Peter Walker

The Beat Goes On

Mixmag

Start with the forming of Beatport – who came up with the idea, where and when etc. What difficulties did they overcome? What was the general situation in dance music at the time?

Then chart the evolution of Beatport into the market leader – the key decisions and expansions along the way and any missteps as well.

Main part is an analysis of ‘the Beatport phenomenon’. Talk to record label heads, producers and DJs about Beatport’s impact on dance music as a whole, with a particular emphasis on DJing and production. A lot has been written about MP3 downloads and their affect on dance music over the years, there will be loads online you can research, but try to focus this on Beatport specifically as much as possible.

The mass availability of tunes means that DJs have to work harder now to make an impression- whereas in the old days the newest and best tunes would be concentrated in the hands of a few key DJs, now they are available to everyone, instantaneously.

There has obviously been a massive effect on traditional distributors of vinyl and CDs

Having ‘a Beatport number one’ has become a new gold standard for producers

On the downside, some lazy DJs use Beatport as an easy way to see what’s popular – there’s been a lot of criticism of lazy ‘Vegas sets’ just based around the Beatport top ten. 

Finish up with some info on what Beatport have planned to celebrate their anniversary and where they see things going in the future.

Dance music was a very different place in 2004. A decade ago Facebook was a novelty site used by a few American colleges, EDM still stood for an Early Day Motion in the Houses of Parliament, and the iTunes store had only just begun the legal sale of music on the internet.

It was in January of that year that a few guys in Denver, Colorado released the first version of Beatport’s web store, offering the catalogues of 79 electronic music record labels. A year later version 2.0 was released with over 100,000 tracks, supplied by 2,700 signed labels, and a partnership with technology company Native Instruments that embedded it within the Traktor DJ Studio.

Lloyd Starr, now Chief Operating Officer at Beatport, was drafted in by founders Brad Roulier, Eloy Lopez and Jonas Tempel to help build the brand. He remembers the initial slog of trying to convince producers and artists to give up masters of their music, free from Digital Rights Management copyright, to sell on the site. “Denver’s dance music scene wasn’t too bad back then, and Brad being a promoter was bringing in a lot of big talent to one of our better nightclubs The Church, so during the journey in from the airport he’d be talking to them about Beatport, so we managed to get a lot of great premium content fairly quickly.”

Getting the music was only half the problem though, as Starr recalls. “When we first started encoding tracks we actually had a computer setup for each person entering tracks into the database, they were literally sitting there uploading individual tracks, with Discogs open to fill in any metadata, waiting for it to fully go from the master file to the MP3 so they could listen to it and manually assign the genre.” Another technical hurdle was responding to DJ demand for lossless files suitable for playing on big club systems, something that proved impossible with the bandwidth available at the time. The solution? a machine dubbed the burninator, which took in macro files and spat out CDs overnight, which were then sent out to customers.

Europe, where around 80% of the sites suppliers are, was the next logical move, so in ____ Beatport Berlin was born.

Beatport’s Executive Creative Director Clark Warner joined in 2007 from one of the sites most ardent supporters and suppliers, Ritchie Hawtin’s label Minus. At that stage the site needed was getting incredible amounts of traffic, but needed to build its platform for the more casual users, through industry news via the Beatportal, social media, remix contests, stages at festivals and the Beatport Music Awards. The latter built on the increasing significance of the site’s genre-specific charts, which filled the gap for a truly global, validated list of the hottest tracks, outside of those provided by the likes of Mixmag or Billboard.

“It brought a huge importance for independent labels, who take the charts seriously and invest in their sound and brands,” says Warner, adding that through these relationships with labels Beatport has been able to understand how the shift to digital was impacting their partners’ physical business, promotional enterprises, touring schedules and distribution of merchandise.

Eelko van Kooten, Managing Director and Owner of Spinnin’ Records, the Dutch label that promotes and distributes the likes of Afrojack, Martin Garrix, Sander van Doorn and Tiësto, was an early adopter and reckons Beatport has risen to the top by having first mover advantage. “From a label perspective, Beatport is very important, it’s the place where DJ’s get their latest tracks and the charts have the authority of displaying what the tastemakers pick up,” he stated, adding that “the site has evolved in parallel with the change from physical to digital, so it’s had a great impact on not only distribution, but also promotion and marketing.” 

