2017 - mobilebeat.comRoughly 20% of all multi system, full time operators have total gross sales of...

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2017

M O B I L E B E AT S TAT E O F T H E I N D U S T R Y 20 17

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Mobile Beat is proud to present the first annual “State of the DJ Industry” survey with

questions and data compiled, analyzed and scribed by marketing guru, in-house economics nerd, and Mobile Beat presenter, Matt Martindale. ([email protected]).

Copyright © 2016 by Mobile Beat Magazine and Matt Martindale All rights reserved. This material cannot be copied, disseminated or transmitted in whole or in part, in any form or by any means electronic or mechanical, including photocopying, recording or any informa-

tion storage and retrieval system now known or hereafter invented, without the written permission from the authors.

1,291 surveys were completed, providing a tremendous amount of data to analyze. To those who participated: Thank you for your input! A total of 6% of the replies came from DJs located outside the United States, mainly from our neighbors to the north up in Canada.

GETTING ORIENTED: REGIONAL BREAKDOWNS

REVENUE32% of the 1,291 full survey respondents indicated they had a revenue decrease from 2015. Of those, 38% are full time (sole source of income) DJs who rely on income generate from DJing. What is fas-cinating, is that 82% of the 414 respon-dents noting decreases in income from 2015 are single operator companies. The states with the most significant revenue decreases by region:

Region 1: CaliforniaRegion 2: ColoradoRegion 3: TexasRegion 4: IllinoisRegion 5: FloridaRegion 6: New YorkRegion 7: HawaiiRegion 8: Ontario

68% of the 1,291 full survey respon-dents indicated they had a revenue increase from 2015. Of those respondents that said they had a revenue increase, 61% are DJing part time and say that they count on another source of income. Of those who DJ part time, nearly 90% are single operators. The states with the most significant revenue increases by region:

Region 1: California (Note: it is a very unique market microcosm because it also had the most significant revenue decrease. Most increases occurred from DJs who are single operators, but appear to be also sub-contract out other DJs.)

Region 2: UtahRegion 3: Texas (very similar to California with most increases

coming from DJs who are single operators but are now sub-con-tracting out other DJs.)

Region 4: Ohio Region 5: Florida (very similar to California with most

increases coming from DJs who are single operators but are now sub-contracting out other DJs. BUT, there is also an anomaly spike with more multi-system companies having an increase in revenues in Florida and Virginia.)

Region 6: Pennsylvania Region 7: AlaskaRegion 8: Ontario (single operators)


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SINGLE OPERATORS AND MULTI-SYSTEM OPERATORS

80% of total survey respondents are sole operators in some form (they either do all the DJ work themselves, or occasionally sub-con-tract out another DJ, but have no paid DJ employees). Of that, 29% are sole single operators (once they are booked, they are booked and will never sub-contract out work). Of the total single operator pool of companies, 42% have total company revenues of less than $50K; 36% have total company revenues between $51K-$100K. But, that doesn’t tell the whole story.

SINGLE OPERATORSEYE OPENING: Only 3% of the 1,041 total single operator survey respondents who indicated that they do DJ work full time and rely on DJ work as their sole source of income have total gross company sales of $101K or greater. (this is not the owner’s income, salary nor wages earned, but the total company gross revenues.)

44% of the single operators who DJ full time, and rely on DJ income as their sole source of income have total gross company sales of $0 to $50k. So, being a full time DJ as a single operator often indicates that 56% have to on another source of income.

MULTI-SYSTEM OPERATORSOf the 250 multi-system operator survey respondents, 63 percent do DJ work full time as their sole source of income with about

1/3rd of those having 2 to 5 employees. These full time multi-system owners with the number of paid employees seems to decrease, until a multi-system operator has more than 16+ paid employees. It then leads us to conclude that multi-system owners intentionally stay around 2 to 5 paid employees. Those that slowly grow to 10 employees, either become more efficient, or seem to re-evaluate the benefits of having employees alto-gether because the number of paid employees sharply decreases after that. However, it doesn’t do this long term. Once a company reaches 16+ paid employees, the number of paid employees sharply increases again by 1/3rd. This would indicate that these owners have systematized a formal training, sales and production program or have figured out how to leverage their economies of scale. Roughly 20% of all multi system, full time operators have total gross sales of $101K or greater.

