IMS Business Report 2015 An annual study of the Electronic Music industry by Kevin Watson

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IMS Business Report 2015 by KevinWatson.net The IMS Business Report 2015 covers five different aspects of the industry

Music 1 Sales of tracks, albums and streaming by country DJs & Live Acts 2 Profiles of leading artists, including earnings and social media Clubs & Festivals 3 Popularity of festivals and clubs around the World Companies & Brands 4 Key players in industry, recent M&A activity and partnerships Industry Overall 5 Updated estimate of value growth of Electronic Music globally

Hint: follow the sections through the report by looking for the starred number at the top of each page 2

IMS Business Report 2015 by KevinWatson.net 1 Music Dance share of US track sales in 2014 equalled all-time high, with even higher share of streams Electronic / Dance Music Share of Sales by Format (USA) • Dance’s share of digital Streams track sales is now 1.5x the level it was in 2011, maintaining the 4.6% first achieved in 2013 Digital Tracks • Album share slipped significantly in 2014, but this could well be a one- off Albums • In terms of streams, Dance significantly over- indexes, accounting for 6.8% in 2014

Source: Nielsen Music U.S. report 3

IMS Business Report 2015 by KevinWatson.net 1 Music In both the USA & Canada, Dance is the 4th most popular genre for streams – higher than Country Share of Streams by Genre (2014*) USA Canada • Dance accounted for 1 in every 10 streams in 29 21 Canada in 2014 • In the USA, total streaming across all 25 26 genres grew by 55% YoY, in comparison to album and track sales 21 27 which both declined >11% • Consumers listened to 7 10 an estimated 12 billion Dance / Electronic streams in North 6 5 America in 2014

Note: * For Canada, data from July-December 2014 only; 4 Source: Nielsen Music U.S. Report 2014; Nielsen Music Canada Report 2014; IMS Analysis IMS Business Report 2015 by KevinWatson.net 1 Music The official videos of the Top 9 EDM tracks in 2014 generated over 2bn views on YouTube

Views & Likes Subscriptions Audiences

9 tracks on the Billboard Subscribers to EDM • EDM fans are more Top 100 2014 were EDM – channels grew likely to be online official videos of these significantly in 2014 • Consumers less than 25 tracks generated a huge years old view most number of views and likes EDM content on on YouTube YouTube • Those between 25 and 34 years old were the 2.3bn EDM segment with views highest growth in 2014 • Even interest in EDM on 8.4m YouTube amongst 35 to likes 49 year olds grew 80% last year

5 Source: Think with Google – ‘Have You Heard of EDM?’ report IMS Business Report 2015 by KevinWatson.net 1 Music Dance’s share of single sales in the UK reached an 8 year high in 2014

Dance Music Share of Sales by Format (UK) • Dance music share of singles grew slightly YoY in 2014, to the highest Compilations level since 2006 • 27 of the 100 top selling singles of the year were Dance, as were 1st and 3rd Singles most streamed tracks on Spotify (Clean Bandit – Rather Be, Mr Probz – Waves) Albums • Share of Compilations and Albums dropped slightly, but the genre maintained position of 2nd and 3rd most popular, respectively

Source: Official Charts Company / BPI, Spotify 6

IMS Business Report 2015 by KevinWatson.net 1 Music Local DJs & Artists in South Africa dominated the domestic Airplay 100 chart in 2014

South Africa Airplay Top 100 2014 by Genre INDICATIVE Domestic International • Estimates suggest almost half of the Domestically produced records in the 2014 Airplay Top 100 were Dance / Electronic 20% • There are a number of successful South African DJs & Artists, 44% including Spoek Mathambo, Das Kapital and DJ Kent • Black Coffee in particular has built a sizeable global fanbase: o >1m Facebook fans Dance / Electronic Other Genres o >700k Twitter followers o >25k Soundcloud followers • For International tracks, one fifth were estimated to be Dance • c.7% of best selling tracks were estimated to be from the genre Source: Entertainment Monitoring Africa, Facebook, Twitter, Soundcloud, Industry Press, IMS Analysis 7 IMS Business Report 2015 by KevinWatson.net 1 Music There are now ten times more tracks available to download on Beatport as there were in 2008

Beatport Registered Users & Tracks Available (2008-14) • The number of tracks Tracks available on Beatport has Available increased tenfold since 2008, equivalent to c.50% per annum

