Gaming Platforms, Alternative Payments Seen as Next Generation for Musicians
Musicians are turning to the gaming industry for additional revenue opportunities, said Evan Heby, Tipalti senior marketing manager, on a Digital Media Wire webcast Friday. He cited rapper Travis Scott as one of the first musicians to host a concert on a gaming platform, “expanding an artist’s audience in a really natural way," by connecting with fans via other avenues fans are interested in.
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In addition to the gaming world, the metaverse holds promise for musicians, Heby said. “Is it just an application for artists that have an appeal to younger audiences,” or can the metaverse traverse older generations “that aren’t as apt to go out to concerts?” he said. “Maybe they don’t want their ears buzzing for the next three days because they were at a concert that was super loud.” He believes there's a market for fans that would like to experience live music from the comfort of their living room via a streaming platform.
Aggregating audiences on a gaming platform like Roblox lets musicians participate in revenue opportunities without the involvement of a label or a traditional talent agency, said Seth Schachner, managing director-business development company Strat Americas. “You don’t actually need a band: You just show up as avatars essentially.” But with major labels like Warner starting to get involved in such platforms, an ecosystem of royalties, artists’ rights and contracts "will still at least overlay some part of the industry.”
Heby said live music will always have a place due to the connection fans feel with artists in a concert setting. Music in gaming was born out of the need for alternatives during the COVID-19 pandemic, Heby said, comparing it to Zoom as a way for people to interact with each other and see each other’s faces when it wasn’t possible to do so in person: “People are hanging out online, so that’s a great place for us to connect with them.”
Schachner referenced discussions of revenue streams on large music platforms and the “negative story from the artist’s perspective.” He suggested new channels, such as Twitch, blockchain, nonfungible tokens (NFTs) -- “independent artist economies” -- could “somehow change the game a bit” by “moving away from record labels as the centerpiece of it.”
Paul Resnikoff, editor, Digital Music News, noted artists have issues with performance royalties, too, with songwriters and artists sometimes waiting 90-plus days “to get a payment on a song they play in an elevator somewhere in Idaho." The model "may have made sense in 1992, but now it's becoming harder to defend that sort of lag,” given the micropayment methods available, he said: “By the time you actually get a payment, it’s hard to tell what it’s for."
Tipalti is looking at how to get involved in the deregulated cryptocurrency market, which is “tricky” for a company that's a licensed money transmitter, Heby said. “As the world pushes forward, that’s going to be something that people demand,” he said: “Demanding to have the option to pay out in crypto to their clients that want it.” He highlighted companies like Venmo and Stripe for “how they’ve shaken up the payments industry so quickly.” Venmo is "ubiquitous" and has become a generic verb for payment, he said, saying that's a position Tipalti would like to be in.
As music becomes more global, payment models will need to vary by region, panelists said. Resnikoff cited a streaming service in Thailand that developed a payment model that meets the norms of Thai customers who don’t want to pay a monthly subscription, preferring instead in-app payments through a provider. Schachner noted Latin American smartphone markets largely operate in a prepaid mode vs. the monthly model adopted by Western countries.
Panelists discussed NFTs at a distance. Resnikoff referenced a T-shirt he had seen that said, “NFTs are a scam,” while noting all the attention they’re getting. Tipalti is “on the fence” about NFTs, Heby said: “We’re waiting to see what happens.” He cited TVs with digital art as an application for NFTs: “Everyone has TVs in their home,” but for the times when they’re not being used, consumers could buy "cool digital art" using NFTs for display on screen, he said.
NFTs are thorny for business, Heby said. NFTs are purchased through dedicated wallets, rather than dollars, for the collectibles being purchased. Roblox issues NFTs exclusively for use on its platform, for instance. “There’s a lot going on in each of those channels and avenues that it gets very complicated, very quickly,” and that’s “a lot to manage logistically if you’re a consumer.” A main wallet that aggregated multiple wallets “would be interesting," he said.