SFX Entertainment, the "largest producer of live events and entertainment content focused exclusively on the electronic music culture ('EMC'), based on attendance and revenue," went public today in a highly successful IPO, debuting at $13 a share after raising almost $100 million more than it planned to.
SFX is the second crack at music industry domination by the colorful media entrepreneur Robert F. X. Sillerman. His first company, which grew through the acquisition of concert promoters across the country, sold to Clear Channel in 2000 and was spun off as Live Nation in 2005, today the largest live events company in the world. Live Nation's stock has doubled since the start of the year.
Why focus on the raver crowd? One word: dance. The kids these days just can't get enough electronic dance music, and ironically, they seem to prefer above all consuming it (along with other substances) during live face-to-face events. While revenue in every other area of the music industry is flat or declining, the take from concerts has roughly doubled in the last decade. In Las Vegas, as the New Yorker recently reported, the nightclubs with the hottest dance DJs are taking in more money than slot machines at big casinos. SFX focuses both on the club scene and on multi-day festivals both in the States and Europe, like TomorrowWorld, Mysteryland, and the Electric Zoo.
If that last name rings a bell, it might be the one fly in the ointment to the current dance music boom. A 20-year-old and a 23-year-old died at this year's Electric Zoo festival in New York from a combination of MDMA and Molly, the latest in a string of overdoses across the country. It was incidences like these that led to the RAVE Act, passed in 2003, that allowed concert promoters and nightclub owners to be prosecuted for drug offenses and overdoses that took place during their events, substantially harshening the mellow spirit of the original raver scene.
[Image: Flickr user p_kirn]