by : Featured Articles, Music and Society, October 2013

Money, Music, and Molly

Money, Music, and Molly

The business of electronic dance music is undoubtedly booming. Worth globally $4.5 billion1, large-scale electronic dance music festivals often exemplify the industry’s increasing success. Dayglow, Tomorrowland, Ultra Music Festival, and the Electric Daisy Carnival are just a few of the numerous festivals that occur worldwide bringing over a million attendees annually. Typically spanning multiple days, these festivals feature famous DJ’s, florescent costumes, beaded hula-hoops, psychedelic laser shows, and relentless dance parties that continue into early morning. They are not only an attraction for thousands of patrons, but for corporate sponsors and Wall Street investors as well. This billion-dollar industry offers potential profits that are unquestionably massive.

Electronic music festivals offer corporations an opportunity to reach the genre’s youthful and tech-savvy fans by providing an environment ideal for branding. Although branding is nothing new to the world of music, most branding deals are currently contracted with artists. Examples of this include Pepsi® with Beyoncé and Calvin Harris or Absolut Vodka® with Swedish House Mafia. However, name brands are beginning to take notice of the huge market accessible through electronic music festivals. This year the Electronic Zoo festival was sponsored by several big names including Vita Coco®, Coors Light®, and Hi-Chew®.

Festival Deaths

However, recent deaths that illustrate the dangers of festivals may be warding off present and potential investors. Undoubtedly scary, the list of deaths at music festivals due to overdose is rapidly growing. A 20-year-old male overdosed July 14th at a rave on Governor’s Island, New York. Late this August, a female University of Virginia student overdosed at a rave in Washington D.C. One person died and two more were hospitalized at a recent Zedd show at the House of Blues in Boston2, and only days later, two more deaths attributed to overdose occurred at the annual Electric Zoo Festival in New York City. On September 15th, there was yet another death at the Defqon music festival in Sydney, Australia3 where fourteen more were hospitalized that night as well.

The club drug MDMA, more commonly known by its street name “molly”, has been named as the cause of death in all cases. MDMA causes hallucinations, enhancement of senses, and euphoria; it also causes cardiac arrest, dehydration, seizures, and death. Created in Germany during the early 1900s, the substance traveled overseas to America decades later but did not become popular until the early nineties. Overtime MDMA fell out of fashion, but has recently made a comeback. More than 50 percent of patients admitted to emergency rooms for reasons having to do with MDMA are apparently between the ages of 18 and 20. These statistics illustrate molly’s increasing popularity with today’s younger generation, ages sixteen to twenty-five, in particular. Molly is undoubtedly coming back into style with today’s youth.

Molly’s Impact

Hosts of these electronic dance music festivals have had to respond sternly in reaction to these deaths. The House of Blues in Boston closed its doors for several days while a police investigation occurred, the last two days of New York City’s Electric Zoo Festival were canceled at the demand of the NYC Police Department, and a drug sting was carried out at the Defqon festival in Sydney, Australia. Not to be taken lightly, these deaths represent not only lost lives, but to the venues that host these events, lost profits as well. At as much as $300 per ticket, cancelations due to overdoses and other drug related controversies can cause losses in the millions. The website for the Electric Zoo Festival stated that they would be making full refunds to those who had purchased tickets prior to the event’s cancelation. At $179 a pop, that cannot be good for business.4

This is also bad news for SFX Entertainment, a new company that profits from media deals and corporate sponsorship of electric dance music. SFX Entertainment intends on making its initial public offer just weeks after these festival related deaths. Could these recent drug deaths threaten the livelihood of electronic festivals and the companies that profit from them?

