Bonno van der Putten : SFX Entertainment – ID&T Dances to IPO

SFX Entertainment – ID&T Dances to IPO. Music. Technology. The new music business.

Last week the IPO of SFX Entertainment (under the symbol SFXE) debuted on the Nasdaq marking the 1st public company built on EDM, a milestone many in hip hop craved but none achieved at this level

Since now SFXE is a public company it will have to grow, and that growth currently would have to come from expanding existing markets, entering new markets like Brazil and other countries in Latin America with rising middle class population. In less than 10 years, Brazil's middle class oly has grown by some 30 million people, a staggering figure of people that previously were not consumers at all.

And of course there are the growing web properties such as Beatport. Through managed venues, Beatport and relationships with influencers, new trends are identified and new artists supported, introducing them across the network.

The EMC venues in South Beach, Florida have proven to be a breeding ground for some of the top DJs in the industry while Las Vegas wants to accomplish a bit of the same. Similarly, Beatport serves as an important channel for DJs to gain recognition. In addition to influential charts and other discovery tools, Beatport hosts mix contests and other programs to support aspiring DJs.

That growth is also dependent on the growth of EDM. Having covered a similar growth phase of hip hop in the previous decade, there are a lot of similarities and differences. Given that hip hop didn't peak until it had fully saturated every corner possible and fully jumped the shark, we're still in the initial phases of development with lots ahead including private equity, venture capital and corporate buy-in in the form of brand sponsorships, tv shows, tech startups, new festivals, more blogs, websites and mobile apps, crossovers with other genres, books, movies, collosal business failures, hypes and hysteria. And so forth.

Just become may still have lots of room for growth doesn't mean that SFX Entertainment will grow with it. Acquisitions will now become more expensive at every level of the game. Some people will expect too much and sometimes get it. Acquisitions and partnerships with less tested entities will be required now that much of the top layer has been picked over.


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