Analysis

WMG and Roblox talk music, games and ‘hyper reality metaverses’


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When Lil Nas X performed a concert on gaming platform Roblox in December 2020, it was watched 33m times in a weekend over multiple viewings. Now Roblox has revealed that the show was also a success when it came to sales of digital merchandise.

“The merch for Nas is creeping towards eight figures. We’re in healthy seven figures,” said Roblox’s global head of music Jon Vlassopulos when I interviewed him for the recent CogX conference alongside Warner Music Group’s chief digital officer and EVP, business development Oana Ruxandra.

(Yes, I checked whether this was volume of items or actual money. “That’s money,” confirmed Vlassopulos. “Creeping towards! Officially seven, but on its way to eight, and that’s with very little working.”

This is part of a bigger story that Roblox is pitching to artists and the music industry: that events on its platform can pull big crowds but also generate meaningful revenues. The point was reiterated by Ruxandra when talking about an event WMG ran for Why Don’t We in March 2021.

“They played four songs and then there was a Q&A. There were millions of visits over the weekend, and really robust revenue for the band. Fans were able to buy artist skins, clothing, a number of different accessories,” she said.

“We saw a really massive uplift around social, around streams, around views on YouTube, so the goals that we set for the concert were really fundamentally performed across the board. We saw really robust activity on Roblox, and then also around all of the different platforms around Roblox.”

WMG is Roblox’s biggest music industry partner at the moment. It has brought artists including Why Don’t We, Ava Max and Royal Blood to the platform, but was also an investor in Roblox’s $520m Series H funding round in January this year.

“The dominant trends that we think about, and that we see in digital media all point to a future where entertainment is live, it’s interactive, it’s social,” said Ruxandra.

“Metaverses are nascent but they’re growing. They are spaces in which communities can have shared virtual experiences. Our artists are there, our fans are there… we really believe that the ecosystems that metaverses have created for us enable boundless opportunity.”

Vlassopulos agreed. “If you think about a DSP [streaming service] you’re not really hanging with your mates on a DSP, it’s more of an individual experience between you and consumption of the music,” he said.

“The great thing about the metaverse and Roblox is you’re there with friends… It’s not the end of social media and video, but I think it’s this transition period where it’s not just consumptive. Our kids, and the older kids who’ve grown up on the platform don’t want to just consume. They want to participate.”

“And participate doesn’t necessarily mean creating the whole world, but they want to go in there and do tasks and play with their friends, and chat, and shop. They want to be a part of the world, which I think is a fundamentally different experience than just kind of firehosing videos.”

Roblox has been experimenting with different kinds of music event in the last year. The basic level are album launch parties where a label builds a dedicated experience (i.e. a game, but because these aren’t games Roblox uses the ‘e’ word) for an artist, within which their performance and Q&A is streamed as video.

The Lil Nas X concert was a bigger Fortnite-style set piece performance where he was turned into an avatar to perform within the world itself, using motion capture technology. These are more complex and expensive to produce, but Roblox is currently in the midst of working on its next one according to Vlassopulos.

Then there’s what happened with Royal Blood’s appearance at the platform’s ‘Bloxys’ awards, which he described as “lo-cap” because the band were not motion-captured, but instead had avatars created and animated to sync with their performance.

“It’s like flavours of ice cream. We wanted for the music industry, when you come into the Roblox shop, if you like, it’s ‘What do you want? Do you want strawberry, vanilla or chocolate?’ We didn’t want it to be overwhelming going ‘I want to do something but I’m not sure what to do’,” said Vlassopulos.

Pre-recorded performances have been key so far, but Roblox wants to move towards more events that really are live. “We want to go in that direction so we can do it with more frequency and lower cost, and the hope is they become part of artists’ release schedules… and they should be profitable, so it’s kinda like marketing that also pays you back.”

Ruxandra said that for its part, WMG has been testing out different ways to build these music experiences, working with developers who are new to Roblox as well as those firmly embedded in its developer community already, and also building in-house.

