It was out there in the ether, Stephenson said over a booming speaker at the Delano. This business was getting so big, but it was so fragmented. There was no central place where brands and advertisers can connect with the audience.
For some in the world of EDM, Sillermans investment is a sign that the music has arrived. Whoever pulls the whole thing together is going to stand strongest, says David Grutman, one of the owners of Miami Beachs MMG. Were a growing company, and one reason we wanted to partner with Sillerman is it gives us access to a lot more stuff. I would love to have a stream of marketing dollars from corporate America.
The marketing money has already started to flow. Ultra featured VIP packages sponsored by Heineken. Tiesto has a clothing line with Guess, and Avicii, another superstar DJ, with Ralph Lauren. But the EDM world is still largely focused on selling blissed-out musical escapism, whether during days-long festivals or DJ-powered nights. The changes Sillerman brought to the concert world led to much higher-priced tickets and even higher-priced VIP packages, a glut of advertising becoming part of the concert experience, and corporations sponsoring the rockers who once symbolized cultural rebellion. Teens and 20-somethings tend to be more tolerant of marketing, as long as it is clever and unobtrusive. But will a more profit-driven corporate model fit with EDMs anarchic, free-spirited ethos?
Dance music has always been an underground subculture, says Ben Sisario, who covers the music business for The New York Times. Even though its gotten very popular, it doesnt have the same values as the mainstream music industry. If you go to Electric Daisy, the brands are the festival itself and the DJs. You dont see American Express presents [star DJ] Deadmau5. I think it will be difficult to introduce that into that whole culture.
Sillerman, who is still shopping for EDM businesses he will not name, indicated the opportunities might lie more in tapping into the way millions of EDM fans bond over the music. Theyve demonstrated a love for the music and for each other, he says. Facebook, Twitter, all that peer-to-peer sharing is in their DNA.
My question would be how would you stay connected to them, but not just to sell more tickets How do you create new opportunities for fans to enjoy whatever it is that connects them to this music?
Whereas Sillerman is looking for manna from the masses, dance clubs in Miami Beach have tapped into a more elitist and enormously lucrative side of dance music for years. In the mid 90s, Eric and Francis Milon broke from the standard gay and alternative dance palaces with The Living Room, a club centered on exclusive VIP sections where admission was based on the ability to pay for high-priced liquor. Since then, the Milons, with partners Mitchell Robinson and Roman Jones, have taken that model to stratospheric levels with The Opium Group, which owns big dance clubs Mansion and Cameo and the more exclusive Mokai and SET, a Lincoln Road showcase that reopened Friday after a glitzy redesign.
News reports earlier this year had Sillerman buying Opium along with rivals MMG, but the deal fell through this month. Sillerman would only say that things came up which made us think it would be best not to continue, although he did not rule out a future deal.