What If DJs Buy Back Beatport?

Remember when record stores were staffed, owned, and run by people who were first-and-foremost passionate about the music? What if later this month, the electronic music world went back to its roots, and a confederation of DJs, labels, and producers teamed up to buy back Beatport from the ashes of Robert Sillerman’s SFX and run it as a community resource? Read on and imagine how this could happen – and what might change in Beatport’s future.

DJs Buy Back Beatport From SFX Firesale

What if DJs bought Beatport?

(New York, NY) April 30th, 2016 – In a court reviewing bankruptcy proceedings for SFX Entertainment, a loose conglomerate DJs and artists around the world successfully had their bid approved for purchase of Beatport – a former SFX subsidiary that focuses on the sale of electronic dance music to DJs. The DJ-based conglomerate successfully crowdfunded over $60 million in a community effort to restore the asset back to – in their words – the “rightful owners”, the DJs, producers, and labels that are behind the music sold on the store.”

The preceding news headline is fictitiousbut is it that crazy? During the month of April, SFX Entertainment is soliciting offers for Beatport and all of its assets as a part of the last-gasp bankruptcy proceedings of the corporation. SFX filed for Chapter 11 bankruptcy just two months ago in February, was removed from the New York Stock Exchange, and now has to get rid of about $300,000,000 worth of debt. In the last two weeks, founder Robert Sillerman stepped down as CEO and 50 employees at SFX’s New York HQ have been given 90 days notice.

Originally acquired for $50 million by SFX back in 2012, Beatport has managed to hold onto a near-complete dominance as the main online music store for DJs. But as this asset selloff starts to unfold, we’re left wondering (as you might be):

Who Will Buy Beatport? What Will They Do With It?

Corporate Takeover By Music Moguls

We do think that realistically, another major player in the music industry is most likely to be able to execute the financial, legal, and logistical challenges of buying Beatport. There are a few main things that any company buying the DJ music store would have to consider:

  • Cash Money: We know that SFX originally paid $50 million for Beatport – so odds are pretty good that will be a “starting place” valuation for any offers that are coming it.
  • Cui Bono? Latin for “To whose profit?” – essentially, who stands to gain the most from taking over the company? Some companies might see the ability to shut down Beatport as a very valuable endeavor, while others could carefully attempt to integrate the user base into their own platforms. Some companies might want the actual library, distribution rights, and label connections from Beatport to better position themselves as a streaming service.
  • Failure Is Always An Option: Just because you buy a company doesn’t mean that the users will do whatever you tell them to. Ultimately this is the biggest challenge – if a major corporation takes over Beatport and the users aren’t happy with what happens to it, they could very easily point their web browsers to Juno Download or Track It Down instead.

There are a few companies that would check the boxes on each of these items – from larger labels like Sony, Universal, or Warner Music – to companies that are already in the business of selling and distributing digital music, like Apple or Amazon.

But remember the historical lesson of record stores in the past – just because you have the backing of a major corporation doesn’t mean you’ll have a model for success in the future. Independent record stores like Amoeba Records still exist – but when was the last time you heard someone mention shopping at Tower Records, Sam Goody, or Virgin?

There’s also the option of private equity firms buying up Beatport – as we’ve seen happen to other companies on the hardware side of the DJ industry, specifically with Allen & Heath and Pioneer DJ. An influx of cash from a private equity group would potentially make a big difference in day-to-day operations as well as advancing long-term projects.

If “The People” Were To Buy Beatport

Imagine if the largest online record shop was a store run by DJs

Obviously the legal path to a group of individuals crowdfunding and purchasing a corporation is a sticky one – but that doesn’t mean that it would be any less successful than a corporate takeover.

An acquisition by a by a corporate entity like Sony or Universal could very easily be unsuccessful because it’s more of the same: consolidation of interests in the music industry is the story of the pre-internet business. Would DJs and labels really trust or support an electronic music marketplace owned by the majors?

Instead of waiting passively and hoping that some company might make smart decisions with Beatport, imagine that the community of users (over 40 million in 2012) banded together to proactively purchase the company.

