EDM’s Niche “Micro-Brew” Market

EDM scored a big victory the other day, and if there were still doubts about the whether or not it has “officially” made it into the mainstream, they may have just been put to rest. Our industry just got compared to one of the biggest industries in the world: the beer market. This is substantial, and I’m not just saying that as a fan of EDM, beer, and listening to EDM while drinking beer. I'm saying that because it's important to notice when entities like Forbes compare the economic trajectories of the EDM industry with those in other vertical industries. In the article, Ruth Blatt makes a very compelling comparison of the beer market to the EDM industry. 

Like beer, the mainstream EDM market is dominated by large promotion companies. To give some perspective on that, last year our friends from White Raver Rafting pointed to a study done by Langdon and Massive which noted that “the major players in the global festival market achiev[ed] $4.5 billion in sales for 2012,” and that’s of an estimated 15-20 billion dollar market totl for the EDM industry as a whole - including all digital music revenues and streaming! So while the pie continues to grow bigger, mainstream event promoters have taken larger and larger portions of that pie, effectively crowding-out many smaller competitors. This is also what happened to the beer industry in the 19th and 20th centuries.

But with economies of such large scale, it becomes more difficult to be flexible and to consistently find those artists whom Blatt says deliver “music that is more progressive, underground, or otherwise ahead of the curve.” Just like people get tired of the same few types of beer, EDM fans tire of the same handful of musicians - and that’s where the EDM micro-breweries come in. While the big players may have the money and the exposure, it’s the micro-brew EDM promoters with their finger right on the pulse of the industry. They are the ones consistently booking the newest talent at the local spots people are into. By doing so, they hit a sort-of "sweet spot," essentially Blatt's three main reasons they contribute to the growth of niche markets: a taste for the progressive, a quest for higher quality, and the act of consumption as self-expression.

What this ultimately means for both average EDM fans and hardcore music junkies alike is more events, featuring more new artists, in more locations. Basically, the increased competition means more options to choose from across the board. And as an added bonus, this disruption in the EDM industry has forced the large players in the scene to change their value proposition. No longer can they offer the same lineups at the same locations, now they must step up both the lineup and production level at every show, and they must respond and react to the increasing draw of people to EDM festivals. We saw this with EDC moving from LA to Las Vegas, HARD moving it’s growing Halloween show from the Shrine, to the LA Historic Park, to its new home at the Pomona Fairplex, and Ultra’s massive global expansion, just to name a few.

A lot of this is due to the rise in social media which has fueled an exponential increase in the spread of information. Just over the last five years, we’ve seen a tremendous shift like never before where social media has now become THE place many EDM fans go first to look for events in their area. In fact, in an article last year, Yahoo Finance noted that:

Over 2/3 (67%) of EDM respondents report hearing about the events that they attend via social media (vs. less than half -- 40% for other concert goers) and nearly three-quarters (73%) report that seeing friends posting about attending an EDM event on Facebook, Twitter, Instagram, etc. makes them want to attend more (vs. only 36% of other concert goers).

The importance of the latter statistic cannot be stressed enough: people go to the events their friends are recommending. And just like it did in the micro-brew beer market, the power of word-of-mouth recommendations is helping smaller, more agile EDM promoters to thrive and as Blatt puts it: “build distinct local clubbing cultures.”

I believe these niche markets, or those promoters in the “underground” music scene as I affectionately call it, will continue to thrive by providing the alternative to the big events that many people desire. Don’t get me wrong, I love being with 80,000 people looking at amazing lights and hearing music so loud I can’t hear straight the next day as much as anyone, but there is something special about smaller events. EDM.com’s own Taya-Maria El-Asmar points to some of the reasons in her recent article why one might consider going to a club versus a festival. I would build on that by noting the tremendous draw for me personally to small and mid-size events, especially those that create the nostalgia that many people including myself have for the old-skool “rave” days. Just like micro-brewed beers, these distinct “flavors” of EDM culture are very appealing and intoxicating.

And as an example of a micro-brew event company, Bratt points to the Brooklyn Music Festival in New York. I will expand on this by adding the Take Back the Night Crew in Los Angeles. They embody the micro-brew EDM principles listed above, and their New Year’s Day Party - aptly titled “Beats, Bloodies, and Brunch,” - has become one of the day-parties to be at on New Years Day in LA and some say it’s even a viable alternative to going to a festival the night before. A dominant player in LA’s underground niche market, Take Back the Night has helped upcoming LA-based artists such as Orphic, K Mo, Oscure, and others build their fanbases out on a grass roots level by focusing on creating a culture based on good music being played by fresh talent at the coolest hidden venues. Sometimes half the magic is knowing you will only be able to dance in a certain venue once or twice, and the other half are the sunrise silent-disco sets you will dance at while looking at the skyscrapers of Los Angeles and watching them pierce the morning sky. That’s the micro-brew experience you just can’t get with most big event companies. And fortunately for us, it appears to be the growing trend.

So let’s all raise a tall glass and say a few words in honor of our friends, the micro-brew EDM promoters! Thank you and keep up the good work. Bottoms up!

Written by: Mike Teez

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