Massive Advisors, a management consulting firm, recently released their white paper (formal term for an informational guide or report) titled Electronic Dance Music (EDM): The Digital Pangaea (Pangaea was a super continent that existed millions of years ago for those of you who didn’t know, kind of a weird choice if you ask me.) In the paper, the firm discusses the true value, influence and current reach of the global EDM industry. According to their findings, our industry has reached a true value ranging between $15-20 billion. Let that sink in for a while. $20 billion…Let’s backtrack a bit. Just a year ago, industry experts valued our scene at an already staggering $4.5 billion. Massive’s finding is up to 4 times that estimate. Now that’s an impressive number, and while I’d love to full-heartedly believe that to be true, I have a difficult time understanding why there would be such a great discrepancy between the two reports. Now I know our scene is burgeoning, expanding exponentially, whatever you want to call it, but such reported growth is ridiculous, almost absurd. Here’s how Massive attempts to explain their number:

The EDM market is a $15.0 to $20.0 billion global industry, with the major players in the global festival market achieving $4.5 billion in sales for 2012. Digital music revenues grew an impressive 9.8% in 2012. This compares to a 17% increase in festival attendees at five top global festivals and an increase of 33% in the total number of festivals thrown yearly worldwide. The attendance at 20 top global festivals evaluated by Massive Advisors, LLC increased from 1.9 million in 2009 to an estimated 3.4+ million for 2013.

Our scene’s main revenue stream comes from our festivals, not track or album sales, but the EZoos and EDCs. According to Massive these major players brought in $4.5 billion. So where does the $10-15 billion come from? Other than some impressive but not telling statistics, the firm makes no attempt to explain their finding. As a side note, what kind of a spread is that? $15 – 20 billion? That’s a $5 billion spread! That’s 25% of the maximum. Question: how trustworthy is someone’s analysis if their range is 25%?

Also let’s take a quick look at Massive Advisors. This consulting firm is part of the Massive Enterprises umbrella, a branded house with 5 companies that all are somehow related to EDM.

From merchandising to festival management, Massive Enterprises is heavily invested in the EDM scene and thus directly benefits from portraying the scene as rapidly growing, with the goal of acquiring more investors and clients. Don’t get me wrong, I want to believe our scene is growing that fast, but it’s pretty apparent that the ones making those claims have a great incentive to exaggerate their findings. Over-exaggerating these kinds of reports is not only wrong, but could end up hurting our scene in the long run. Look at it this way, Massive Advisors finds EDM to be worth $20 billion, and let’s say that next year another company reevaluates it at $6 billion. That’s actually not bad at all since it’s a growth of $1.5 billion over the previous $4.5 billion, but by taking Massive Advisors’s report into account, it appears to be a drop of $14 billion from the reported $20 billion. As a result, people will think the bubble burst, investors will pull out, and without investor backing events will fold, etc…

Again, I want our scene to grow but we need to be careful and always be sure to ask the right questions. Or maybe I’m missing something and if that’s the case, feel free to let me know in the comment section below.

Massive Advisors White Paper