Dancing Astronaut wrote another editorial describing the big players in the electronic dance music industry and their quest to buy up all of the major EDM companies. Rumours are circulating that Robert Sillerman and Live Nation have set their targets on Insomniac (organizers of all Electric Daisy Carnival events and more), Pacha, Ultra Music, and blogs such as Dancing Astronaut. With the news that both Live Nation and Sillerman's SFX company are joining forces with ID&T to bring Tomorrowland (+ most likely Sensation) to North America we are heading towards a future where only a handful of players may control the vast American EDM market.
Dancing Astronaut paints a rosy picture at the end of the article stating that there is nothing to worry about:
"If and when you hear the news that your favorite festival or nightclub has been acquired — whether by SFX or Live Nation — do not panic. Sillerman and Rapino have been the cerebral forces to define the entertainment landscape as we know it, so it’s safe to trust them with our new-born baby of a movement."
Not so fast. It's still far too early in the game to conclude such an opinion on this acquisition binge of EDM properties. There is still a wide possibility of outcomes that could either strengthen or weaken the landscape as a result of all of this activity. If Insomniac, the company behind such events as EDC, Beyond Wonderland, Electric Forest, White Wonderland, etc, is purchased by either Live Nation or SFX in the future - pay close attention.
Here are two possible scenarios that could happen if Insomniac is bought out:
Higher Ticket Prices
If most of these major festivals are owned by one or two companies then there may be little incentive to continue competing on price. In a landscape of little to no competition, ticket prices could rise much higher. If you control all of the supply of festivals then both Live Nation and SFX have the freedom to set the future ticket prices.
DJ booking fees could stand still or decrease over time
With so few organizations controlling most of the festivals and events across the U.S., the negotiation position of DJs to ensure higher fees might be compromised. In the current landscape, your favourite DJ has the luxury of shopping their live performances to the highest bidder which has elevated the fees and made a lot of DJs rich. In a scenario where all of the major festivals are controlled by one or two players these bidding wars might become a thing of the past as Live Nation and SFX are put in an overwhelming position to set the booking rates as they see fit.
The biggest DJs in the land including Tiesto, Swedish House Mafia members, Deadmau5, Skrillex, Armin, Markus Schulz, and others will not likely be affected as much, as their participation is vital for any festival success. It might be the mid-tier names and future stars that may be impacted. It is unlikely that any booking agent will take the risk of employing strong negotiation tactics against a company that holds the key to so many festivals that are vital to any successful DJ career.
These two possible scenarios may be the reason why Robert Sillerman's SFX and Live Nation are in a race to control the vast majority of big EDM event companies in America. Owning one or two properties might be nice during the EDM boom but by owning most of them will give either player the power to set prices and fees. If they manage to do that without sparking a fan revolt, true fortunes will be made.