Andrew Edgecliffe-Johnson 01/23/13 Financial Times
Sony Music has made an undisclosed investment in Ultra Music, the electronic dance music label behind DJs such as Kaskade, deadmau5 and Steve Aoki, hoping to capitalise on the music industry’s fastest-growing global genre.
Artists including Skrillex, Swedish House Mafia and David Guetta have brought EDM into the mainstream, driving increasing revenues from live events, digital streaming and online videos in a market where CD sales and digital downloads are low compared with rock, pop or country music.
Seth Goldstein, who raised venture capital backing for a dance music news site called DJZ.com, estimates that annual EDM revenues, including events and merchandising, are about $4bn. Last year Robert Sillerman, the entertainment mogul, bought dance promoters Donnie Disco and Dayglow Productions, and Live Nation bought Cream Holdings and Hard Events.
Patrick Moxey, the Ultra Music president who will become president of electronic music for Sony Music, said Ultra’s revenues had been growing at about 20 per cent a year to $30m last year, in stark contrast to a broader recorded music market that has seen sales halve in a decade.
Ultra’s YouTube channel has more than 1m subscribers and attracts more than 100m views a month. This year it will produce about 100 music videos, Mr Moxey said.
EDM “has been bubbling beneath the surface for a long, long time,” Mr Moxey said, noting that when he founded Ultra in 1996 it was difficult to persuade radio stations to play dance music. Now, “dance music is a global language. A dance record sounds just as good if you’re in the Philippines as it does in the UK on Radio 1.”
Big companies’ growing interest in the genre has raised concerns about a bubble. “EDM has turned into a massively marketed cruise ship, and it’s sinking fast,” deadmau5 wrote on his Tumblr page last summer, bemoaning the use of “the same old pop business/marketing models” to cash in on its growth.
“A lot of good companies are piling in and there are going to be some mistakes,” said Mr Moxey, who learnt to DJ from Joe Smooth in Chicago. “I don’t think it’s as easy as pushing a button and all of a sudden you’re going to put an electronic artist on tour in Buffalo, New York, and fill a stadium.”
Ultra had been approached by all the major recorded music groups, Mr Moxey said, but he praised Doug Morris and his executive team at Sony Music. “They very much want to be in this space because it’s exploding,” he said, adding that they could offer the company marketing expertise and an international distribution networ