DIGGING INTO THE NUMBERS

SERVICE OFFERINGS, SIDE BY SIDE (More than one selection was okay.)

Single Operators Multi-System Operators

87% offer lighting services 93% offer lighting services

20% offer games shows / trivia 22% offer games shows / trivia

26% offer photo booth services 48% offer photo booth services

35% offer karaoke services 57% offer karaoke services

10% offer videography services 15% offer videography services

6% offer inflatables 7% offer inflatables

36% offer outdoor games 26% offer outdoor games

45% do bar/club events 20% do bar/club events

MOST COMMON SERVICE SINGLE OPERATORS WANT TO ADD:

up-lighting or more lighting options; photography / video services; photo booth.

MOST COMMON SERVICE MULTI-SYSTEM OPERATORS WANT TO ADD:

photography/video services; trivia & game shows; limos / bartending/catering.

OFFERING ANCILLARY SERVICES

Of the respondents offering ancillary services, 55% will allow clients to book additional services without booking their DJ service.

SHOW TRACKING / INQUIRIESWeddings: respondents said that that in 2016, their weddings were booked overwhelmingly 7 to 11 months prior. Only 23% of weddings were booked are 12+ months in advance.

Mitzvahs: 42% of respondents that do mitzvahs reported that their mitzvahs were booked 2-6 months in advance.

School / Youth: 64% of respondents that do school and youth events reported that their school events were booked 2-6 months in advance.

Corporate: 71% of respondents that do corporate events reported that their corporate events were booked 2-6 months in advance.

WEEKLY EVENTS (BARS, TRIVIA, KARAOKE, ETC.)86% of respondents that do weekly events reported that these events were booked less than a month in advance.

EYE OPENING: 75% of the weekly events (bars, trivia, karaoke, etc) are single operators who reported making less than $50K in total company gross revenue.

WEEKDAY EVENTS19% of respondents reported doing weekday (Mon-Thr) DJ work. The most common reply is weekly events (bars, trivia, karaoke, etc) and weddings. There is 71% of this 19% pool respondents said they had some Mon-Thr weddings and that the overall number of events was about the same as in 2015 for them. Interestingly, 43% of respondents said their weekly (bars, trivia, karaoke, etc) events was the same, 21% reported it went up between 10-25%, or more than what they had in 2015.


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TYPES OF EVENTS (More than one response was okay.)

• 61% of all respondents say they do ceremonies and weddings

• 48% of all respondents say they do school / youth events

• 58% of all respondents say they do corporate events• 21% of all respondents say they do weekly events (ie.

trivia, bars, karaoke, etc).• 15% of all respondents say they do mitzvahs

EYE OPENING: Less than 2% of the single operator respon-dents that replied said they ONLY do weddings and will not take any other type of DJ work. These DJs statistically average 8.2 weddings per year. All of these respondents who ONLY do weddings (but two) said they have total annual gross company sales between $0 and $50K. There are only two respondent exceptions in the data that make more than $50K in total gross sales that ONLY do weddings and refuse to do any other type of events. Nearly all said it was the same for the number of events performed in 2015 for them.

TRENDS WITH EVENTS• 48% of single operators said their number of wedding

and ceremonies went up compared to 2015.

• 22% said their number of weddings and ceremonies went down.

• 30% said the number was the same as in 2015.

RATES• 57% of all respondents said they raised their wedding

ceremony and reception rates from 2015• 6% of all respondents said they lowered their wedding

rates from 2015• 37% of all respondents said they left their wedding

rates at the same as 2015 levels

With other events (mitzvahs, corporate events, school / youth events, weekly events) nearly 100% of respondents said they kept their rates the same.

