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SFX Entertainment Buys Beatport
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| Mach X |
| quote: | SFX Entertainment Buys Electronic Dance Music Site
By BEN SISARIO
SFX Entertainment, the company led by the media executive Robert F. X. Sillerman, has agreed to buy the music download site Beatport, part of the company’s plan to build a $1 billion empire centered on the electronic dance music craze.
Mr. Sillerman declined on Tuesday to reveal the price. But two people with direct knowledge of the transaction, who were not authorized to speak about it, said it was for a little more than $50 million.
Beatport, founded in Denver in 2004, has become the pre-eminent download store for electronic dance music, or E.D.M., with a catalog of more than one million tracks, many of them exclusive to the service. It says it has nearly 40 million users, and while the company does not disclose sales numbers, it is said to be profitable.
The site has also become an all-purpose online destination for dance music, with features like a news feed, remix contests and D.J. profiles. Those features, and its reach, could help in Mr. Sillerman’s plan to unite the disparate dance audience through media.
“Beatport gives us direct contact with the D.J.’s and lets us see what’s popular and what’s not,” Mr. Sillerman said in an interview. “Most important, it gives us a massive platform for everything related to E.D.M.”
Since the company was revived last year, SFX has focused mostly on live events, with the promoters Disco Donnie Presents and Life in Color; recently it also invested in a string of nightclubs in Miami and formed a joint venture with ID&T, the European company behind festivals like Sensation, to put on its events in North America.
In the 1990s, Mr. Sillerman spent $1.2 billion creating a nationwide network of concert promoters under the name SFX, which he sold to Clear Channel Entertainment in 2000 for $4.4 billion; those promoters are now the basis of Live Nation’s concert division.
Matthew Adell, Beatport’s chief executive, said that being part of SFX could help the company extend its business into live events, and also into countries where the dance genre is exploding, like India and Brazil.
“We already are by far the largest online destination of qualified fans and talent in the market,” Mr. Adell said, “and we can continue to grow that.” |
NYTIMES
BILLBOARD |
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| Big Boss |
This dude is buying up everything.
He's buying clubs like crazy in Miami, pretty sure he'll make moves in Toronto too. |
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| Orko |
Reportedly only $50mil for Beatport?
For a site that is properly monetized, and has such a large influence in dance music, that seems too low. |
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| jchung52 |
50 mill does seem kind of low however how much revenue are they pulling in a year? I don't think that much. To make it into top 10 main page is around 5000 downloads I heard.
Not sure if I will like the outcome of new ownership. SFX clearly wants to make it a cash cow on the current trends |
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| feelgood |
| quote: | Originally posted by Orko
Reportedly only $50mil for Beatport?
For a site that is properly monetized, and has such a large influence in dance music, that seems too low. |
Id say its pretty close to its market value. In terms of assets, BP is probably only a few server rooms and a couple of offices. Also, Beatport's profitability is intrinsically tied to the popularity of electronic music/DJ'ing. Which as we all know is currently at an all time peak. The article mentioned 15-17mill in revenue, yet 2mill in losses. So if they arent profitable now, when will they be? |
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| hax-a-million |
| quote: | Originally posted by feelgood
Id say its pretty close to its market value. In terms of assets, BP is probably only a few server rooms and a couple of offices. Also, Beatport's profitability is intrinsically tied to the popularity of electronic music/DJ'ing. Which as we all know is currently at an all time peak. The article mentioned 15-17mill in revenue, yet 2mill in losses. So if they arent profitable now, when will they be? |
clearly SFX thinks they can tweak the model to make it profitable... whether or not that keeps people buying from beatport is another question altogether |
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| Mach X |
We think Beatport is the because we're immersed in it and its relevant culture and scene. Ask some random guy on the street what Beatport is they'll thing it's a shoe.
$50mill sounds about right, you're not really purchasing much more than a business model, some code and and name.
And it IS a niche market...regardless of how cool and massive you think our scene and music is.
I think he bought the name, he can use that name to promote more events, create a production company, sponsorship with labels etc. Pretty much what they're doing now but on a grander scale. Instead of sponsoring the stage or party, they ARE the stage or party.
I think he's trying to monopolize the EDM world with his hands everywhere, could it be a good thing, sure, but it's going to step on people's toes for sure!
There will eventually have to be loyalties and betrayal, alliances etc with labels and clubs and producers etc as this all comes together with SFX having common interests in it all. |
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| The Highroller |
| quote: | Originally posted by Orko
Reportedly only $50mil for Beatport?
For a site that is properly monetized, and has such a large influence in dance music, that seems too low. |
Expert valuation advice right here, lol. :rolleyes: |
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