EDM: the End of Dance Music? 4/8/2013 5:26 AM
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EDM: The End of Dance Music? 4/8/2013 5:26 AM By: John D. Langdon Chairman, Massive Enterprises, LLC DJ SlingR, Kalm Kaoz Contributors: Jennifer C. Lai, CEO, Massive Enterprises, LLC Nathan L. Filby Creative Director, Massive Enterprises, LLC DJ Filby, Kalm Kaoz We the people… Who love electronic dance music... Change is coming. The only guarantee in business today is disruptive, technology-driven upheaval, and change is now upon us -- lovers of dance music -- and those who profit. A marked moment occurred two weeks ago. The wind has been at the electronic dance music (EDM) industry's back since inception. The sun-drenched, joy-filled, never-ending days of euphoric bliss… continually dancing, one day… to the next… with money… real money… rolling in. If, perchance, this has caused a mental malaise and a comfortably numb state, wake from your dream and listen clearly. Mr. Robert Sillerman's, a New York City private equity investor, entrance into the EDM scene foretells many things: who will win, who will lose, and is an illustration of how very smart people make money, while teetering on the precipice of chaos - - technology driven, constantly morphing, chaos. And to the dear house music fan: fear not, for our love is pure, our hearts big, and our wallets dictate the answers. When, in the course of events and festivals, does it become necessary for electronic music fans to declare a history of repeated injuries to the American public and question powerful individuals’ motivations and their potential impact on something so dear, and dearly loved by so many? Is it important for EDM fans to challenge the powerful, and likely suffer slings and arrows of misfortune, but thereby oppose these forces and potentially save EDM as we know it? WWW.MASSIVE-ENTERPRISES.COM | EDM - THE END OF DANCE MUSIC - BY JOHN LANGDON 1 of 13 Or are the recent major headlines, introduction of new players, and big deals in EDM simply the nature of things? Merely the market acting efficiently, rationalizing excesses, creating a healthier market that is in the offing -- regardless of any individual's actions? In other words, if we are to strike out against misfortune, against whom do we strike? Who is the enemy in this battle? Or rather, is the enemy elusive, indeterminate, and a function of macroeconomic certainty with no individual or institution to blame or fight? Perhaps the answer now is simply to understand, and upon understanding, act. Based upon prognostications proved true time and time again, is the lesson simply to first understand, and then prepare for market disruption, technology driven upheaval, and the classic maturation of robust markets? As I fly home to LA from Miami after attending Miami Music Week ("MMW," formerly known as "WMC," a congregation of EDM professionals formed to create awareness and build relationships) and Ultra Music Festival (the number one global music festival event held in Miami, FL) and metabolize my experiences from the previous week, I'm left contemplating the current state of affairs of the electronic music scene and am compelled to write, speak, and rally. While on the plane preparing to draft a thesis on the state of the industry, a soft-spoken young man introduces himself to me after overhearing a dialogue between me and my partners. He introduces himself as an electronic music producer who just finished a new album. “Will you listen to my tracks?” he asks. We find out later that he is a freshman at Stanford studying computer science. I think to myself, “this kid is brilliant,” and probably a production mastermind with deep understanding of DAWs – digital audio workstations such as Ableton Live -- computer interfaces upon which one can create studio quality music while sitting in a dorm room, drinking a beer, wearing no more than pajamas. Is the existence of this bright young man -- who considers himself first and foremost a musician, rather than the brilliant Stanford scientist that he is -- a fundamental data point? This may indeed be the most important statistical data point gathered from my trip to Miami, dwarfing anything learned or experienced at Miami Music Week or Ultra Music Festival. My unadulterated love of electronic dance music -- coupled with 20 years of experience on Wall Street as a private equity investor at firms ranging from Platinum Equity to Kohlberg & Co. as well as serving on the boards of companies such as Rauch Industries, ThermoView, Vitality Foodservice, Siemens Laserworks, Arborcraft, H.L. Lyons Companies, and International Wholesale Tile -- provides me with a unique perspective to ask questions, to add to the current dialogue, and express queries and concerns regarding the potential perversion of the EDM music scene. I've executed over $1 billion in transactions, buying businesses from cruise