 

On September 26, SFX Entertainment announced the terms of their I.P.O. According to their filing with the Securities and Exchange Commission, SFX plans to make their initial public offering of 16.7 million shares just weeks from now. Each share will be priced between $11 and $13. This puts the value of the company at a colossal 1.1 billion dollars.5 The I.P.O is part of the company’s plan to raise $300 million, which will go towards establishing and acquiring concert promoters. SFX is making moves in order to contend with Live Nation and AEG, its top competitors. The company has already spent half a billion dollars acquiring numerous electronic music companies including Australian event promoter Totem/OneLove, German festival promoter iMotion, Miami nightclub managers MMG, and even the producer of Electric Zoo Festival, Made Events. However, these recent deaths are causing investors to question the reliability and overall profitability of the electronic dance music industry. In his interview with Forbes, SFX CEO Robert Sillerman slyly avoided questions about the profitability of his company. “The last thing we’ll be thinking about is margins,” Sillerman told the magazine. “That’s not the way I view the entertainment business- I view it as an art, not a science.”6

The Context

Many blame this spike in Molly related deaths on the recent resurgence of electronic dance music. After hearing so many references to molly in recent chart topping hits from celebrity artists such as Madonna, Kanye West, Miley Cyrus and many more, one can only wonder if it is a coincidence. These artists have certainly helped molly find its place back in today’s popular culture. However, many experienced festival goers have stated that drug use and the dangers associated with music festivals is nothing new. Their defense lays in the fact that MDMA is one of the least fatal drugs available – the danger of its use mainly lies in immaturity and inexperience. A 2011 BBC report stated that out of 500,000 yearly users, there are only an average of 27 deaths in the U.K attributed to molly overdose. Fans of the genre say that the media is singling them out; that the genre of electronica has no specific correlation with the recent occurrence of overdoses. So the question becomes, are artists influencing the phenomenon or just documenting it?

 

Undoubtedly, the I.P.O of SFX Entertainment has caused the media to bring extra scrutiny on electronic dance music festivals and the role they may have played in the deaths. “The scrutiny that this is going to come under because of the stock market deal with SFX, it’s like a magnifying glass that’s unfair,” stated manager behind Swedish House Mafia, Amy Thomas. This has put added pressure on SFX to address both the physical and economic safety issues of electronic music. Sillerman stated that he is committed to providing a safe environment at music festivals. He also noted that the electronic music scene has evolved from the rowdy scene of raves to the professional world of corporate sponsored festivals. SFX declared the recent deaths at Electric Zoo as possible “risk factors” in their recent filing with the SEC. SFX plans to acquire ownership interests in Made, which produces Electric Zoo. These consequences relating to drug overdoses may also make it more difficult for SFX to obtain or retain sponsorships, lower consumer demand for their events, and subject the company to liability claims. Profitability and stock prices would take a hit.7

Countermeasures

Some have actually used the festival scene as a platform to promote safety and provide health guidance. DanceSafe, a non-profit, which provides educational information about drug-use and its dangers, is working with several festivals such as TomorrowWorld, an Atlanta based festival which partners with SFX. SFX has even appointed a surgeon with experience in “comprehensive medical coverage for large-capacity venues” to its board of directors in an attempt to appease potential investors.

Undoubtedly, festivals will be taking heightened security precautions. Almost all major festivals have to comply with required state law regulations by having first aid tents on site, security searches, and no-tolerance drug policies, but one can only wonder how effective these measures are with the news of so many recent overdoses. However some festivals are already making it very clear that they will be taking their new heightened security measures very seriously. This was apparent at the Boston Calling Festival early September where twenty-one drug related arrests were made. Many festivals and promoters alike are taking the initiative of joining forces with safety organizations, like TomorrowWorld with DanceSafe.

A debate in the dance music world has recently emerged between those who believe that the best way to advocate safety at festivals is recognizing drug-use and those who encourage abstinence.8 Believers in acknowledging drug-use feel it allows for open communication, education, and other harm-reduction methods. However many venues will not even entertain this idea, sticking by their strict policies of having zero-tolerance for drugs. These venues simply reject the idea of involving non-profit organizations like DanceSafe, which focuses on education rather than abstinence. This is reasonable when considering the Illicit Drug Anti-Proliferation Act. Passed in 2003, the legislation states that promoters can be fined (up to $250,000) or even arrested if they know about drug-use at their event and do nothing about it.