Inevitably as scale and success grows, so does criticism and resentment. Some have accused labels of focusing too heavily on getting a Beatport number one, while others feel lazy laptop DJs rely too heavily on just downloading the top ten in their chosen genre. “Since there’s been any chart of any form, people have followed others’ lead, that just comes with the territory creatively,” responded Warner. “Anyone who really stakes a claim for a sound and risks something, if they stay true to that they’ll have success as an independent talent, that’s who you see at the top of the game today.”

Far from leading to the demise of traditional record shops and labels, Warner argues that Beatport has helped save many of those willing to go digital. “Having been in those shoes, shipping out vinyl promos for many years, I know there’s an awful lot of hard work that goes into a digital platform to provide something that’s reliable. So the revenues that Beatport brought in a very dependable manner created income for independent labels which really survive record to record, they didn’t really exist before on a global level. In the physical world you would have returns coming back, you never knew what would sell or where your records were selling. Beatport provided a glimpse into where your records were selling and knowing that cheque is going to come; that was huge to help creativity grow and enable more music to come into the market.”

By 2012 Beatport was reportedly bringing in between $15–18 million annually and in February 2013 media entrepreneur Robert F.X. Sillerman’s SFX Entertainment bought the company for somewhere around $50 million. Riding on the EDM wave, SFX went on to buy stakes in the Tomorrowland and Electric Zoo festivals, had Afrojack ring the NASDAQ opening bell when the company went public, and in January this year teamed up with Clear Channel Media to create a Beatport top 20 countdown radio show. Again, such big business has drawn disparaging looks from certain corners of the industry, but Starr argues that SFX shared the Beatport board’s vision to help fans connect with the music and DJs they love and help the DJs and producers stay connected with their fans. Warner added that the tie in with Shazam has helped in this respect, and using SFX’s resources has just helped amplify what the team’s being doing over the last decade.

“We built this foundation that’s so important for both the fan and the DJ, but the reality is, without wanting to sound to hippie, dance music is based love, community, friends, a cosmic connection to music. So with regards to the current live EDM bubble, across the world people really don’t know how close and tangible this music is until they go to an event and see a DJ play, realising it’s not so mysterious but there’s so much magic in the music, it’s hard to imagine that this decades long artform is going to just burst someday soon,” says Warner.

A version called "The New Beatport" was released on January 21, 2009 and integrated the use of a Flex 3 web application provided by RealEyes Media. On July 14, 2011, Beatport launched their HTML5 website with new features, designs and a new platform.

In February 2013, Beatport was acquired by Robert F.X. Sillerman’s SFX Entertainment, a conglomerate focusing on EDM properties such as festivals and promoters, for a reported price of slightly over $50 million. Its annual revenue for 2012 was reportedly around $15–18 million, with losses of $2 million. It now has over 40 million users and a catalogue of more than a million tracks.

Additionally, Beatport announced a partnership with the music recognition service Shazam, which would allow the service to index Beatport’s catalog so its songs can be recognized by Shazam's app.

On January 6, 2014, Clear Channel Media and Entertainment announced that as part of a marketing partnership with SFX, it will syndicate a Beatport top 20 countdown show to its major-market contemporary hit radio stations beginning later in the year. Clear Channel staff, including John Sykes, believed that the deal (particularly the Beatport countdown show) would help provide a higher level of national exposure to current and up and coming EDM artists (Clear Channel's syndication division also produces the American Top 40).

Beatport now has offices in Los Angeles, California, San Francisco, Tokyo, Japan and Berlin, Germany.

All tracks on Beatport are provided free of digital rights management. There are no restrictions on the number of devices to which a purchased song can be transferred nor the number of times any individual song can be burned to CD.

Eelko van Kooten, Managing Director and Owner of Spinnin’ Records, the Dutch label that promotes and distributes the likes of Afrojack, Martin Garrix, Sander van Doorn and Tiësto

What does Beatport mean to you as an artist and DJ?

From a label perspective, Beatport is very important, It's the place where DJ's get their latest tracks and since they are the early adopters, the charts on Beatport have the authority of displaying what the tastemakers pick up. 

What impact has the website had on the way you distribute your music and interact with fans? 

The site has evolved in parallel with the change from physical to digital, so it has had a great impact on not only distribution, but also promotion and marketing. 

When did you first become aware of Beatport and how do you think it and the industry has grown since then? 

I think around 2005. The platform has come a long since then and will hopefully continue to evolve and be a defining platform in our industry for the years to come.