Index • Significant user growth (2008 has also been sustained =100) over the past seven years, with the total user base Registered Users now 4.5x that in 2008 • In addition, Beatport have recently launched a streaming service

Source: Beatport 8 IMS Business Report 2015 by KevinWatson.net 2 DJs & Live Acts Forbes data shows inflation in DJ Earnings slowed in 2014, except for #1 Calvin Harris ($66m) Forbes Electronic Cash Kings (2012-14) $m

66 +97% YoY% 30 252 Top 9 12% 28 225 28 66 #1 43% 46 23 $m

114 2014 22 $305m 92 179 186 #2-9 4%

Note: * Excludes DJ Pauly D 9 Source: Forbes IMS Business Report 2015 by KevinWatson.net 2 DJs & Live Acts DJs are using different social media platforms, such as Soundcloud, to drive their popularity Topdeejays.com Highest Ranked DJs (May 2015)

Skrillex & Calvin Harris: >5m Sound- cloud followers

Deadmau5: sizeable Twitter following

Juicy M: Ukrainian female DJ known on YouTube for 4 CDJ mixing (>45m views)

DVBBS: Smaller online fanbase, but DJ Mag #20 10 Source: Topdeejays.com, DJ Mag Top 100, Facebook, Twitter, Soundcloud IMS Business Report 2015 by KevinWatson.net 2 DJs & Live Acts Martin Garrix continues to grow his online fanbase by c.22k a day, reaching over 17m users Martin Garrix Social Media Reach by Platform – Additions by Year (2014 Vs 2015) YoY k 2,750 3,000 Chg • Garrix has added almost (%) twice as many YouTube subscribers in 2015 as 2014 -71 (c.150k a month) 820 • His 2014 Ultra Music Festival performance received 1.3m +27 680 views a year later in April 2015 +90 • He has also grown Twitter 440 and Instagram followers by a greater amount in 2015 +15 420 2015 • 54% of his fanbase is female YTD = • In April 2015, he received 2.5m -46 most Twitter mentions from 140 USA, Argentina, Spain, Philippines and Mexico Jan-May 2014 Jan-May 2015

Source: Next Big Sound, 5th May 2015 11

IMS Business Report 2015 by KevinWatson.net 2 DJs & Live Acts The success achieved by Nervo could be helping other female DJs in Asia to gain popularity

Celeste Siam Nervo Nicole Chen Country: Country: Country: Rank*: 1 Rank*: 1 Rank*: 2 Facebook fans: 136k Facebook fans: 3.2m Facebook fans: 199k • 21st in DJ Mag Top 100 Nakadia poll 2014 Gayle San Country: • Only all-female act in Country: Top 100** Rank*: 2 Rank*: 3 Facebook fans: 57k • Highest ranking Asia- Facebook fans: 68k Pacific DJs in poll • Large following on Lisa Bluestar other social media Eva T Country: platforms, incl.Twitter Country: (741k), Soundcloud Rank*: 3 (423k) & YouTube (29m Rank*: 1 Facebook fans: 44k plays) Facebook fans: 43k

Note: * Topdeejays.com Facebook rank for country of origin, November 2014; ** Excluding Krewella Source: Topdeejays.com, Facebook, Soundcloud, Twitter, YouTube, DJ Mag; 12

IMS Business Report 2015 by KevinWatson.net 3 Clubs & Festivals In the DJ Mag Top 100 Clubs 2015, European venues dominate, but 18 are in the USA, 6 in LV DJ Mag Top 100 Clubs by Country & INDICATIVE Continent (2015) • 18 clubs in 2015 Top 100 are in 30 6 clubs in Las Vegas 29 USA, including six Las Vegas venues, four in Miami, three in NY 5 in London • UK is next most represented 18 country, followed by Spain – 16 7 in Ibiza mainly thanks to seven venues in Ibiza being in the list # 10 Asia (7) Africa (1) 9

5 5 4 4

North Europe America (57) (21)

Note: * includes Canada, Netherlands, Belgium, Cyprus, Bulgaria, Greece, Columbia, China, Japan, Malaysia, Egypt, Panama, Paraguay, Peru, Philippines, Portugal, Russia, Singapore, South Korea, India and Ecuador 13 Source: DJ Mag Top 100 Clubs 2015 IMS Business Report 2015 by KevinWatson.net 3 Clubs & Festivals In 2014, the 12 largest Electronic Music clubs in the US generated half a billion dollars in revenue INDICATIVE Electronic Music Clubs in USA by Revenue (2014)

