SFX Entertainment's buying spree is extending well beyond the concert promoters that create the core of the EDM company's business model. Its next three additions, Tunezy, Fame House and Arc90, will give SFX a variety of digital capabilities.
All three companies have signed agreements but have not yet been acquired. No financial details were disclosed.
SFX Entertainment: EDM's Goliath
SFX is known best for buying EDM concert promoters such as Made, Donnie Disco Presents and Life in Color, following the same leveraged roll-up strategy used by Sillerman with radio stations in the '80s and concert promoters in the '90s. But SFX has also looked for other companies to help it build a more comprehensive entertainment company. Beatport, the EDM-focused download store and online community, was among the handful of companies SFX purchased before its IPO earlier this month.
Tunezy, the winner of last year's Billboard FutureSound Innovators Showcase, is a digital platform that allows artists to monetize fan experiences. Artists that use Tunezy sell everything from access to backstage or a concert's soundcheck to a private Skype chat.
Tunezy and SFX make a good match because both companies put an emphasis on experiences, Tunezy CEO Derrick Fung tells Billboard. "I see huge potential in trying to improve and increase engagement with fans at these festivals. If people are given a more intimate, exclusive experience, I think people would pay for them." Tunezy and its three full-time employees will relocate to New York from Toronto.
Arc90 designer and builder of mobile and web applications, services and platforms. Company founder Rich Ziade explained in a blog post that SFX had been an Arc90 client and had impressed his team with its "vision of one digital framework" to connect EDM culture. "It was clear to us that SFX had plans to build something entirely new and unprecedented: a global, API-driven platform that delivers content, connects people to events (and to each other), connects artists to their fans, integrates with the largest social networks, and works across devices. And those are just the aspects of the system that we can publicly disclose."
Fame House brings to SFX digital strategy, social media, and web design and development services. The company has worked with such artists as Eminem, Tiësto, Pretty Lights, Matisyahu and Richie Hawtin. “We see this as an incredible opportunity to expand our capabilities and resources to enable us to offer cutting-edge digital marketing services for our existing clients, for the SFX portfolio, and for a broader client base in the future,” Fame House CEO Michael Fiebach said in a statement.
“These deals are consistent with our commitment to bring EMC fans around the world more of what they love, 365-days-a-year, and to be world-class in all our areas of focus," said Robert F.X. Sillerman, Chairman and CEO of SFX Entertainment, in a statement.
News of the deals had little effect on SFX's share price. Shares were down 1% to $9.80 in midday trading Thursday. After starting with an IPO price of $13 and falling under $9.00 last week, SFX shares have fallen in a narrow band around $10 for the last five trading days.