It’s easy to imagine a few major changes that might happen with a DJ-owned Beatport :

  • A move towards label-focused followings (similar to Drip.FM or Apple Music’s “Connect”)
  • Major shifting of decision-making and royalties: giving more to the artists/labels sold on the site
  • Cutting out the middleman entirely – making Beatport more of a direct label-to-consumer platform like Bandcamp
  • Increased metadata aggregation that benefits DJs: waveforms, cue points, key  – all could be sent to Beatport via DJs’ software and then distributed to anyone who buys that track for the first time.
  • Your own ideas here!

These are all questions we want to ask you and hope that by opening up this conversation some fresh ideas can emerge – what would YOU want to do with Beatport if the DJ community owned it?

Worth noting – since late 2015, Beatport has been making changes to their store to improve the experience based on customer feedback. Check out their blog post here from November about the frontend changes, and a more recent post about how they’re improving on-site performance metrics

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Comments (36)
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  • www_base_at

    we will see soon who is the highest bidder and what will change. when SFX acquired Beatport they kicked out stuff and did some changes without relevance.

  • DJ Skinny

    It would be awesome! We could replace Soundcloud and have Beatport do what Soundcloud should be. A place for originality, open with the ability to purchase!

  • Alan

    I’d have it so that territory restricted tracks are not allowed to go on Beatport in the first place without alternate arrangements for locked out regions put in place to allow customers from the affected regions to be able to buy the tracks from regional label partners without needing to resort to VPNs and so forth. Beatport could easily be a tax-and-royalty management middleman and dish out royalties according to which region the track was bought from and collect GST and other value added taxes according to the country or region it was bought from. It’s the 21st century, not the 20th, it shouldn’t really be too hard to have Beatport sort it out and save labels the associated accounting and royalties headaches.

    I would also just add big room, EDM and trap as genres and filter out their tracks from progressive house and breaks/dubstep accordingly. Finally, I would also have a separate section for Traktor Remix Decks as per Stems, as I find it incredibly annoying trying to find some of them as it is.

  • Chaser720

    I’m gonna throw a company out there. KKR. Just bought Pioneer DJ for $500ish M so it would fit in their portfolio. They are also going to sell my company in the next few months for something in the billions so the capital is there. Also if I’m right here I want like 100 ups on this comment. ha

  • Should DJs Buy Beatport? | MMP BLog

    […] Beatport is now on the auction block. Could DJs crowdfund to purchase the company and run it as a collaboration by DJs for DJs? Check one point of view here. […]

  • Chris Wunder

    I got 5 on it.

  • John "WorkingMan" Davidson

    digital record stores like Beatport are glorified cliche playlists that contribute to the inoculation of the music scene.

  • Jeff "OfficeJob" Davis

    I agree with *nprev* that Bandcamp is awesome if you know who to support and thought the same thing when I read this article. (Recent purchase = Damu the Fudgemunk’s “How It Should Sound Vol 1 & 2” as a recommendation. Check his Rhythm Roulette on MassAppeal!)

    Seems the author thinks, though, that people’re looking for more of a digital record store with genre recommendation. By that logic, why not just follow Amazon-Recommended-for-You or something? So much audio content… I get it where now we also need good audio quality, so that’s why most seek out at least MP3 320+ or FLAC/WAV/AIFF etc, but why not just by an artist’s LP and import the record to comp if you need the ease of use? The idea of buying a website back–actually going out of my way to spend money on the middle man–is insane. Anybody feel me? Or am I totally off-beat here?

    I feel like we’re in a new era of profiteer-busting. Napster et al etc rose because we were being charged $17 a CD, where the actual artist saw close around 15% of sales. You can now pay an artist $8 directly for a 20-track album at a higher bit-resolution than CD, so why add on to that fee?

    Does it really all come down to marketing and exposure? You want to have cutting edge, etc?

  • anarchocaptiolist

    tragedy of the commons: it would never work out.

    it’s like the kitchen sink that always piles with dirty dishes of your room-mates. everyone wants them cleaned, but everyone depends on some one else to clean them.

    unless you had defined rights to residual income of beatport, similar to an equity. but this just came out of SFX, which was a parent company.

    interesting idea, but it would have to be developed more into a more defined capital structure.

  • Mainline DnB

    I’m being somewhat snarky here, but the first thing i would do if i had control of Beatport or the first idea i would implement is to permanently remove the text (Original Mix) from EVERY SINGLE FILE that isn’t a remix.