President of Beatport Pro and COO of Beatport, Lloyd Starr: the original founder Brad Roulier, Eloy Lopez and Jonas Tempel saw the Native Instruments software coming out and noticed a gap, because iTunes hadn’t even launched yet, so they had the idea of bringing together MP3s, get music from DJ friends and put it out digitally. So Jonas owned a design agency Factory Design Labs, and I was working there at the time, so they came up with the idea and had the resources – software developers and creatives – to build the brand and do the software. Eloy was the one who really kicked it off, then we all came together and next thing you know we had a website up and running.

It wasn’t as popular as it was in Europe, it was around but mostly through underground raves, so we knew we had to reach out to Europe to get music from that community and bring it to the US. We spent a lot of time in the early days trying to get masters from people, who before iTunes had launched were not that willing to give up their masters. On top of that we were asking for it DRM free. I remember at one point we actually hired a sales person to come in and help the team get better at closing those deals, but it was tough work. 

The other thing that was interesting at the beginning, after we had launched, there was a large group of people that wanted lossless files, they didn’t want any sound quality issues at all because they knew they were going to be playing on big systems, and the bandwidth wasn’t there yet. So we actually went out and got one of those CD machines where you could write macros and have it spit out CDs for packaging, we got it hooked up to the website and if people wanted to buy WAVs back then we would actually have that overnight create CDs for them and someone would come in the next morning to FedEx them to the DJs. To look back on that is incredible, but we named it the burninator and its still in the office today.

Jonas was trying to get hold of the CEO of Native Instruments and the CEO of Native Instruments was trying to get hold of Jonas, but our emails were literally getting stuck in each other’s spam filters and both companies thought one another wasn’t good enough to work with, so we started off on rather awkward footing. After that got cleared up though they were a great partner and we did a lot of really cool things together. We packed up the team and flew out to Berlin, they advised us on lots of things in the early years, helped us get the Berlin office setup which was instrumental to Beatport’s success, and we did some innovative technology stuff. We had a Flash store inside of Traktor at one point, that ended up not being very lucrative so we didn’t continue it, we also had them build a Beatport version of Tracktor, the free version you could download from their site at the time, with some beat-syncing technology. That was our first step into what become Beatport Pro.

When we first started and were encoding tracks we actually had a computer setup for each person entering tracks into the database, they were literally sitting there uploading tracks, with Discogs open to fill in any metadata, there were no automated systems. They would have to wait for the track to fully go from the master file to the MP3s that were created so they could listen to it and find the genre. We would listen to every single track that came in back then and manually assign the genre. So the biggest change was technological, automating the back end, the sales hockeysticked after that. That was in the first two years we solved that. To this day there are philosophical discussions going on at Beatport about which genre something is, you’re basically arguing religion, nobody’s right, everyone has an opinion. At first we played music in the office, because everyone had broadly similar tastes, but eventually we had to branch out and get experts in all the different domains of dance music, so people were fighting so much about what should be played in the office we had to move to headphones.

We definitely had challenges, because we bootstrapped the company with a very small number of people at the beginning trying to build a very large business, so we had all the frustrations that come with being a startup. We were able to persevere, I’m glad I made it through that an earned my stripes, but I’ll never do that again. It was difficult, but we had fun. Then there was the whole thing with internet credit card fraud that came up, that was huge blow. Once we became popular everyone on the internet was trying to steal credit cards and using our system to try and authorize them, because there was little or no risk as you’re not having anything shipped to your house, it’s a digital good. We made a significant financial investment in tools and service that allowed us to play that cat and mouse game, so today we’re experts at that and we have very little fraud compared to other online retailers. As a global store we were also pushing the limits for the legal music rights, we’d have PRO conversations coming out of the woodwork once they sensed Beatport was making interesting revenue, we were big enough that it was worthwhile to get involved and small enough that we couldn’t fight back like Apple could. I’m proud of the fact we helped lead the way there and have gotten thing to the state they are now. Obviously there’s still a long way to go, but we gave it a push.

A lot of it at the beginning had to do with first mover advantage, then Jonas, Brad and Eloy were really good at communicating with the DJs. Denver’s scene wasn’t too bad, Brad being a promoter was bringing in a lot of big talent to The Church and during the journey in from the airport he’d be talking to them about Beatport all the way to the club, so we got a lot of great premium content quickly. Probably the most pinnacle moment was opening the Berlin office, we recognized the differences between the American and European cultures was big enough that having people on the ground in Europe was crucial. Something like 80% of our suppliers are in Europe.

