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IMS Business Report 2017 An annual study of the Electronic by Kevin Watson

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017 An in-depth review of the industry today, and a look back over the past decade in

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS Ibiza 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres Streaming services and Latin American market continue to drive global music industry growth

Paid Subscribers to Music Recorded Music Industry Streaming Services Revenue YoY Growth by Region (2012-2016) (2015-2016) 112m

+65% 5.9%

68m 12% m

41m 7.9% 28m 20m 5.1%

4.0%

Source: IFPI 4

IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres On Spotify & are in Top 10 for total electronic streams; Higher share in Europe & Asia Total Electronic Streams Share of Electronic Music Listening (2017) (2017)

Currently 12 billion Electronic music monthly streams on Spotify

Source: Spotify 5

IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres increased share of all formats in the USA in 2016, rising to be the 5th most popular genre Dance / Electronic Genre Share of Total Consumption by Format (USA, 2015-2016) • Dance share of total audio 2015 consumption increased to 4% in 6 2016 2016 from 3.4% in 2015 5 • Genre moved above Latin to 4.7 th 4.2 become 5 most popular 4 overall, behind only Rock, R&B/ 3.4 , Pop and County 3 • For on-demand audio 1.8 streaming, Dance is joint 4th most popular genre with a 6% share • 57% of total Dance ‘sales’ are from streaming – the highest of any genre in the US

Note: * Digital & Digital Tracks used for 2016 Source: Nielsen Music Year-End Report U.S. 2015 & 2016 6

IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres In , Dance share of sales reached an all- time high in 2016, double that of three years ago

Dance Music Share of Turnover (Germany)

• share 7.0% climbed to 7% in 2016, making it the fifth best- selling genre • Share has grown in each of last three years, reaching double the level of 2013 3.5% • 58% of Dance music 2.8% buyers less than 40 years old – highest proportion of any genre – next highest is Rock at 34%

Source: Bundesverband Musikindustrie (BVMI) 7

IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres Latest statistics from show Dance was the most played genre on radio in 2015 Share by Medium (France, 2015) Radio Streaming Audio

• On French radio in 2015, 29% 22% Dance was the most- played genre with a 29% share – 10% more than 19% 10% any other genre • For streaming audio, Dance had the second 14% 14% highest share with 22%, only behind Rap

11% 31% • Dance also secured a 13% share of streaming video, placing it third 11% 12%

Source: Economie de la Production Musicale – Edition 2016 – Syndicat National de 8 l'Édition Phonographique (SNEP) IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres has continued strong growth in 2017 and returned to profit as part of LiveStyle Inc.

Beatport Year on Year Growth (Q1 2016 - Q1 2017)

+14% • Beatport has delivered renewed growth and returned to being profitable in the first quarter of 2017 • Visitors, registered users % +7% and track sales have all increased compared to the same period in 2016 +4% • Streaming service has been discontinued following restructure of parent SFX – now LiveStyle

Note: * YoY growth is Q1 Jan 2016 compared to Q1 Jan 2017 Source: Beatport, industry press 9

IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres remains the best selling Beatport genre, with Trance and Drum & highest climbers Best Selling Genres on Beatport (Q1 2015-Q2 2017) Techno remains 1 Techno #1 genre on 2 Beatport, slightly outselling Tech 3 House House 4 5 Drum & Bass Trance resurgent 6 Trance in last 12 months 7 – up four to #6 8 Prog. House EDM genre 9 House 10 Indie Dance / Nu climbed to #9 11 Meanwhile, Electro House fell from #5 to #13 in just nine months 2015 2016 2017 Source: Beatport; Note: Techno includes Minimal / Deep Tech 10

IMS Business Report 2017 by Kevin Watson, Danceonomics.com A. Music Sales & Genres House is the most played genre on Pioneer DJ KUVO; Drum & Bass is highest climber in 2017 Most Played Dance Genres* on Pioneer DJ KUVO (Global, April 2016 – March 2017) 1 House House most 2 Tech House played genre, 3 Deep House accounting for 4 Techno 20% of all tracks 5 Drum & Bass Highest 6 Electro House climber is 7 Drum & 8 Electronica Bass – up from #13 to 9 Trap #5 in 7 mths 10 Trap also gaining in popularity – up to #9

2016 2017 Note: * Excludes genres such as Pop, Rock, Hip-Hop Source: Pioneer DJ 11

IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS Ibiza 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com B. DJs & Live Acts Forbes’ estimates earnings of Top 12 DJs fell 1% in 2016 to $300m – still 12% higher than 2013 Forbes Electronic Cash Kings (2013-16) INDICATIVE YoY% +4% -1% +9% Top 12 -1% • Forbes estimate 304 300 293 ’ Calvin 268 Calvin earnings fell 5% YoY Harris Calvin Harris #1 -5% Calvin Harris $63m in 2016 to $63m Harris Tiesto Guetta #2 3% • Places him #9 on Tiesto Guetta $38m overall highest-paid Guetta #3 -22% $m Guetta Tiesto $28m musicians list • Tiesto up to #2 (earnings +6% YoY), down #4-12 4% to #3 (-24% YoY) • DJs / Artists placed #4-12 in list earned 4% more than 2015

13 Source: Forbes IMS Business Report 2017 by Kevin Watson, Danceonomics.com B. DJs & Live Acts The most popular DJs are growing their followers 11x faster on Instagram than on Facebook Growth in Online Fanbases of Viberate Ranked DJs (Past 3 months, May 2017)

Top 10 : World’s #1 DJ continues to grow online following, including 4.75m followers

The Chainsmokers: have grown their fanbase on every social network by 15-45% in past 3 months

Marshmello & DJ Snake: using unique identities and branding to drive YouTube Selected Others & Instagram growth Nina Kraviz: Soundcloud followers up 19k / 8% in 3 months; 1.6m total plays 14 Source: Viberate, Facebook, Twitter, Instagram, Soundcloud, YouTube, IMS Analysis IMS Business Report 2017 by Kevin Watson, Danceonomics.com B. DJs & Live Acts are adding 28k social media followers a day, well below David Guetta’s peak

Daily Social Media Follower Growth*

47k • David Guetta was adding 47k fans a day on Facebook and 10k Twitter in 2011/12 • The Chainsmokers are currently gaining 28k per day, 28k including Instagram k • Most viewed YouTube video 12k 37k for Chainsmokers (‘Closer’) 4k has 1.5bn views, 44% more than Guetta’s most-viewed 11k video ‘Hey Mama’ (1.1bn) • Debut from Chainsmokers David Guetta Chainsmokers sold 166k (Feb-May ’17) (May ’11-May ’12) copies in US in first week

Source: Facebook, Twitter, Instagram, Viberate, YouTube, Billboard, industry press, IMS Analysis 15

IMS Business Report 2017 by Kevin Watson, Danceonomics.com B. DJs & Live Acts Gender diversity remains a key issue – study of 24 festivals found only 17% of artists were female % of Festival Artists by Gender (2016) • Thump study of 24 festivals in 2016 found on average only 17% of artists were women 45% • Some Dance festivals had a much lower % - had only 2 female artists out of 61 (3.2%) • campaign aimed at doubling number of female headliners at major music festivals in the next three years Average = 17%= Average

3%

Female Male

Source: Thump, Vice, Broadly, Smirnoff INDICATIVE 16 IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS Ibiza 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com C. Clubs & Festivals Millennials are 40% more likely to attend a club event in the USA, and total 2 billion globally US Live Music Attendance by Type in 2016* Index: % Millennials to % General Population % General • Overall 16% of people in Population the USA attended a club Club events (with 139 16% event with DJs in 2016, DJs) 14% for a specific DJ Club events (to see 136 14% • Millennials attendance specific DJ) at these events was 39% higher than average Music festivals 102 33% • Estimated 75m Live with Millennials in the USA, 2 100 40% multiple headliners billion globally = 27% of population Live concerts with 59% one main headliner 107 • Hispanics also over- index on club events, Small live music spending 17% of their 112 41% sessions music wallet on them

Note: *Question: Which of the following have you attended in the last 12 months? Source: Nielsen Music 360 – 2016 Highlights, Pew Research Center 18

IMS Business Report 2017 by Kevin Watson, Danceonomics.com C. Clubs & Festivals and Ultra have both used partner events to expand their festival brands worldwide

Tomorrowland Festivals & Events Festivals & Events (2012-2017) (2012-2017)

x10 Locations include: x7 Locations include: • • • • 10 • • 21 • • • Germany • Taiwan • S. Arica • • • • • Chile

11 ‘Road to ‘Unite’ Ultra’ 8 # events # events

10 Festivals 3 1 2 Festivals

Source: Tomorrowland, Ultra, industry press, IMS Analysis INDICATIVE 19

IMS Business Report 2017 by Kevin Watson, Danceonomics.com C. Clubs & Festivals Latin America has many high-profile Dance clubs & festivals, and huge growth in total music sales

