Beatport is celebrating its 20th anniversary with a range of BPXX initiatives and activations, including a strong presence at IMS 2024 in Ibiza next month with the return of the Beatport Awards.
Following his promotion to president (as well as retaining his CFO role) at Beatport Group earlier this year, London-based US executive Matt Gralen is interviewed in the latest edition of Music Week.
Prior to his arrival at Beatport as chief financial officer, Gralen served as EVP of corporate development at UnitedMasters, a distribution platform for independent artists. Before joining UnitedMasters, Gralen was VP of strategy & operations at Mass Appeal. His career began at investment firms Raine Group and Goldman Sachs, where he advised and invested in high-growth consumer, media and technology companies.
The Beatport download store for DJs launched in 2004 and continues to be a key part of the dance music ecosystem. It has evolved in recent years to offer cost-effective streaming subscriptions (alongside the multi-genre DJ platform Beatsource), although the traditional Beatport download business remains resilient among DJs who rely on MP3s.
BPXX will feature special programming and events, as well as retrospectives from the last 20 years of dance music. A capsule digital web experience charts the course of Beatport, from the company’s first uploaded track – Steve Smooth’s Beatfreaker (Jay Walker and David Garcia Retromode Remix) – to the latest tech solutions that integrate Beatport and Beatsource directly into DJ software and hardware.
Here, in an extended online edition of his Music Week interview, Matt Gralen talks revenue growth, streaming and the dance music boom…
Beatport’s revenue has tripled in the last six years. What's been driving that, performance?
“I’ve got to give a lot of credit to Robb [McDaniels, CEO since 2017] coming in and really doing an amazing job, tapping into the strength that Beatport has had since it began in 2004. There is this movement across the industry for more and more people to create digitally. I saw a stat in a study that was done in 2020 showing that there were 15 million digital music creators. We think there are at least a few million DJs out there. The company's done an incredible job of making it easier for people to start [DJing], that's one of the ways that we've grown.”
Is part of that growth down to targeting a wider audience with more products?
“Yes, absolutely. So on the DJ side, the Beatport download store business is still going strong and has shown a ton of resiliency over the past few years. But we've also launched our streaming products, which make a lot of sense for beginners and younger DJs, who in some cases have never downloaded a track in their lives. But in addition to DJs, we've also rolled out products for producers and labels and we're doing more with fans in our community.”
The company's done an incredible job of making it easier for people to start DJing, that's one of the ways that we've grown
Matt Gralen
You launched the streaming tier five years ago, but why is the download business so enduring?
“Well, from a business perspective it really comes back to focusing on what your customers need. Downloads have significant utility for DJs, and I've experienced this myself as somebody who started DJing essentially when I started at the company. You get started on streaming, you learn a little bit, and then maybe it's time to play at a friend's party, and you want a USB that has MP3s on it. So we see the response from our customers and that they still demand that download experience.”
Has it become more affordable for fans to become DJs?
“Yes, it's a story of lower barriers to entry for people who want to get involved. It used to be that to start DJing you had to get big, physical decks, you had to buy vinyl at some point. One important point is the education side of it and the availability of information about how to DJ. You can buy a mini controller from Pioneer for $200, you can subscribe to our streaming platform for $10-15 a month, and you're off to the races. On the production side as well, there’s software you can access for pretty cheap monthly subscription rates versus getting access to a studio. So you kind of just add all these things up and more people are flocking to it.”
How is the dance music boom helping the rise of sub-genres?
“I think you have to look at the blurring lines between genres. A lot of the best dance music today that we're supporting has elements of other genres in it, whether that's hip-hop or, importantly, genres that come from other parts of the world. So it's [music] from Latin America, from Africa, so on and so forth, that is impacting dance music significantly. That's a part of our strategy, to invest in those global markets in a bigger way. We can start to elevate those voices for their own sake, but also create a more global community which, at the end, is more exciting for artists and fans.”
What is the global reach of Beatport at this point?
“We have revenue in almost every country around the world. But what I'd say is that we're focused on more intentional investment into emerging markets, and into markets that maybe we just historically haven't focused as much on. So our biggest market is the US, behind that the UK and Germany are number two, number three. The rest of Europe is also big, but we see a lot of activity in places like Japan, Australia. We're looking pretty heavily at Brazil, Colombia, Mexico, as many other music companies are investing in some of these markets, we're going to be doing the same thing.”
We believe that interactive and engaged experiences are a big part of the future of music
Matt Gralen
Does your hybrid model of downloads and streaming better reward artists?
“I think our business is a good example of where we believe the future of music lies. There is a lot of talk – rightfully so – in the music industry about monetising superfans, which is usually the phrase that gets thrown around. Robb talked about this in our [appointment] announcement, we believe that interactive and engaged experiences are a big part of the future of music. We’re already doing that at Beatport, we’ve been doing that since 2004. What we've essentially done is found a segment of music customers that are highly engaged in an activity, in certain genres, and they are willing to pay for the value that Beatport is able to provide.
“We just think that strong businesses are able to drive positive change. What we've essentially done is create a virtuous cycle, where the customers, DJs and producers are seeing value from what Beatport provides. They're happy to pay at a higher rate than your typical Spotify or Apple Music customer. That means more opportunity, more revenue in artists’ and labels’ pockets at the end of the day.”
What can we expect from Beatport’s plans for interactive experiences?
“Well, we've talked a bit about just lowering the barriers to entry to an activity like DJing. So that's something that already exists and we know we can get more people involved with it just by making the on-ramp an easier process. So streaming is part of that. From a value proposition standpoint, paying $15 a month for access to a library that Beatport has versus having to download MP3s, that’s a superior value proposition for the beginner.
“We think that things like AI can include features and automate certain things that will make it easier for beginners. And then we also think, in terms of newer experiences and what might this look like five to 10 years down the road, there are going to be experiences that have elements of DJing that will be more approachable and more accessible for a mass market type demographic. So you look at the TikTok Top 100, and maybe a third of those tracks are sped up, slowed down or remixed in some form. Can you offer a product to the mass market that allows a slightly more engaged, lean forward type consumer to interact with the music in some way, to stitch it together, in a way that's similar to DJing? At the end of the day, you're kind of left with the question, how do we define a DJ? We don't think there needs to be a strict definition. We don't think there needs to be two turntables and a mixing board. We think as long as people are having fun, and getting the music, that's great for us.”
Finally, 20 years on why do you think Beatport has endured so well as a platform given that so much has changed in the music industry over that period?
“I think it's a focus on the customer. And I think a lot of that comes from who our team is, right? So we have somehow found a DJ that does every job function imaginable, from HR to engineering. I'm continually surprised by roles that we've filled with somebody who happens to be a DJ. We are those DJs, we are those label heads, we are the producers. I have not seen in my experience across many culturally involved businesses, a team that does better to balance the passion for music and culture and focus on business the way that we do. So I think the team has just been incredibly focused on delivering for our customers, delivering for artists and ultimately driving a better future for music as a whole. And I think that's reflected in the longevity of our success.”
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