CANCELLATIONS• 10% of all respondents said they had more cancella-

tions than in 2016 than in 2015• 46% of all respondents said they had fewer cancella-

tions in 2016 than 2015• 44% of all respondents said they had the same number

of cancellations in 2016 than in 2015

EVENTS



TIME IN THE BUSINESS• 4% of respondents have been in the DJ industry less

than 3 years• 20% of respondents have been in the DJ industry 4-10

years (NOTE: there is a shift towards multi-operators here)

• 23% of respondents have been in the DJ industry 11-20

years (NOTE: the number of multi-operators sharply decreases here)

• 33% of respondents have been in the DJ industry 21-30 years

• 20% of respondents have been in the DJ industry 31+ years

HIRING• 31% of all respondents said they plan to hire in 2017. Of

those planning to hire:

• 61% said they are planning to hire DJs

• 21% said they are planning to hire administrative/office staff

• 18% said they are planning to hire sales staff

• 2 replies for hiring a “helper” or “roadie.”

EQUIPMENT PURCHASES, PAST, PRESENT AND FUTURE:(Purchases defined as $500 at one time, or over $2,000 in one year)

• 81% of respondents said they purchased gear in 2015

• 78% of respondents said they purchased gear in 2016

• 78% or respondents say they plan to purchase gear in 2017

MUSIC LIBRARY48% of respondents said they get their music from a promotional DJ/VJ service. The most popular locations are:

1) Promo Only2) Prime Cuts / TM Century3) Top Hits USA4) RPM

• 10% of respondents say they still buy their music at retail stores (such as Best Buy, local record stores, etc).

• 95% of respondents said they want to own their own music and not rely on a cloud based or streaming system.

EYE OPENING: 10% say they share music with other DJs to build their library.

DJ SOFTWARE• 56% of respondents use either Virtual DJ or Serato DJ/

Scratch Live.

• 7% use Traktor

• 5% use PCDJ

EYE OPENING: about 3% of respondents only use CDs and do not use computers at all.

VIDEORoughly 2% say they offer VJ service. Of those respondents, most say they get video off YouTube, and share among friends to build their video library. DJs that do not offer VJ services say it’s primarily because they feel there is not enough demand; it is too difficult or too complicated; not enough content; not enough output devices; or too vulgar.


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EXPERIENCE

TECHNOLOGY, ETC.

BIGGEST OPPORTUNITY FOR THE DJ INDUSTRY IN 2017• 23% of respondents say their biggest opportunity is to

make better use social media.• 17% of respondents see changes in technology as an

opportunity.

EYE OPENING: Several comments worth noting: the uncertain-ty of the US Presidential election can either be perceived as an opportunity, or a concern. About 19% of respondents expressed both tremendous opportunity and also a great concern to their business that seems to be directly linked to the election results and those changes to the US economy that may result. Many respondents noted in the comments section that they feel there is more opportunity in their market because they feel the quality of the DJ is decreasing, many DJs are retiring, getting frustrated and quitting or simply moving away hoping that this will lower the number of DJs in their market.

BIGGEST CONCERN FOR THE DJ INDUSTRY IN 2017• 31% of respondents say the biggest concern facing the

DJ industry is “changing buyer behavior patterns” (ie. the millennial bride and what appears to be erratic buyer behavior pattern) and “social media interference” setting unrealistic expectations.

• 29% of respondents say their biggest concern is the changing US economy.

• 23% of respondents are concerned with the growing trend of DIY at weddings.

EYE OPENING: Some of the “other” repeated responses worth noting in comments section as the biggest concern for the DJ industry in 2017: ease of entry into the market; new DJs who just hobby but have “mad” internet skills; online booking services (ie. Thumbtack, Gigmasters, etc) pushing bid price wars and are training new clients to shop price only; brides now don’t want to meet but simply want a price quote via email or text.

