TWI MediaTech | The Music Metaverse
Friday 22nd January, 2021
Theme for this week 🕵🏽♂️
Music x Gaming
The Metaverse is coming. But we are decades away from realising the full the vision of a persistent virtual world occupied by billions of people. There are still major technical challenges to be solved. The greatest of these challenges is creating the infrastructure that would enable billions of people to interact with the same virtual world concurrently.
Despite this, the past 12 months have seen virtual and physical worlds converge more closely than ever before. One area that has seen significant momentum is live music x gaming, with 30m+ fans attending blockbuster music events in Fortnite, Roblox and Minecraft in 2020.
GTA joined the party in December by opening an in-game night club called The Music Locker - which has world renowned resident DJs including Moodymann, Keinmusik collective and Palms Trax playing music around the clock. They also added a new radio station hosted by Joy Orbison to their roster which includes stations from Gilles Peterson (Worldwide FM) and Flying Lotus (FlyLo FM).
The opportunity
The recorded music segment ($20bn global revenues) has >80% online penetration. Contrastingly, live music ($30bn global revenues) has minimal penetration. This seems strange to me, as the value proposition of virtual music events is strong for all stakeholders involved. Artists and rights-holders have access to a high margin revenue stream, with a reach and scale that is orders of magnitude greater than physical events (Travis Scott had 12m live viewers for his Fortnite event).
For fans, the cost and friction of attending is lower than IRL events. What’s more, virtual events enable the ‘unbundling’ of live events - allowing fans to attend concerts in a more ‘snackable’ format.
The challenges
Because of this potential value creation, I expect there to be major growth in virtual music events over the next few years. The big question is how will this scale? In 3D environments like games, these events are currently reserved for the top 10% of artists. This is due to the costs associated with creating choreographed audio-visual assets and environments, as well as the fact that the required music licensing deals are bespoke in nature.
For these events to scale, we need to see a considerable reduction in friction for all stakeholders. Most artists don’t need to spend months preparing the stage for their performance. They also don’t need to spend months negotiating exotic licensing deals with the rightsholders ahead of each event. Meanwhile, fans don’t need specialised hardware or to create a user profile each time they want to visit a new venue.
In my view, there is a big opportunity for a startup(s) to address this friction and create a scalable mechanism for music to be distributed and consumed across virtual worlds. A Stripe for virtual music events, if you will. Doing so will require cooperation from multiple parties (namely rights-holders and artists), as well as much greater technical interoperability between game platforms. This is no easy task, unfortunately. While I’m very bullish about music x gaming - I believe we are still years away from a true music Metaverse.
If you’re interested in the evolution of the Metaverse, GamesBeat are hosting a virtual conference on the 26-27 January.
News from this week 🗞
Gaming 🎮
Savage Game Studios has raised a $4.4m Seed round. The mobile developer, which has been operating in stealth until now, is based across Berlin, Germany and Helsinki. It was founded by Michail Katkoff, who also founded popular blog and podcast Deconstructor of Fun. The studio formed last summer and is staffed by a core team of former staff from Rockstar, Wargaming, Rovio and Next Games, specialising in free-to-play and AAA game development. Link
Audio 🎧
Podchaser - a startup building what it calls “IMDB for podcasts,” has raised $4 million in funding. In other words, it’s a site where users can look up who’s appeared in which podcasts, rate and review those podcasts and add them to lists. 8.5 million podcast credits have already been created in the database. Link
Apple today announced a new editorial franchise called Apple Podcasts Spotlight, which aims to highlight rising podcast creators in the U.S. The editorial team at Apple will select new podcast creators to feature every month and then give them prominent screen real estate in the Apple Podcasts app and promote them across social media and elsewhere. This will allow creators to reach a wider audience, similar to how the App Store showcases a selection of recommended apps and games with large banners at the top of its screen. Link
Instagram announces plans to let music artists monetise its platform through a ‘badges’ feature set. Badges let fans tip artists during livestreams in exchange for perks (similar to Twitch or YouTube’s monetisation features). It’s currently testing ‘badges’ with 50,000 creators. Link
AR/VR 🕶
Apple is reportedly working on developing a high-end virtual reality headset for a potential sales debut in 2022. The headset would include its own built-in processors and power supply, and could feature a chip even more powerful than the M1 Apple Silicon processor that the company currently ships on its MacBook Air and 13-inch MacBook Pro. Link
Consumer AR glasses startup EM3-Stellar raised $30k in a Kickstarter campaign. The MR glasses promise to revolutionise gaming with virtual screen displays. Prices start at $500. Link
Virtual music events startup, Wave, have recently announced that they are sunsetting their VR app on Steam. The company, originally known as TheWaveVR, had increasingly started to focus on immersive experiences that don’t require VR. The VR was replaced in their URL and social media handles by XR, which typically denotes mixed reality although it’s also used for ‘extended reality’ or ‘cross-reality’.
Video 📹
Netflix shares soar as it passes 200M paying subscribers. It capped off a year of impressive streaming growth by adding 8.5 million net new paying subscribers during the fourth quarter. Link
TikTok is testing a new video Q&A feature that allows creators to more directly respond to their audience’s questions with either text or video answers. The feature works across both video and livestreams (TikTok LIVE), but is currently only available to select creators who have opted into the test. Link
Other 🤷♂️
Wattpad, the 14-year-old storytelling platform is being acquired by Naver, the South Korean conglomerate, in a $600 million cash-and-stock deal. Wattpad, which originally launched as an e-reading app, has evolved into a highly popular platform where users publish their original stories and more than 90 million people visit monthly to read them. Wattpad has published more than a billion stories over the years, and it claims its users spend a collective 22 billion minutes per month reading these.) Link
Capsule has raised $100,000 in pre-seed funding for a decentralised social media solution where each user hosts his or her own microservice, then connects to others in a mesh. The idea for Capsule started with a tweet about reinventing social media. A day later cryptography researcher, Nadim Kobeissi — best known for authoring the open-source E2E-encrypted desktop chat app Cryptocat (now discontinued) — had raised $100,000 with support coming from angel investor and former Coinbase CTO Balaji Srinivasan.
Hike, India’s answer to WhatsApp (and backed by Tencent, Tiger Global, and SoftBank), has moved on from messaging. Its founder says India will never have a homegrown messaging app that makes inroads unless it chooses to ban Western companies from operating in the nation. Link
Interesting data from this week 📈
Tomasz Tunguz analysed Crunchbase data on Seed through Series C fundings. Below are the fastest growing sectors year-over-year.
Thank you for reading ✌️