Aug 07, 2013 at 03:39 AM
written by Kris Mathis

The Challenge And Opportunity Of EDM Sponsorship

Here's an interesting nugget from last night's Live Nation quarterly conference call, which nicely illustrates both the challenge and promise corporate marketers see in EDM (that's Electronic Dance Music, not Event-Driven Marketing).

Live Nation CEO Michael Rapino told analysts...

"EDM has not been broken by mainstream Madison Avenue yet. My sponsorship team would tell me when they're out talking to the CMOs, one of the biggest questions they get is how do we get into EDM? How do we get to that youth market? So we think sponsorship has a huge opportunity."

What's more encouraging? Less than 1% of Live Nation's sponsorship revenue currently comes from the company's seventeen EDM festivals, which host more than 2.5 million fans each year. EDM festivals, like the recently completed Hard Summer Music Festival, often carry sponsors ranging from Red Bull to Blu eCigs.

Having such a small share of its revenue coming from EDM, you would certainly think that the world's largest live entertainment company still has plenty of runway to grow sponsorships in the fastest growing segment of the music industry, but while the growth opportunity looks promising, scaling sponsorship revenue in the space may not be as easy as it sounds.

Pasquale Rotella, CEO of Insomniac Events, one of the biggest EDM promoters with blockbuster events like Electric Daisy Carnival, say his company has to turn down a lot of potential sponsors. EDC sponsors include Red Bull, Sony and Pioneer.

“[While] it’s not something they're consciously aware of - in [people’s] minds, the chemistry changes a little bit when they're being sold stuff.” Rotella told a panel at the recent EDM Biz conference while confirming a partnership with Live Nation. “I don’t feel good about someone presenting the stage and their logo being at the top,” he continued. “People are sold stuff every day. I want for our events to be where people can feel a little free. But we do have some sponsors.”

So Live Nation's continued revenue growth may hinge on whether the company can bring more corporate dollars into EDM without sacrificing the unique fan experience that has helped it to become so popular in the first place.

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