At this point in the story, it bears mention that when Sillerman founded SFX and made his intentions to essentially monopolize the EDM industry known, he promised to implement a laissez faire approach and allow those in charge of each company to run their businesses as usual but with additional resources. In the case of Beatport, that’s the exact opposite of what he did.
As if having foreseen the impending disaster that was about to unfold for the company, Adell resigned shortly after signing the acquisition agreement and founding programmer Lloyd Starr took his place. Having been involved with Beatport since the beginning, Starr was personally invested in the success of the company and appeared willing to to make the best of the transition.
Jim Stout, widely regarded as the authority on sample packs and the GM of Beatport-owned music producer resource marketplace Sounds/To/Sample, was also optimistic at first but would eventually change his tune.
A source recalled:
One day, Jim Stout and I were having a conversation. This was after the SFX buyout, and I contacted him and asked, ‘So how is that going to affect things now that Beatport’s been bought out by SFX?’ He was like, ‘Nothing is really gonna change as of right now. Things are pretty much gonna stay the same. Everybody’s gonna keep their jobs – it could just mean really good things.’
But one day, we were talking about SFX for a while, and he just said, ‘I’m sick of Sillerman, I hate my new manager, and I’m sick of all the things from up top. They have no idea what they’re doing.
Stout’s attitude might have had to do with Sillerman having gone back on his word less than a year after the acquisition. In December of 2013, Beatport laid off a staggering 20 employees in their Denver offices and six in their San Francisco offices. According to TechCrunch, who referred to the incident as the “Beatport Bloodbath,” SFX corporate had considered terminating the San Fransisco employees over a conference call, but opted to fly HR reps over to break the news in person out of fear that “employees would destroy the office if not supervised.”
Up to now, the following accounts of Beatport’s operations after the layoffs were almost entirely kept from the general public. A source familiar with the goings on of SFX explains that by 2014 Beatport was “running on autopilot” and that despite the platform’s sizeable technical infrastructure, SFX only allocated enough resources to the aging systems it inherited to perform only the most crucial fixes and keep the store running.
“It is my belief that the first mistake SFX made after purchasing Beatport was laying off their engineering departments,” a source said, pointing out that a skeleton crew of systems engineers and developers were tasked with employing quick fixes for the site’s constant breakdowns. In the past, the company’s 30-person staff allowed them to work towards long-term goals as well.
After liquidating their staff, SFX’s out-of-touch leadership made a mockery of the creative side of Beatport as well. In April of 2014, a source who released music through Beatport told a particular story in which he recalls SFX to have played a role in what would end up being one of the festival season’s most poorly received artist projects.
They pulled me into the Beatport offices, and they said, ‘We have a high-paying opportunity for you,’ the source said. “Long story short, it ended up being them trying to get me to ghostwrite for Aiden Jude.
Aiden Jude was a 10-year-old DJ who would end up receiving more hate online for having a DJ career handed to him than any full-grown adult DJ likely has in their entire career. His debut release, “Tonight,” elicited an uproar from music enthusiasts since Jude’s name was on it and it was obvious he didn’t write it.
“They were like, ‘Look, we’ve got this kid, and his dad is a big potential investor,’” the source says. They later learned that Jude was the son of none other than Eddy Shapiro, a New York City real estate mogul who founded the firm Nest Seekers International. Essentially, Shapiro was willing to pay absurd sums of money to manufacture his son into an EDM child star – but what’s almost more despicable is that nobody present understood electronic music culture well enough to know how poorly it would go over.
While the Aiden Jude flop certainly didn’t yield as big of a negative social footprint as the layoffs did, it was nonetheless a symptom of SFX’s general lack of integrity. In Beatport’s early marketplace, content was king, but as the platform rolled out sponsored promotion packages (such as the one purchased by Shapiro to turn Jude into a famous DJ), the best distribution deals went instead to the highest bidder, which dealt a blow to the brand’s credibility. Being that the service’s remaining user base consisted predominantly of DJs and producers who once regarded it as a musical authority of sorts, the move would only put more distance between Beatport and its customers.
In a broader sense, every blunder made by SFX reinforced that the executives making decisions on Beatport’s behalf didn’t care enough about the outcomes of the business to acquaint themselves with electronic music – or even take advice from the very entrepreneurs they said would retain control.
“The board didn’t know anything about EDM,” a source said, “and every conversation that I recall where [Stout] was talking about his interactions with Sillerman, they boiled down to ‘I don’t know anything about electronic music, I don’t care, I just wanna own Beatport,’ basically.”
The series of SFX oversights that would prove most detrimental to Beatport, however, was the board’s blatant disregard for the technical logistics necessary to plan and execute updates and add-ons to the existing platform.