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The Global Electronic Music Industry is Now Worth $7.1 Billion

The 2016 IMS Business Report found that industry growth has slowed down, but it has "sustainable wide-scale appeal."

by Alexander Iadarola
May 25 2016, 8:50pm

Photo courtesy of MIXTRIBE on Flickr

There have always been heaving crowds to weave through to get a drink at the club's bar, but lately, it seems like lately they've been getting worse. And it turns out they in fact have, according to International Music Summit's (IMS) 2016 Business Report, which found that more people are going clubbing. Among the finding in the IMS's assessment of the state of the global electronic music industry, the report found that electronic music-related events were the only ones in the US to show a year-on-year growth from 2014-2015, painting a picture of sustained growth in the sector.

Celebrity DJ Pete Tong founded IMS in 2007 "to help implement progressive change in electronic music," and for the last several years they released an annual report on industry trends and figures, both in the US and globally. This year's, written by strategy specialist Kevin Watson, found that although the global electronic music industry growth slowed in the past year, to 3.5% (from $6.9 billion in 2014), the global electronic music industry is now worth $7.1 billion, 60% more than it was three years ago.

The report also found that EDM was expanding into promising new markets in South America and China, that streaming was the fastest growing format globally, and that, in the USA, recent rapid growth looks like it will translate into "sustainable wide-scale appeal." In other words, the EDM bubble isn't so much bursting, as it is bopping along the surface of the water.

Drawing on data the Nielsen Music 360 Report 2015 and the 2015 NAMM Global Report, the IMS business report found that attendance at club events with no specific headlining DJ went up 3%, while club events with a specific headlining DJ went up 1%, and small live music sessions at a club/bar went up 2%. Music festival attendance did not change in this period.

THUMP spoke to senior financial analyst Richard Tullo of Albert Fried and Company over the phone, and he suggested that these relatively small percentages were hard to decipher meaning from without more extensive context than the report provides. "One conclusion I can draw is that maybe there's something going on technology-wise [in terms of a novel kind of functionality, or an app, or something of a similar nature] that's enabling people to find clubs to go to that didn't exist in the past," he said. "Because it's a little unusual to me that a club without a headlining DJ is growing faster than a club with a headlining DJ." There are certainly many apps that are part and parcel of contemporary nightlife.

The report also found that the overall volume of dance music streams grew 33% in the same period, but that its share of all streaming went down. This means that streaming in general grew faster than streaming of dance music specifically.

When it comes to Google searches, electronic music is the only genre to have shown significant growth since 2009. Tullo warned against using Google trend data to imply that EDM is thriving, though. He qualified his hesitance by explaining that Google trends "is a relative momentum indicator and not necessarily a qualitative indicator," pointing out that recent search activity for electronic dance music is only at 90% of where it was at its peak. He said that this to connected to the fact that EDM is growing at a lesser tempo than music at large, per the above streaming statistics. Pop music, meanwhile, has gone up 50% in relative growth in the last month.

In the report, Watson concluded that the recent explosion of EDM growth looks to be translating into sustainable wide-scale appeal, which goes against the notion that the bubble will burst and dispel quickly. The questions over EDM's future have largely been fueled by the recent fall of SFX and the disassembly of Beatport, and a whole lot of discussion about drug deaths at festivals. Veteran electronic acts, most notably Fatboy Slim, have proclaimed EDM will crash and burn, as have Las Vegas club owners who have recently publicly ditched EDM clubnights.

But the report's findings somewhat counter this picture. "In general, looking at that data, it's a consolidating year for EDM," said Tullo. "You've had the loss of a big promoter in SFX, they're making changes to Beatport. At the same time you have music streaming on the rise and that's going to create certain issues for the industry. The good news is that where EDM seems to be losing share on a global stage, long term plays to EDM's strengths. On the music front, they're losing share to pop music, but the overall pie is growing. The second piece of good news is that they're losing share to pop, and ultimately pop fuels EDM."

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