INDICATIVE

2nd highest Spotify Storyland festival (2 days, 35k capacity) penetration in the BAUM club & festivals in Bogota world at 25%* Music revenue up 24% YoY in 2016 7 Clubs in DJ Mag Top Four of largest LATAM 100: Green Valley (8k), La Huaka festivals in 2017: EDC Sirena (5k), Matahari (5k), Mexico (110k), BPM was #74 in Anzu (3k), Warung (2.5k) (70k+), Beyond DJ Mag Top Wonderland (50k), 100 2017 Also festival WiSH Outdoor (35k) (60k) in October 2017

Latin America region statistics Ultra festival (70k) • Streaming revenue +57% in 2016 returning in 2017 after 2 years • Highest regional music sales growth Ban on electronic music events in • 30% of population are Millennials Buenos Aires recently lifted

Note: * As estimated by GlobalWebIndex in 2015 Source: IFPI, GlobalWebIndex, DJ Mag, Datanalisis ‘Conecta tu marca con los millennials’, industry press 20

IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS Ibiza 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com D. Companies & Brands Two major industry players have been acquired since August 2016, and more deals could follow

Ministry of Sound Recordings

• Acquired by Music UK in • Sold to Trilantic Partners August 2016 for estimated £67m for €350m in February 2017

• Deal includes artists, back • Group operates ten catalogue and compilations around the world, including Ibiza business venues Pacha, Destino and Lio

• Label was launched in 1993 and • First venue was opened by has cumulative album sales of founder Ricardo Urgell in , 70m+, including 40 UK #1s in 1967

Source: , Industry Press 22

IMS Business Report 2017 by Kevin Watson, Danceonomics.com D. Companies & Brands Global are expanding into festivals, including investments in three Dance events

South West Four • Acquired from Impresario alongside other events including Field Day , UK • Leading London-based electronic music October 2016 festival established in 2001 • Held in August with two day capacity of 40k

Snowbombing • Global increased investment in Broadwick Austria & Canada Live which promotes Snowbombing • In 2017 the first edition will be held in October 2016 Canada, alongside event in Austria

Hideout • Acquired majority stake in March • Festival now in seventh year of being held Croatia at Zrce beach in Croatia March 2017 • Global is also linked to promotion of Electric Elephant festival in Croatia

Source: Global, Industry Press 23

IMS Business Report 2017 by Kevin Watson, Danceonomics.com D. Companies & Brands received investment in February 2017 and is now set for it’s biggest Summer of events ever

Elrow Ibiza Elrow Friends & Family Residency at , New one-day festival in June-September 2017 , July 2017

Investment received from James Barton and team at Superstruct Entertainment to enable global expansion, February 2017 Elrow Town London Elrow Barcelona Biggest ever UK event, Regular events continue, August 2017 May & June 2017

Source: Elrow, Industry Press 24

IMS Business Report 2017 by Kevin Watson, Danceonomics.com D. Companies & Brands Dance is at the forefront of global technology trends, including VR, AI and live streaming

• Boiler Room & Google created first ever VR Virtual dancefloor experience ‘Techno in Berlin’ Reality • The Chainsmokers & Sony created a VR ‘Lost In Music’ • Facebook Live recently used by Avicii Live (studio) and EDC (line-up announcement) Streaming • ’s 2017 set was live-streamed in 360 degrees on YouTube • Two DJ-themed Netflix originals launched in August 2016 – documentary ‘’ll OTT Video Sleep When I’m Dead’, and film ‘XOXO’ • Now over 100m Netflix members worldwide • Hardwell launched a fan-focused Facebook Chat-bots & Messenger bot in 2016 – has had 500k users AI • Pacemaker DJ app uses AI to turn a Spotify or playlist into a mix

Source: Industry Press 25

IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS Ibiza 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com E. IMS Ibiza 10 – A Decade In The Industry : USA Dance share now reported, Germany share 3x higher than 2007, UK +1.5%

2007 2016

Nielsen US music report in Dance share 2007 did not report on of track sales ? 5% Dance as a specific genre

Dance share reached an Dance share all-time high in 2016, over of revenue 2.2% 7.0% 3x share achieved in 2007

UK Dance share is now Dance share back above 2007 level after of single sales 15.5% 17.0% a dip in the late

There are now 25x more 25x tracks available on Tracks for sale* Beatport than 10 years ago

Note: * increase in Beatport tracks shown as Jan 2017 compared to Jan 2008 Source: Nielsen / RIAA, BVMI, / BPI, Beatport 27

