metaverse

Roblox is the most active platform for music in the metaverse, showcasing interactive and immersive virtual performances from artists ranging from Lil Nas X and Zara Larsson to KSI, 24KGoldn and Charli XCX. Given the current success, it is hard to believe that just three years ago, when I started working with Roblox, there was little awareness of the creative and commercial potential for artists in the metaverse. In fact, other than a few execs who knew their kids were on there playing and asking for some Robux, most music industry stakeholders hadn’t heard of Roblox at all.

When they heard the platform had over 100 million users, they were excited by the size of the audience. Roblox was also appealing as — compared to other major consumer platforms with anywhere near the same reach — it was and still is less crowded and free from traditional interruptive advertising. And yet, a few mavericks like Scott Cohen from Warner Music aside, none had yet thought about Roblox from an artist marketing or monetization perspective.

From those initial conversations in 2019, fast forward to 2022 and many artists from different genres have been able to express themselves in new, creative ways by building fun, immersive virtual concerts that have generated tens of millions of net new revenue for all parties. Major music brands like Spotify and consumer brands like Samsung and Deutsche Telekom have now also created their own persistent music worlds.

How did we get here? What are the long-term implications for the music industry? How will fans continue to deepen their engagement with their favorite artists?

How Lil Nas X Became a Lighthouse

Any time there is a new medium like the internet, then mobile, social and now the metaverse, the Music Industry initially treads lightly. Understandably so, as the whole industry is primarily based on the exploitation of rights, which are inherently complicated. So even when interest in metaverse experiences picked up speed, there were still roadblocks to overcome.

Even with the help and expertise of first movers at Sony and Adam Leber from REBEL management in launching the Lil Nas X virtual concert, it’s always hard doing things that haven’t been done before. In particular, new virtual deal structures for the industry to adopt needed to be created from scratch. There was also no “metaverse production studio” to tap to produce the virtual concert. So, with the help of Rafael Brown and Duane Stinnett, we basically had to spin up an entirely new production entity on the fly in order to get the experience built, working with many Roblox colleagues led by Morgan Tucker (now head of product), and Philippe Clavel (senior director of engineering), who managed the platform’s internal social experiences group.

The concert was a creative, technological, and commercial success that reached nearly 40 million people, but there were many points along the way where we weren’t sure we were going to land the plane: It really took a village to make it happen. It was worth the risk, as the Lil Nas X concert began to act as a lighthouse for the other labels and artists to follow. Now, music events have reached, delighted and engaged well over 100 million global fans on Roblox.

Creating Scale and Choice

Since the days of those early Roblox experiences, more and more platforms have emerged that only serve to give the music industry more choice when they want to activate music experiences and reach their fans in the metaverse. If Lil Nas X was a lighthouse, his beacon soon hit a prism that brought to light new formats. From launch parties with video driven performances to listening parties, with artists like Poppy, which were activated in existing Roblox experiences, the richness and diversity of musical experiences exploded.

The scale of the opportunity created a whole new market for metaverse studios to partner with labels, artists and brands to keep pushing the limits of creativity for these metaverse experiences. The process is now there to maintain the end quality but reduce time to market and cost of production. All parts of the music industry are now focused on innovating old ways of doing things to capitalise on the opportunities presented by the metaverse and Web3. Dubit, for example, created metaverse awards show parties for the BRITs and Grammys this year on Roblox, which were the first of their kind in the metaverse. Then, perhaps most notably, the MTV VMAs announced the inaugural best metaverse performance award, bringing virtual concerts into mainstream pop culture. Nominees included Charli XCX for her Samsung Roblox gig, Twenty One Pilots, and K-pop stars BTS for their performance in Minecraft, with BLACKPINK winning for their performance in PUBG.

Collectively, we as an industry are all building a better platform for artists to express themselves and connect with their fans, unlocking new creative and commercial opportunities that will significantly grow the overall business in the next three to five years.

Authenticity, Interactivity and Value for Players

What does all this mean for users? I mentioned earlier that metaverse platforms are relatively free of traditional interruptive advertising that has plagued mobile games, web-based content, and linear television. Will we be able to say the same after the next five years of growth? I’m optimistic. Top of mind with all activations and experiences should be authenticity to the nature of the platform; and providing interactive fun and value to players. The Logitech activation with Lizzo and Gayle was a great example of branded entertainment done right. The experience was super fun for players, featured top artists and was also able to meet the brand’s marketing objectives with close to 7 million people attending the event and engaging with Logitech products like flying “Logitech mouse” cars.

Moving forward there is going to have to be continued focus on ensuring that experiences really need to exist and are not just done to check off a metaverse activation to-do list for a brand or media company. As more professional brands and ad agencies start getting involved in metaverse projects and the builder economy around them grows, I expect the level of creativity to go up. There will also be a lot of discussion about whether an artist or brand needs a persistent experience or whether they should just build an ephemeral experience that coincides with their campaign windows. Generally, I think it will be more of the latter once the market matures.

The more we can all focus our time and energy on building a sustainable ecosystem for artists, platforms, developer studios and builders, brands, labels and publishers that provides values for all parties the more likely that the market will be able to grow and reach its full creative and commercial potential.

Exploring Web3 Connections

The metaverse represents a new platform shift that started with web to mobile and then mobile to social. The brands and media companies are paying attention to where their customers are spending time. Over the coming years, billions of dollars will move to the metaverse which is a more interactive, more immersive platform where hundreds of millions of young people are spending hours of each day hanging out and playing with their friends.

In the medium term, the size of platforms like Roblox, Fortnite, Minecraft and Meta will be hugely appealing to the music industry. As they evolve and all parties continue to creatively collaborate, the music industry will need to see not only marketing exposure from metaverse platforms but also get access to their fans and see new, repeatable revenue streams that justify their focus and investment. Many brands and artists are also already looking towards Web3 — the next iteration of the internet built on blockchain technology.

Whether it’s exploring the possibility of selling tracks as NFTs with perpetual royalties, NFT powered artist fan clubs, new streaming services that can be owned by users and artists directly, or blockchain powered contracts; Web3 offers the potential to bring major innovation to an industry that hasn’t materially changed since the birth of digital music some 20 years ago. It will hopefully create a more equitable market for artists to earn a living by directly connecting with their fans. For example, a universal blockchain wallet would be an incredibly powerful way for brands and artists to connect with their most loyal fans directly by adding value to their lives with exclusive digital rewards. Concert goers will be able to get rewarded for attending events by getting collectable NFTs that could in turn unlock virtual after party events in metaspaces powered by platforms like Vatom. We are at the very beginning of the birth of one of the most exciting and transformative marketing eras since the birth of the Internet.

Where Next?

Three years on from Lil Nas X, we are still at the beginning of building the future of music in the metaverse, and there is still massive upside ahead. For it to keep growing and realise its full market potential, platforms will need to help their music partners protect their IP, market directly to their fans, easily create compelling multimedia experiences, create sustainable new revenue streams, and have their experiences discovered by the right users.

Even more importantly, anyone building a music experience in the metaverse needs to ensure that their primary focus is always on delighting the fans. Music in the metaverse represents a fundamental shift in the way fans engage with music. Music is becoming a far more interactive, immersive and hyper social experience that also allows the fan to participate in the creative process along with their favorite artists. If a music experience isn’t authentic, fun, immersive and social, it doesn’t belong in the metaverse.

Jon Vlassopulos is an advisory board member at Dubit and the chief executive officer at Napster.