out" to you, your problem might be that you were born before 1990, or that you were raised on some form of punk rock ethos that requires strict division between creativity and capital (I’m guilty of both). Selling out is an alien concept in the EDM market — when Simonian says that fans want brands to sponsor artists, it might just mean that fans are happy to see their favorite producers making a decent wage to create amazing music.

The only way to preserve an unforgettable experience

Some panelists recognized the obvious creative dilemmas facing the current market, namely, that it’s becoming too formulaic for its own good. "EDM has become much more about function than it is about expression," said Nathan Lim, the manager of the dubstep-metal band Krewella, during the "New Art Of Selling Music" panel. "[It’s about] creating the big festival bangers that are gonna turn the crowd up." Thump editor-in-chief Zel McCarthy noticed that EDM "seems to be custom-made for the short attention span of millennial society." But what, in Tiësto’s name, will happen when all these spendy, brand-engaged 20-somethings finally get tired of EDM’s current incarnation? The loose answer amongst the experts seemed to be — as long as the money keeps rolling in — that the industry will figure something out. After all, there are always new subgenres to throw into the EDM marketing machine, and new markets to sell it to. Bangalore’s First-Ever Trap Festival, anyone?

EDM fans aren’t merely rabid consumers of drugs, alcohol, and subwoofers

Of all the buzzwords and catchphrases bouncing around the EDMBiz Conference, one popped up more than any other: authenticity. "Even the biggest DJ started off with a love of music," said Sean Christie, the nightclub magnate. "No one started off thinking, ‘I’m gonna make $20 mil this year.’" And nearly every participant in "Show Me The Money: The Agent’s Panel" said the primary indicator for an artist’s future success is "whether it’s something that feels real." While, to me, some megahits like DJ Snake and Lil Jon’s "Turn Down For What" resonate as genuine but for every one of those there’s an emotionally flimsy piece of trash like Martin Garrix’s "Animals" that makes me feel empty inside. Still, I should consider myself lucky: if the EDMBiz conference confirmed anything, it’s that the genre is a business first, and an artistic endeavor second — and I don’t think there’s anything wrong with that. Electronic music still remains one of my deepest loves, and the fact that it’s highly commercialized just means I get to hear more of my favorite sounds in more contexts than I ever did when I was an angsty teen downloading 64k Orbital MP3s over a shoddy 28.8k USRobotics modem.

So when I hear Skrillex in a Best Buy commercial, hear Calvin Harris teaming up with Rihanna, or a mediocre deadmau5 rip-off while I’m browsing through the underwear section of Target, I can only smile contentedly: finally, the sound I wanted to hear everywhere when I was growing up is actually everywhere. EDM has become the first "voice of a generation" that openly accepts a partner all other types of music bristled at: unabashed capitalism.