Just before the acquisition, what we recognized was that there was a large number of fans coming to the site that were just experiencing it, the DJs and tastemakers may buy music, but the fans just wanted the context. So what we did was started to build other avenues to make the site an interesting place for fans to discover new music, that’s when the remix contests, artist profile pages and news portal really started to take off. Our traffic skyrocketed, we were figuring out how to take these fans and connect them with the DJs and more importantly help the DJs stay connected to their fans. The founders and board decided they wanted to sell the company, so we spent time shopping around until we found the right partners, and SFX had the right vision and mission for where we wanted to go, the board felt they could leave a good legacy behind. There’s always a change when that happens and in that mix we got a lot of new partners, were introduced to a lot of really smart people on the scene, and now we have this much larger mission than we would have been able to pull off on our own. We’re genuinely excited about the direction we’re going and the resources we’ve got at our disposal to get it done.

Executive Creative Director Clark Warner: I joined seven years ago last month, so summer 2007, I moved from Detroit to Denver, bringing some industry experience. I was actually a supplying label to Beatport in the very beginning with Minus, which I co-founded with Ritchie Hawtin. When I first got there I had an open role, which got into label services pretty quickly, managing relationships continentally and then taking the role of VP of music services for about three years.

When I first got there I think everyone was just pinching themselves with the amount of traffic the site and store was getting, responding to that with basic technological needs, so distribution globally, spreading out our servers and handling the messaging, but we quickly realized we could do a hell of a lot more. Stages, editorial, social media, taking things further on a global level. People were so excited about coming to work every day, no matter which office they worked in, that they were growing something to become much bigger than it was intended to at the beginning. With the awards, events, news, remix contests, those were all innovations across the board. We knew we wanted somewhere people could share their work beyond just putting their label on the store.

To get to this point with the chart importance, there wasn’t really a tangible, global, validated dance music chart outside of a few editorial solutions like Billboard or some of the European magazines. It would just be snippets of tastes from around the world, but no one had a really definitive, singular voice saying ‘this is what the world is responding to on a DJ level’ before Beatport. It brought a huge importance for independent labels to take that with a lot of seriousness and invest in their sound and brands. The relationships were key drivers for us to understand how digital was impacting our partners physical business, their promotion business, their distribution of merchandise, their touring, you know we learned a lot together and we never took it for granted, we always wanted to help labels make that a larger growth with them. It was completely responsive to the needs of labels and DJs from the get go.

Since there’s been any chart of any form, you want to follow peoples lead, that just comes with the territory creatively. Anyone who really stakes a claim for a sound and risks something, if they stay true to that they’ll have success as an independent talent, that’s who you see at the top of the game today. It doesn’t come without a price. I would never call any DJ lazy, it’s not easy to take risks and have musical variety in your programming, or just simply go buy what your favourite DJ’s playing and go do the same thing, it’s just kind of boring that’s all.

Having been in those shoes, being in physical distribution shipping out vinyl promos for many years, myself and a lot of people I work with coming either from the journalistic side with marketing or print, there’s really an awful lot of hard work that goes into a digital platform to provide something that’s very reliable. So revenues that create income for independent labels that really survive record to record was that Beatport brought in a very dependable manner, that didn’t really exist before on a global level, where there was security in doing business the a retailer. In the physical world you would have returns coming back, you never knew what would sell or where your records were selling. Beatport provided a glimpse into where your records were selling and knowing that cheque is going to come. That was huge to help creativity grow and enable more music to come into the market. I can continue to put out music because I know I’ll get paid. 

It’s been interesting and exciting, out goal has always been to help people find music they want to play, that’s now transcended to help people find the music that they hear, with the help of Shazam. It’s the shared excitement of helping people promote great music, to get that to people’s ears, be that on their commute or in a club. With that, the resources we’ve gained being part of SFX, having a larger team to amplify and invest in all the great things we’ve done over the last decade.

This level of access, we built this foundation that’s so important for both the fan and the DJ, but the reality is shaking hands with someone like Nile Rogers or Giorgio Moroder in the last couple of years at conferences and seeing how no one said ‘what are these old guys doing here?’, there’s been such open arms for what disco has done. Dance music is based on community, friends, without wanting to sound to hippie, it’s based on love, a very cosmic connection to music. So with regards to the current live EDM bubble, across the world people really don’t know how close and tangible this music is until they go to an event and see a DJ play, realizing its not so mysterious but there’s so much magic in the music, it’s hard to imagine that this decades long artform is a bubbl