End Note

Molly and its perils will not stop fans from flocking to enjoy the music culture they love, and EDM festivals will likely continue to be worthwhile for corporate organizers, participating sponsors, and talent alike.  Talking to Rolling Stone at the 2013 Boston Calling Festival, Diplo could say that drugs had always been a part of club culture and that raves in the woods would always be popular with kids: pointing fingers at a festival did not help[i]. He is not right, really. Large public events like these have more potential for serious damage to life—and tragedies, when they happen, will hurt long-term profits and reputations.

 

By India Thomson

 

Endnotes

1. Sisario, Ben, and James C. McKinley, Jr. “Drug Deaths Threaten Rising Business of Electronic Music Fests.” The New York Times. N.p., 9 Sept. 2013. Web. 1 Oct. 2013. <http://www.nytimes.com/2013/09/10/arts/music/drugs-at-music-festivals-are-threat-to-investors-as-well-as-fans.html?pagewanted=all&_r=1&>.

2. ”Club Drug ‘Molly’ Taking a Toll on Electronic Music Party Scene .” NY Daily News. N.p., 28 Sept. 2013. Web. 01 Oct. 2013.

3. ”Reveller Dies, 14 Hospitalised after Defqon Dance Music Festival in Sydney.” - ABC News (Australian Broadcasting Corporation). N.p., 15 Sept. 2013. Web. 01 Oct. 2013. <http://www.abc.net.au/news/2013-09-15/drug-link-to-man27s-cardiac-arrest-death-at-sydney-dance-party/4958858>.

4. Winsor, Morgan, Chris Kokenes, and Emma Lacey-Bordeaux. “Electric Zoo Music Festival Canceled after 2 Deaths Blamed on Drugs.” CNN. Cable News Network, 03 Sept. 2013. Web. 01 Oct. 2013. <http://www.cnn.com/2013/09/01/us/new-york-music-festival-canceled/index.html>.

5. Stynes, Tess. “SFX Entertainment Unveils Estimated Terms for IPO of 16.7 Million Shares.” The Wall Street Journal (n.d.): n. pag. WSJ.com. 25 Sept. 2013. Web. 30 Sept. 2013. <http://online.wsj.com/article/BT-CO-20130925-711964.html>.

6. Mac, Ryan. “SFX Entertainment To Take Electronic Dance Music To Wall Street With IPO.” Forbes. Forbes Magazine, 28 June 2013. Web. 01 Oct. 2013.

7. Billboard Staff. “SFX Sets Terms For IPO, Proposed Market Value Puts Company at $1.1 Billion.” Billboard. N.p., 26 Sept. 2013. Web. 02 Oct. 2013.

8. Mason, Kerri, and Zel McCarthy. “Dancing With Molly: The EDM Community Has an Honest Conversation About Drugs.” Billboard. N.p., 20 Sept. 2013. Web. 01 Oct. 2013. <http://www.billboard.com/articles/columns/code/5719296/dancing-with-molly-the-edm-community-has-an-honest-conversation-about>.

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  1. Very interesting analysis— we recently reached out to our community of artists in NYC to get the scoop on the rise and fall of local festivals. We made this little mini documentary, including interviews with Central Park Summer Stage Art Director and CBGB Festival Co-owner—would love to know what you think urban musicians can do to save festivals! http://www.youtube.com/playlist?list=PL4nfuvxE4gbRIJ-xaeodKCh0w8ruCWt6B

    • Sorry for the delayed response! I checked out your mini doc, it’s absolutely wonderful! I think that festivals will always survive due to their huge money making potential. However, I do think that a “zero tolerance” policy is the wrong approach.

  2. Nacnud Nosmoht says:

    Interesting article. It’s such a shame that the promoters seem to be forced to take a “zero tolerance” approach regardless of whether this is actually the best way to keep kids safe.

  3. Along with the regicide of the all powerful “record
    company”, the overall approach as to how music will
    be promoted and sold has been completely overturned
    as well. You can either go with all of the same type or mix and match.
    But the difference between this field and other show field is that
    the she-males in this cruise are all restaurant waiters.

  4. queen says:

    music industry is what i am woking to be in

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