Revenue pa ($m): City Las Vegas Las Vegas Las Vegas Miami Las Vegas New York Miami New York Los Angeles Total = Miami $505m San Francisco Los Angeles

Source: Nightclub & Bar Top 100 2015 (Low End of Range Shown) 14

IMS Business Report 2015 by KevinWatson.net 3 Clubs & Festivals Eventbrite study: quarter of all nightlife tickets sold in the US are for Electronic Music events

26% 72% of all Nightlife of EDM fans go events were $81 out at least two EDM related nights a week average spend on a night out

c.3x music ticket 57% of price in NYC Vs 3 per night - EDM fans use Austin avg number of ridesharing drinks apps (Vs 46% consumed avg)

15 Source: Eventbrite: The Nightlife Economy: How Much Do People Spend on a Night Out? IMS Business Report 2015 by KevinWatson.net 3 Clubs & Festivals USA Festival growth has been huge since 2007, but levelled off in 2014, due to one weekend UMF

USA Electronic Music Festival Capacity INDICATIVE (2007-2014)

x10 increase = 46% CAGR • Research suggests Electronic Music fans in the US are 13% more 1.4m 1.4m likely than average to attend a festival • Many new festivals have entered the 980 USA, including Tomorrowworld, Beyond Wonderland and Mysteryland k 660 • However, attendance in 2014 475 remained flat YoY as UMF switched 345 back to one weekend 215 • Despite being sold out in 2015, the 145 price of early bird tickets for Ultra Festival 2016 have been lowered significantly to $250 Vs $450 full price, potential driven by feedback from fans

16 Source: event websites, Wikipedia, Resident Advisor, Billboard, Nielsen, industry press, IMS Analysis IMS Business Report 2015 by KevinWatson.net 3 Clubs & Festivals This year Asian festivals, including one of the biggest in the world, will host >1 million fans Asia-Pacific Electronic Music Festival Attendance by Country (2014/15) Total (k) Largest event (k)

420 Stereosonic (various locations)

370 Sunburn Goa Will 85 Zoukout become 4 day festival 50 Ultra Music Festival in 2015 42 Total = Ultra Music Festival 40 >1m Storm Electronic Music Festival

20 Djakarta Warehouse Project

20 Waterzonic INDICATIVE Note: October 2014 – October 2015 schedule used to calculate totals 17 Source: Electronic-festivals.com, event websites, Wikipedia, industry press, IMS Analysis IMS Business Report 2015 by KevinWatson.net 3 Clubs & Festivals Next Big Sound Annual Review shows Electronic is the 3rd most popular genre on social media Average Distribution Across All Social Media Platforms* by Genre (2014)

• Electronic Music ranks 3rd in terms of distribution across all channels – behind 24 only mainstream genres Pop / Rock and Rap 11 • Separate study by My Love Affair and Linkfluence found Twitter and Instagram were the two most active platforms 9 • Analysis from early 2015 showed the brands with the most mentions amongst EDM fans were: 9 • Nike (15k) • Burn (10k) • Adidas (7k) 8 • Corona (15k) • Samsung (14k)

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Note: * Includes Spotify, YouTube, Vevo, Facebook, Twitter, Wikipedia, Souncloud & Instagram 18 Source: Next Big Sound – 2014 Annual Review; My Love Affair & Linkfluence study, USA, from January 2015 IMS Business Report 2015 by KevinWatson.net 4 Companies & Brands Global DJ Product market is now worth nearly $350m & US market has grown >60% since 2009

DJ Product Sales Value: USA Worldwide +61% • US market grew 61% from 336 2009 to 2013 = c.13% pa 139 • Highest YoY growth in ‘13 120 was in Digital DJ Others 114 Controllers (+38%) 104 • In addition, Computer 201 86 Music Products segment $m worth $360m in US in 2013 (across all genres) • Overall, global market is estimated at $336m • Pioneer DJ purchase by KKR valued firm at $550m • Annual sales in 2014 of $201m, gave Pioneer DJ a market share of c.60%