    • Spacecamp

      You have my vote for CEO.

    • nprev

      Is it really that bothersome to have “(Original Mix)” on your files? Why?

      • Mainline DnB

        Imagine looking through a list of literally hundreds of track titles, all on top of each other, in a piece of DJ software and hardly being able to discern one track from the other because all you can see is (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix) (Original Mix)…..

        • nprev

          Wow. I never thought of it that way. It never seemed to impact me when I DJ. But if you use CDJs, I can see how that can be an eye sore when it reads the filenames…

          That’s really interesting. See, I use Traktor. None of that “Original Mix” stuff ever appears on my tracks, decks, or library. It’s just “title,” etc.

          • nprev

            I take that back. I just noticed it in Traktor, haha!

            But still! Never seemed to bother me!

        • Christopher Percival

          You can do this en-mass with trainspotter.

      • Tarekith

        It’s pointless, unless it’s a remix of course it’s the original mix.

    • Tarekith

      I’d stop artists from uploading the exact same tracks every month under a different “label” each time.

  • nprev

    I’ve been an adamant user of Bandcamp for 5 years now. I’ve purchased thousands of tracks, albums, discographies, and even a handful of this content was either incredibly cheap or free, and furthermore, I was able to download in all formats with no additional charge (AIFF, FLAC, etc.). But prior to using Bandcamp, I did consider other online music distributors, such as Beatport.

    Here are some of the faults I found using Beatport:

    -Fixed prices are ridiculous.
    -Charging an extra $1 for a AIFF or WAV file is ridiculous (no extra charge on Bandcamp).
    -Limited to only dance music. (Obviously Bandcamp is anything goes music. Even podcasts are on there).
    -Artist’s pages are mundane (Bandcamp allows artists to edit details, color, background, etc. If it’s one thing I’ve learned about music, besides the sound, you need to have good art, such as an album cover or even a webpage. I don’t just buy records for music. I also buy it for the album cover art).
    -You can only preview a snippet of a track (Bandcamp allows you to listen to an entire track. It’s only limits is previewing tracks based on how many times you’ve heard it, and how long you’ve heard a track).

    I obviously don’t speak for every collector/DJ here, but in my opinion, these were the things I disliked about Beatport, and why I was discouraged from using it. If Beatport wants to expand and stay strong, then I think they should think of their users and expand these limits based on cost and effectiveness.

    The only thing I do like about Beatport is their catalog (yet genres are totally off), and to tell you the truth, that’s all I use Beatport for.

    • JayJak

      I love bandcamp but hate that I cant really use it to search for new stuff.

      • Spacecamp

        That’s kind of the big issue with anyone else besides Beatport – the fact that there’s no comprehensive search / browse with a high level of success makes me always default back to the catalog that has almost everything..

        • nprev

          You both have good points. It’s true, it’s difficult to find new stuff (based on chronology). Furthermore, they also lack a “top 10” type of lists. If you were a DJ that strives for cutting edge, then Bandcamp might not work for you.

          Generally, their articles and listening to their weekly podcast is adequate in keeping me up to date with current music.

          When it comes to searching for music, my work around is to use Beatport’s catalog, and then searching for that song and/or artist on Bandcamp. Most of my searches are just artists names, in which I find whatever work they’ve done, and listen to the entire label. I’ve been able to find great labels like Get Physical, Moon Harbour, and Poker Flats, this way. Sure, it’s a disservice to Beatport as I exploit them for their search engine, but oh well! Haha! Business is business!

          • Be

            If you’re a DJ that strives for cutting edge, why would you look for “top 10” type of lists?

          • nprev

            For the same reason why I read charts on Resident Advisor. They’re both tools for digging.

  • Derek 'SwaZy' Clyke

    I for one actually think that if the DJ / Producer community were to band together somehow and purchase Beatport, it could be the start of something interesting. Not just in terms of adjusting the amount of royalties and how they could be distributed, but also how the new advancements in the Dj technology world could be implemented into it. The obvious pitfalls could easily creep up into this, with potentially millions of people banding together to buy this back, it could also bring thousands of differing opinions of how things should go. Anyone have a spare 50-60 milli lying around?