The business of electronic and dance music has been moving forward since the days of vintage synthetic instruments and post-modern electronic composition. In the past ten years it has made a major impact on the production and distribution of music. While many industry leaders and major corporations were slow to innovative with technology and the Internet, the electronic and dance trade adapted software and new means and targeted directly millions of consumers.

2007 was possibly its biggest year. New acts like Justice, Klaxons and Digitalism became huge success stories with singles on the Billboard top 100 and sold-out tour dates across the globe. Established acts such as Daft Punk and Chemical Brothers sold out concerts in over 30 countries, collaborated with some of the biggest mainstream names, and won Grammy recognition with albums topping the Billboard top 100 (Alive 2007, We are the Night).

There has never been more demand for the likes of 4/4 beats, synth hooks, and sequenced sampling. But perhaps what most people outside of the electronic music business fail to see is the way that this niche market tends to manage itself, taking on a complete DIY outlook on composition, production, promotion, and distribution.

Greater Availability and New Business Arrangements

In the past, dance music was considered more of an obscure find due to the fact that many people outside large metropolitan areas were subject to the near impossibility of finding releases. Delivery problems and high import costs often led to out-of-date and expensive releases. Today however, the industry—which encompasses everything from performers, producers and managers, to labels and licensing companies--is woven together for the most part through the Internet. Everything is accessible 24 hours a day and at affordable prices, not just oversized 12” LPs. This has led to an abundance of artists, labels, and distributors.

In today’s market, old and new business practices co-exist side-by-side. In a traditional manufacturing and distribution deal, the label agrees to put out an artist’s CD, it incurs large costs, and retains control over copyright and promotion. On the other hand, in the novel “360 degree” arrangement, the artist is considered a brand and the contractor is involved in every aspect of the money stream during the entire career. Alternatively, in a licensing deal a label produces a record and distributes it for a limited time in a specific market but rarely invests long-term in the artist.
When looking at the electronic and dance industries, however, the business model is a bit different. Given the way many DJ labels work, profit sharing is not uncommon. This involves a great deal of trust. The label’s sole purpose is to manufacture product and take on its distribution, with the artist receiving all the money and taking on all the promotion; revenue is then divided between the artist and the label. Another common approach taken by many DJs and producers is to handle every aspect of their career, both acting as label, manager, and a distributor of their music, both at shows and online.

In examining these models it is important to note that there are upwards of fifteen-thousand independently owned and run electronic music labels, all managing to produce and release new material within weeks of their last issues. Approximately one hundred new labels are being added every month. This creates a surplus of music. In a recent interview, Jeff Milligan, head of Canada-based Revolver Records, commented: “[T]here were more records released in the world in the past 24 hours than there are minutes in the day to devote to searching…It used to be that a label’s exclusivity would fuel its popularity and sales would increase naturally over time, as the catalog grew.. Now there seems to be as many one hit labels as there are artists.” (quoted in HF.com)

It is important to note, however, that many modern dance and electronic music labels incur very little cost. Creating and producing only requires a laptop, some sequencing software, and a vision. Once the music has been written and produced, it can be easily distributed online either by a label-run website or by one of the hundreds of free distribution sites. Promotion is handled online via e-mails, blogs, postings, and the use of myspace, which is still the most popular way of presenting independent music online.

Marketing and Promotion

The key to survival in the electronic music business is marketing and, especially, promotion. A label must be successful in promoting an artist, or the artist must do it himself. Hype defines the marketplace, and popularity can be explosive. Superstar DJs love nothing more than to spin slamming underground tracks from obscure artists, and the newer the better in this fast paced industry. The overnight success of Sebastian, Luciano, and Deadmau5 are good examples. A vast evolution of online music blogs throughout the Internet has helped too. The blogs inform the reader of new music, collaborations, and remixes by their favorite artists and can provide tremendous promotion and support in launching an unknown act or performer. Site to blog are filter27.com, bigsstereo.com, and syntheticrocks.com.