IMS Business Report 2017 by Kevin Watson, Danceonomics.com E. IMS Ibiza 10 – A Decade In The Industry DJs: average age of DJ Mag Top 10 is lower by 3 years than in 2007 with half now younger than 30

Most popular genre 2007 2016 Trance EDM Average Age 36 33 # < 30 years old 0 5 # of women 0 0 Leading country UK NL

Source: DJ Mag Top 100 DJs INDICATIVE 28

IMS Business Report 2017 by Kevin Watson, Danceonomics.com E. IMS Ibiza 10 – A Decade In The Industry Clubs: three venues are still in DJ Mag Top 10, but all have undergone significant change in 2017

2008 2017 Will reopen as new club ‘Hi Ibiza’ in May 2017

Closed for 5 months from September 2016 to January 2017

Pacha Group sold to Trilantic Capital Partners in February 2017

Geographic make-up of Top 10 has remained largely unchanged: Spain leads the way (3 in 2008, 4 in 2017), followed by UK (2, now 1), 1 in Brazil, 1 in North America, remainder in Asia and Europe

Source: DJ Mag Top 100 Clubs 29

IMS Business Report 2017 by Kevin Watson, Danceonomics.com E. IMS Ibiza 10 – A Decade In The Industry Festivals: three largest Dance Music events have quintupled their capacity since 2008 Main Event Capacity (k) 2008 2017

• 4th edition in 2008 attracted 50k Tomorrowland 50 360 • 360k capacity over 2 weekends Boom, Belgium in 2017, plus 8 ‘Unite’ events

• Vegas event now attracts 6x Electric Daisy Carnival 65 400 more people than in 2008 in LA LA / , USA • EDC events now worldwide

• 70k at 10th anniversary in 2008 Ultra Music Festival 70 165 • Now 165k in Miami and 1m Miami, USA Ultra event attendees globally

• Capacity of 3 largest festivals Total of ‘Big 3’ Events 185 925 increased by 5x since 2008 • Main events now attract 925k

Source: Tomorrowland, EDC, Ultra Music Festival, industry press, IMS Analysis INDICATIVE 30

IMS Business Report 2017 by Kevin Watson, Danceonomics.com E. IMS Ibiza 10 – A Decade In The Industry Equipment: since 2007 DJ Gear sales have grown at the rate of guitar sales in the USA

U.S. Industry Revenue by Product (2007-2014)

• DJ Gear sales increased by +25% 25% from 2007 to 2014 (latest available data) • During this time, sales of ‘fretted products’ (electric % & acoustic guitars and +12% accessories) grew by 12% • Within DJ Gear, Digital DJ controllers account for a third of sales, followed by DJ Mixers and CD Players

Source: NAMM Global Report 31

IMS Business Report 2017 by Kevin Watson, Danceonomics.com IMS Business Report 2017

A. Music Sales & Genres

B. DJs & Live Acts

C. Clubs & Festivals

D. Companies & Brands

E. IMS Ibiza 10 – A Decade In The Industry

F. Industry Value

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com F. Industry Value Final Version 2 Global Electronic Music industry value up 3% YoY to $7.4 billion as positive trends continue

Global Electronic Music INDICATIVE Industry Annual Value • Tracking industry growth over past year, driven by positive trends in all key segments

+3% • Music revenue and Dance share growing 7.4 7.1 ! Streaming subs +60%; Dance over-indexes ! Mexico & Brazil in Spotify Electronic Top 10 $bn ! Dance share increasing in USA & Germany

• Festival & Clubs expanding internationally ! Ultra & Tomorrowland partner events ! Millennials 40% more likely to attend clubs

• DJ & Artists growing earnings and fanbases ! Forbes #4 to #12 earned 4% more YoY 0 ! Double-digit Instagram growth for Top 10

Sources: BPI, Nielsen, Billboard, IFPI, Google, Forbes, Economist, BPI, BVMI, SNEP, PWC, EVAR Advisory, UK Music, FT, Pioneer, CIA World Factbook, electronic-festivals.com, NAMM, , DDMCA, , Mixmag, DJ Mag, Viberate, Beatport, YouTube, Soundcloud, Statista, industry press, IMS Analysis 34 IMS Business Report 2017 by Kevin Watson, Danceonomics.com Want to find out more? Contact us using the info below

Find out more about Contact the author, browse International Music Summits industry insight, join the across the World community internationalmusicsummit.com danceonomics.com

@IMSIbiza @KWdotnet

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IMS Business Report 2017 by Kevin Watson, Danceonomics.com