MATT’S FAVORITE QUESTION“If I had a magic wand, the one thing I would do to grow my business is…”

Some of the replies were quite pointed. The most common replies were: have more time in my day; have more client inquiries; more corporate work; do a full website makeover; have a good social media campaign; get actual qualified leads; a stable US economy; find competent DJs to train; find and hire good sales staff; get an actual opportunity to sit down and educate potential brides and grooms; change the attitude of millennial brides to be realistic; force venues to make everyone who DJs there to present copy of liability insurance.


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OPPORTUNITIES AND CHALLENGES

So, after analyzing the data, what is Matt Martindale’s market predictions for 2017?

The sentiment for the DJ industry seems to be hinged on the perception (and interpretation) of the recent US presiden-tial election results. US citizens just aren’t sure what to expect from the incoming administration, nor really know what kind of impact this will actually have on the US economy. Let’s face it: Clients who book a DJ put a DJ into the “luxury goods / services” basket by definition. The DJ is “not needed or absolutely critical” in order to have the event. Demand for these luxury goods and services increase proportionally as the client’s income rises, both at the company level and bride level. Therein lies the opportunity.

All in all, look for consumers (especially corporate) to be “cautiously optimistic.” The corporate sentiment seems to be turning around after a pretty rough 10-year stretch for DJs who do corporate functions. As this occurs, we predict there will be a lagging indicator of sentiment to bookings. Meaning, as companies slowly make more money, they will look for ways to spend more money, and have more (and better) parties. As they make more, hopefully, they will pay their employees more, and that will trickle down into more bookings for private events, like mitzvahs and weddings. Schools, youth events and weekly offerings (ie. bars, trivia and karaoke) will continue to be a stable staple.

The offsetting factor for increased DJ demand as a result of potential clients’ income rising isn’t necessarily an increase in prices. Rather, economic theory indicates that as the demand for these services increases, the supply of the number of new DJs will increase as they look for what they perceive as “easy money.” Look for 2017 to yield single operators trying their hand at hiring DJs and going multi, in an effort to capture the influx of a perceived demand.

Do most potential clients anticipate their income to rise in 2017? From our research, yes. Will they realize those gains in 2017 and then actually have more money to take home and spend on parties and fun? Nobody really knows yet. Could this spawn an “irrational exuberance” in unduly spending in 2017 with consumer confidence spiking and, as a result, cause bookings surge? YES—I believe this is more than likely.

One real wild card regarding to this whole prediction for 2017 is the public perception of news generated by the incoming US administration. Will companies be willing to spend more on things like entertainment and parties? Probably. Could this lead to a surge in cancellations with one sensational news story or event? Absolutely. Thus, we are cautiously optimistic looking for the corporate markets to finally turn around.

EQUIPMENTLook for a slight increase in DJs buying equipment ($500 at one time or over $2,000 in one year) in 2017. This would also mirror DJ company owners’ sentiment on the US economy and incoming bookings.

CANCELLATIONSNot to be the bearer of bad news, but look for cancellations in weddings to increase slightly in 2017 as consumers carefully weigh the decision of spending on a wedding. After booking, a few may choose to shift those “party dollars” in order to capital-

ize on low interest rates and instead use the funds to purchase a home before interest rates climb.

APPOINTMENTSAs internet-based bidding sites continue to grow in popularity, look for the number of actual face-to-face appointments held to decrease before a client books. Bid pricing and ultimately, the price, will be “the” criteria for booking. Translation: It will continue to get harder to meet face to face with clients because all they want is a price. Potential clients know that they control the sales

process by limiting data and personal access.

BOOKING EVENTSLook for brides, mitzvah families and corporate organizers who know what they want and are committed to getting it to slightly increase the time in advance that they will book.