Another tough tested promotional technique used by dance and electronic labels is to accentuate the importance of visual elements and graphic design in all aspects of their endeavors. Possibly the finest examples of such tactics come from France, with the Parisian labels Ed Banger and Kitsune Maison. Their productions have become fashion statements in their own right and beacons of a new worldwide design culture. Banger and Kitsune have been responsible for some of 2007’s biggest newcomers and hottest sellers including, Justice, Digitalism, and MSTRKRFT --and a plethora of other underground remixers, producers and performers.

It is considered business savvy as well as fashionable in today’s dance market to collaborate with other artists in order to present material in new ways. It also makes economic sense. Remixes, compilations, re-edits, re-works, mixes, and re-arrangements to current catalog tracks provide significant compensation to producers and DJ’s alike, who seek to strike alliances with other labels in similar cities or with similar musical repertoire. A notable collaboration was Kanye West’s smash hit “Stronger”. This is a re-work of Daft Punks’ “Harder, Better, Faster, Stronger” which made Billboard’s Top 100 back in September. “Stronger” drew the attention of industry leaders, who appear to have been taken aback by its sudden impact.

Sales and New Products

Recorded music sales are not as critical to the market, although Music Week already reported in 2006 that dance singles in Europe were outselling overall singles by 5% due to the large base of now ‘digitalized’ consumers and wide avenues for online distribution. Record sales overall pale in comparison to those of international mainstream acts. Yet many mainstream acts vie for dance hybrids, such as multi-platinum Hannah Montana’s Dance Party 2 (Disney), and Groove Armada’s Soundboy Rock (Sony BMG).

While upwards of 80% of the online music market is owned by Itunes, most electronic music is distributed and sold through Beatport.com, an online music heaven for DJs, producers and music enthusiasts alike. Having seen the tremendous advantages of a booming electronic market, Beatport launched their online store in 2004 with the idea of “allowing users to access the world of club music through secure, legal, hi-speed, high quality downloads in MP3, MP4 and WAV formats on a pay per download basis from an impressive library of the world's leading independent labels.” (Beatport.com) It distributes 375,000 songs from 7,500 different labels and has had to cut down its acceptance of new labels.
Beatport has recently setup a new venture, Beatsource.com, which will serve Hip-Hop downloads targeted for Hip-Hop Djs.

It is also important to recognize that the elctronic music industry is fundamentally built around live performance. For instance, on-demand DJ’s such as David Guetta and Sander Kleinenberg can request as much as $20,000 to play a four hour set at a club, and now-established acts such as Chromeo or MSTRKRFT manage to sell out venues in most cities they tour in: “The demand for this type of music and artists is very high in the US”, says a spokesperson for White Room, a prominent ‘indie-electro’ nightclub in Miami, “especially given the few venues for avant-garde electronica compared to Europe”. Indeed, the European club scene is still the dominant form of this genre.

Finally, the production and performance of electronic and dance music goes hand in hand with the industry of music products. It is important to re-create sounds of the 80’s, 90’s as well as today’s. Music Technology has taken a gigantic leap forward and does not seem to be stopping any time soon. Every month numerous publications such as Remix, MixMag, Electronic Musician and others round up the best of the best in new sequencing software, synthesizers, microphones, vocoders, digital effects, turntables, mixers, video mixers, consoles and PA systems in hopes of luring thousands of consumers to acquire and manipulate these various forms of innovative musical technology.

Possibly the finest example of a contemporary product targeted directly at the electronic and dance culture is the Pacemaker. The Pacemaker, designed by the Swedish instrument company Tonium, is a handheld and portable music console that allows the user to mix and interact with music just like a professional DJ. The device works like an MP3 player but has hand-held capability of any functional Dj setup, i.e. a music library, two turntables, a mixer, effects, and loops. The Pacemaker.net site claims it is the first product that truly brings DJ'ing to the masses.
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The electronic and dance music business is opening up exciting avenues for musicians and the music business. It has not reached a critical mass yet, but it is likely to affect established business norms and confirm a trend towards self-sufficient business practices. The musical judgment may not be as kind, though, if it brings about only an insurgence of distasteful, repetitive, and derivative product.