Jim Carroll: are the glory days of the superstar DJ now a thing of the past?

A recent bit of decluttering in the OTR office unearthed a copy of Dom Phillips's Superstar DJs Here We Go on the bookshelves. Published in 2009, it's a great firsthand account by the former Mixmag editor of the rise and fall of the wave of superstar DJs and superclubs who ruled the roost in Britain in the 1990s.

It was a world ruled by such names as Cream, Ministry of Sound, Pete Tong, Back to Basics, Judge Jules and Paul Oakenfold, a time when DJs could earn thousands for a few hours’ graft behind the decks, an era of excess and hedonism all round.

Of course, it all came tumbling down. Such eras always do. In this case, Phillips dates the demise to millennium eve, December 31st, 1999. The big clubs came out roaring and shouting with big plans for the night, but the punters stayed away. The scene had run out of steam, older clubbers hung up their glowsticks and younger fans went elsewhere for their kicks.

It’s hard not to think of that first wave of superstar DJs and superclubs when you see the recent despatches from the International Music Summit. A report presented to the annual gathering of the electronic music industry in Ibiza showed that growth in the $7.2 billion business is slowing. The industry is still growing (up 3.5 per cent year on year), but the glory days of massive increases in revenues from events, clubs and recorded music are in the past.

Bursting of the bubble

You could, like some have done, put this down to a bursting of the EDM bubble. Or you could look back at Phillips’s book and see the latest slowdown as part of the inevitable swings and roundabouts of any business cycle for any sector.

The problem for the dance industry, though, is that its recent activities have been about scale rather than sustainability.

Massive festivals like Ultra, the rise of Las Vegas superclubs and the lavish fees paid to the top tier of DJs are about growing the market and increasing the revenues for all the players. If that growth begins to slow or contract, problems will start to emerge as loan repayments beckon.

We’ve already seen one big player hit the wall this year in the shape of Robert Sillermann’s SFX Entertainment, which is currently in the middle of bankruptcy and restructuring proceedings.

Paving the way

Sillermann had huge success with SFX the first time around. He made $1.2 billion from the sale of 71 radio stations in 1997 and $4.4 billion from the sale of various concert promoters to Clear Channel in 2000, paving the way for what we know as Live Nation today.

This time was different. Sillerman started out by applying the same aggressive acquisition policy which had worked for him previously to the electronic music industry. He bought the Beatport music service, the TMWRK management company behind Diplo and others, and various festivals and events. But the market conditions were different and SFX encountered huge financing and liquidity problems.

You can be sure that SFX won’t be the only entity to have problems as the crazy heat begins to go out of the dance music business. Be it those who’ve bet the house on EDM or the dance festivals who’ve expanded on the expectation of continuous growth, the reality of the balance sheet will mean a rude awakening.

At least some of the DJs will be still in a job. It’s interesting to note that the likes of Tong and Oakenfold from Phillips’s book are still very much part of the scene. Like electricians or plumbers, it seems you’ll always need a DJ.