SOCIAL MEDIALook for increased social media “interference” to continue to “muddy the waters” of expectations—especially for brides. For mid-range to higher priced DJs, this will actually become an increasing problem, because the millennial bride knows what she wants, but seems to have trouble communicating what she really wants. Complicating the matter is that she doesn’t want to take the time to meet in person, or even communicate via Skype or even by phone. The DJ is expected to read her mind and just know what she wants...and give the cheapest price. The expecta-tion gap will continue to be clouded by her imagination, percep-tion and expectation.

Brides and grooms know they hold the cards in the power of online reviews. Reviews may become the new leveraging tool. Look for social media to trend more towards mobile devices, in particular for schools, youth and mitzvahs benefiting those DJs that can tap into new and hip ways to reach young teenagers to very do well in 2017.

PRICESSo, we finally come to the sticky wicket. Look for the percentage of DJs that claimed to have raised their rates in 2016 to actually decline. We’re not saying the actual rate charged will decline, which it could, but rather the overall percentage of DJs who claimed to have raised their rates (remember, 57% claimed to have raised their rates for ceremonies and wedding receptions from 2015 to 2016) will likely decline as more competition reaches the market in the 3rd and 4th quarters of 2017. This likely decline will be a response to an anticipated increase in competition.

Look for youth and weekly events to remain relatively stable, although here is a hint there may be a slight decline in those rates as more new DJs come into the market place looking for what they feel is “fast, easy money.”


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MARKET PREDICITONS

WHERE WE’VE BEEN... AND WHERE WE’RE GOINGFirst, weddings. Brides seem to be trending away from person-alized services to some degree, nationally. Yes, some brides still want all the bells and whistles that they see in lavish social media photos and on TV shows, but many do not. Or looked at from another angle, maybe she really is okay with all the bells and whistles but doesn’t necessarily see much value in actually paying for them because so many DJs just “include” it in their prices anyway.

The reality is, she just wants a great party, and if every bell and whistle is included in the low price quote request (that she sent with only her first name and an email address), then great. If not, she’ll keep shopping because she doesn’t know how to communicate what she wants. What she really wants, is that one memorable moment from her day; not necessarily a “wow” moment to dazzle guests with technology, sound, lights or pro-duction, but instead, she simply wants to make sure her wedding is, in fact, memorable. She wants to be significant, even social media-worthy, for a day.

Look for millennial brides to continue to shift away from wedding traditions, and trend towards things like a bride’s friend or family member being the “host” to announce the grand entrance. Data seems to support the fact that brides are opting for simple introductions, a couple of toasts, and a shortened, non-choreographed first dance.

Do weddings still have lots of formalities? Sure! However, many couples seem to be skipping formalities in lieu of a great

party. Therein lies the potential problem for DJs. IF her percep-tion continues to be fed by the fact that the DJ “just plays music and makes an occasional announcement,” then her rationale is why have a professional DJ when she could have her friend, a family member, or the cheapest DJ she can find do it anyway?

Weddings are about having a great party. Look for 2017 to be a tug of war between technology and individualism. Some DJs want to create “wow!” weddings with lights, sound and produc-tion. Others will strive to use creativity with simplicity to provide a different and unique experience that other brides can’t copy, and technology can’t duplicate. The end goal is the same for all DJs who do weddings: to meet the millennial couple who is des-perately searching for individualism and significance.

In the corporate realm, look for an uptick in inquiries and bookings. This will be a very welcome change. Companies will look for innovation in performance, and experience beyond just what technology can offer.

For youth / school events and mitzvahs, also look for an increase in inquiries. Embrace new, flashy and fun technology for the kids. Look at coming up with fresh and creative ways to get them involved with tech as part of the show, to create a Snapchat-worthy and shareable performance.

Weekly events (trivia, bars and karaoke, etc.) should pretty much be business as usual.

Here’s wishing you a successful, prosperous and profitable 2017!


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FINAL THOGUHTS



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