19 Source: NAMM, MI Salestrak, Reuters IMS Business Report 2015 by KevinWatson.net 4 Companies & Brands SFX reported strong revenue growth for Q1 and continues to expand festival footprint SFX Entertainment Festivals* by Quarter and Region (2014-15) • SFX has continued to grow it’s 32 festival footprint, including One 30 Tribe in California and Bestival in 29 Toronto 25 • 251 festivals and events took 24 place in Q1 2015, attracting 751k attendees 19 • Like for like festival attendance # and revenue were both up 1.2% 13 Inter- 12 national • Q1 2015 Live Revenue totalled $40.2m, 77% of total SFX revenue, which overall grew 56.6% North • For the whole of 2015, planned America festivals and events are expected to have an attendance capacity of c.6m 2014 2015

Note: * Defined as having attendance capacity of 10,000 or greater Source: SFX, Financial press, Industry Press 20 IMS Business Report 2015 by KevinWatson.net 4 Companies & Brands In March 2015 alone, both Live Nation and AEG made further moves into the EDM festival market

• Acquired a majority stake in • Entered the EDM Festival scene Swedish EDM promoter with the launch of the CRSSD Stureplansgruppen (SPG) Live festival in San Diego • Gives LN access to many events • Estimated 15,000 attendees over in region, including the 100,000 two days capacity Summerburst Festival • Partners included ‘All Gone Pete • Signed a 26 festival partnership Tong’ and ‘LED Presents’ with Smirnoff • Includes major EDM franchises Electric Daisy, HARD and Wonderland • HARD Events continued their expansion by announcing the goHARD tour covering 5 US Cities Source: Industry Press 21

IMS Business Report 2015 by KevinWatson.net 4 Companies & Brands DJs are now endorsing high-end brands, competing with other well-known celebrities

Nervo are Ambassadors David Guetta teamed up for the ‘Don’t Crack Under with Mumm champagne for Pressure’ campaign, the Formula One-themed alongside Maria Sharapova music video to his single and Cara Delevingne ‘Dangerous’

Calvin Harris became the Avicii recently teamed up face of Emporio Armani with Volvo to launch a joint Underwear, eyeware and song and music video for watches for their Spring/ their ‘A New Beginning’ Summer 2015 campaign campaign

Source: Industry Press, Company Websites 22

IMS Business Report 2015 by KevinWatson.net 4 Companies & Brands It appears that Electronic Music has begun to truly penetrate mainstream culture in 2015

A TV Show… A movie… A biography… A museum…

‘The Ultimate DJ’ ‘We Are Your Calvin Harris: Plans announced was officially Friends’ starring The $100 Million for ‘MOMEM – launched by Zac Efron is DJ by Douglas Museum of Yahoo, Syco & scheduled for Wight has just Modern Ultra Music in release in August been released in Electronic Music’ April 2015 2015 ebook format in Frankfurt

Source: Industry Press 23

IMS Business Report 2015 by KevinWatson.net 5 Industry Overall We estimate the global Electronic Music industry has grown 12% YoY to $6.9 billion

Electronic Music Industry INDICATIVE Annual Value by Sector

+12% • By combining bottom-up and +37% 6.9 top-down approaches, the 6.2 Other* value of the industry has been estimated in each of the past three years 4.5 Festivals & • Growth slowed in 2014 Vs $bn Clubs 2013, with the industry reaching a value of $6.9 billion per annum • We estimate North America accounts for c.$2 billion of the Music industry, and Asia-Pacific c.$1 billion annually

Note: * includes DJ Product and Software sales and DJ earnings from other sources Source: Wikipedia, RIAJ, BPI, The Nielsen Company & Billboard’s Music Industry Report, Google Research, Forbes, Economist, Official Charts Company / BPI, PWC, EVAR Advisory Services, UK Music, FT, Pioneer, SFX, 24 CIA World Factbook, electronic-festivals.com, NAMM, MI Salestrak, Reuters, industry press, IMS Analysis IMS Business Report 2015 by KevinWatson.net Want to find out more? Contact us using the info below

Find out more about Contact the author, download International Music Summits sources used in the report, across the World, including IMS browse other Electronic Music Ibiza, IMS Asia-Pacific and IMS Industry insight, and join the Engage community

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IMS Business Report 2015 by KevinWatson.net