(Hypebot) – Following its recent bankruptcy, SFX Entertainment has been forced to put its subsidiary (and dance music industry giant) Beatport up for auction. Here we speak with the people at Beatport about the current state of the newly independent company and where it's headed in the future.
Guest Post by Peter Kirn of Create Digital Music
The media landscape is changing, from Apple moving to streaming and adding content on Apple Music and Apple TV, to SoundCloud adding paid subscriptions and signing deals with majors. Meanwhile, the biggest player in dance music, Beatport, is about to be untethered from the EDM conglomerate that bought it.
SFX Entertainment is putting Beatport up on the auction block, with the sale date set for May 3. (SFX first acquired the company back in 2013 for $50 million, then launched streaming in 2014.) For now, that has no impact on you: Beatport is up and operating normally, labels are getting paid, and so on. It just means new ownership and freedom from SFX, very soon – and meanwhile, the company is operating independently.
SFX had a sprawling vision for Beatport and its other purchases. As I put it in December 2014, the idea was all about synergy. SFX was going to own the festival, the ticketing, the site you visited to learn about the artists, even things like the agency building an app you used at the show or that did visuals onstage. So, what went wrong? Well, the short version is covered by Billboard in their February analysis of the SFX bankruptcy filing. Losses at the festivals racked up, and the brands and advertisers who were supposed to deliver much of the new revenue never really materialized. The sprawling multi-faceted agency structure SFX devised lost money and created confusion, and acquisitions like Beatport seemed to do worse under SFX ownership than before. There are questions about how SFX implemented its plans, but there’s also a real sense that they were pointed in the wrong direction to begin with.
With controversy and allegations of mismanagement swirling around SFX brass, I think most producers will find the Beatport sale to be good news.
Revealed in those bankruptcy filings, Beatport did lose money, too. (CDM asked why that was; see the answer below.)
But there’s a lot of reason to think Beatport is valuable to a would-be buyer – as it is to many of us making electronic music. There’s simply no other property that provides what Beatport does for its particular niches. The combination of streaming with a store, the deep label catalog and navigational tools, the Beatport Pro desktop client and DJ software integration, the mobile apps – Beatport is more ambitious in what it provides than any rivals. And the core assets at least have been big revenue centers not only for Beatport itself, but for labels – including many tiny labels – that sell on the store.
Since the fall, the site has already been seeing some under-the-hood changes intended to improve the experience for users. I spoke to a Beatport spokesperson to find out what has changed and what they’re working on – and what this sale may mean for you. None of this can answer what will happen following the sale, but it does provide some picture of the state of Beatport today.
CDM: Can you explain to our readers what happens now that SFX is selling Beatport? There are a defined number of buyers now that have signed NDAs? (I know the identity of the buyers, in turn, can’t be indicated.) What happens if they don’t find a buyer?
Beatport: We’ve been contacted by, and are in discussions with, numerous companies interested in Beatport’s complete platform (store, streaming, video, etc.). The level of interest speaks directly to the value of Beatport and makes the chances of not finding a buyer highly unlikely.
CDM: What will happen on Beatport the site during this process?
Beatport: The site will continue to be fully supported. Nothing is going to change as a result of the sale process.
CDM: Payments to labels I understand are now back on track. Those should continue without issue during the sale?
Beatport: Yes, the sale process has no effect on label payments.
Ed.: Beatport did not respond to CDM’s request for comment as far as the payment delays last summer. However, we are assured that payments have been on schedule since then and continue to be.