ship companies, to steel manufacturers, and Florida-based amusement parks as a "private equity" WWW.MASSIVE-ENTERPRISES.COM | EDM - THE END OF DANCE MUSIC - BY JOHN LANGDON 2 of 13 ("PE") investor -- a fancy term for buying private companies with 20% to 40% down in equity, borrowing the rest from a bank. Previously known as leveraged buyouts ("LBOs") before the term became publicly derided, the finance industry changed the term to “private equity” for PR purposes after the debacles experienced with LBOs in the early 90s. For 20 years, I'd review and consider 1,000 companies for purchase each year, spanning virtually every industry in an effort to acquire just one to three these deals per annum. This background provides me with a broad and analytical approach to the understanding of businesses and the nature and evolution of markets. I retired from PE 3 years ago, unhappy and disillusioned by the hunt. I retreated to my first love, music. Via the internet, YouTube, and various online DJ and production schools like Dubspot and Sonic Academy, I taught myself to DJ and produce, out of love, and out of the need to do something that was healthy and fulfilling. Besides, everybody is a DJ nowadays, right? You should see my 82 year-old mother, she’s super dope! Three months ago, my dear friends Jennifer Lai and Nathan Filby, the COO of TapouT Films and DJ Motoe Haus, an accomplished music producer with 15 years in the game, respectively, assured me I'd accomplished much in my learning and that we should form a team and a business to enter the EDM market. At the time, to some it seemed absurd and an act of madness, but “what the heck,” I thought. Why not hope for a spell that a retired investor, film executive, and an accomplished musician could become artists and make music together, while building businesses in an industry for which we have nothing but pure love. Thus, we formed Massive Enterprises, LLC, and several subsidiary companies, including Massive Decks (a record label), Massive Merchandising (an EDM-related merchandising business, sourcing headphones and other innovative industry-specific products we think are cool directly via proprietary relationships with manufacturers), Massive Advisors (an advisory firm positioned to provide business advice and counsel to the industry), and Massive Festival Management (a management company principally engaging as an intermediary, acting on behalf of both American Indians and the entertainment industry as a whole, representing sovereign Native American nations in their efforts to bring forth quality festival and entertainment events). Finally, as the Blues Brothers said, "we put the band back together," and formed an electronic dance music group and brand known as Kalm Kaoz. Specifically, Kalm Kaoz is an electro-driven DJ and producer duo that represents liberation and a constant effort to bring magical, epic EDM moments to people that, like us, need those moments of peace and joy as refuge from the real world. Silly perhaps, but done with pure intention. The combination of my business experience, talented partners, and a never-ending drive to deeply understand the EDM space -- from music production to festivals, and macroeconomics of the industry -- arms me with a rare and unique perspective, and possibly a vantage point, that WWW.MASSIVE-ENTERPRISES.COM | EDM - THE END OF DANCE MUSIC - BY JOHN LANGDON 3 of 13 can provide insights, music, and hopefully provide a living for me and my gang of misfits. We went to MMW/Ultra with a few business-related opportunities with seasoned professionals in the space, candidly hoping they'd perhaps hear our music. It seemed a better strategy than throwing fliers all over South Beach and adding to the litter on the street, increasing the white noise. Instead, we listened, learned, and absorbed the wild business gyrations occurring in the EDM market first hand. And so, again, I feel compelled to write and hope these musings of mine are of some worth to a market that we adore. Here is my effort to shine a light on the current state of play in the industry and the nature of circumstances surrounding profound moments in EDM history -- from Swedish House Mafia's "final tour," to Afrojack's major record deal signing, and Mr. Robert Sillerman's entry into the electronic music scene through his company SFX’s recent acquisitions (Beatport, Sensation White, and Tomorrowland) -- and to facilitate a dialogue concerning the fate of our beloved electronic dance music. Whether most fans realize it or not, a major shift has begun in EDM. Given my background and recent experiences, it seems worthy a time for an open, honest, and direct dialogue. The intent is to understand what the second generation of the EDM market will look like and the consequent impact on artists, fans, festivals, labels and the genre as a whole. These high-water marks strongly suggest the market has topped.