Both said they are keen to make it increasingly easy for artists to get onto Roblox and start experimenting, taking advantage of the fact that it’s an open platform: anyone can build a game or experience for it using its Roblox Studio tool.

“The prediction is that within the next year, we’re going to have major artists – major new artists – breaking on Roblox that are going to be bubbling up through the platform,” said Vlassopulos. “The tools are all there.”

Not every relationship between Roblox and the music industry is harmonious. Recently, US publishing industry body the NMPA sued Roblox on behalf of a group of its members seeking at least $200m in damages for what it described as “Roblox’s unabashed exploitation of music without proper licences”.

This lawsuit is less about the music used in events put on by labels within Roblox, and more about user-generated content: the audio that Roblox users can upload when creating their own games and experiences. The publishers would like it to have a platform-wide licence covering this kind of usage, but currently it operates a DMCA takedowns system.

Vlassopulous talked first in general terms about Roblox’s approach to licensing, before addressing the lawsuit specifically.

“As I come from the music industry, coming to Roblox we wanted to make sure anything that we do is respectful, obviously, of copyright owners and intellectual property… As we’re growing the [music] team, we’re looking to take on more of the licensing,” he said.

As things stand, it’s the label partners who bring the licensing with them when planning a concert or launch party on Roblox.

“We’ve kindly depended on their help for the earlier projects, until we start to get more scale. So we’ll generally have a relationship with great partners like Oana and her team, and they’ll help in terms of bringing the licensing for whatever that distinct project is,” continued Vlassopulous.

“But again, as these projects scale and music becomes more a part of the platform beyond the smaller experiments, we’re looking to take on more of that ourselves and have a relationship, once we can staff up that group.”

On the lawsuit more specifically, he stressed again the early nature of Roblox’s involvement with music.

“We’re excited to have done all the things we have done over the last year, and be able to put money in the pocket of publishers and record labels, and give artists and songwriters a new platform to reach millions and millions of fans around the world,” he said.

“So we’re going to continue doing that, and we hope to continue doing that with more labels and more publishers. so we hope that things resolve soon in terms of the lawsuit.”

Speaking about the platform generally, rather than the lawsuit, Ruxandra suggested that music rightsholders “have to as a music industry be open and nuanced and flexible in our approach… we’re building out the right ways to license and provide real revenue opportunity, as we’re also building out these spaces”.

She went on to talk about the future for partnerships with the games and virtual reality worlds, suggesting that “hyper reality metaverses” are the exciting trend for the next 5-10 years.

“That’s what we think the future is going to look like: hyper reality metaverses where there are ultra-thin headsets or other types of devices that enable consistent digital and physical experiences,” she said.

“They are persistent, they’re synchronous, they’re live, and there’s a community aspect: all of the interactions or community builds. Our presentation of ourselves is avatar-based, not anonymous. These are the things we think the world is moving towards.”

“We really do think these spaces, these metaverses are going to create opportunity. They’re going to be where people exist. They’re going to be where our artists and fans exist, and so today, right now, we’re really focused on experimenting and building the capabilities, building the know-how.”

Vlassopulos, meanwhile, looked forward to a future where music-based virtual merchandise is worth “hundreds of millions of dollars” while also hinting again at Roblox’s ambitions to make music an even bigger part of its platform.

“If you look at where people are spending time… I think gaming is somewhat of a misnomer. I think they’re spending time on these sort-of hyper-social platforms, these metaverses as Oana laid out, and when they’re spending time there they also want to consume music,” he said.

“So we see a path to not having YouTube or a DSP in the background, but having a more integrated kind of metaverse music experience come together, which is again leaning into the social aspect.”

“Maybe you get some virtual concert ticket access, you get some VIP artist world access, you get some merch, you get some listening, you get playlists. I think it’s a really exciting time to connect fans back in a more visceral way with the artist they love.”

Both Ruxandra and Vlassopulos also think that in the future, music’s intersection with platforms like Roblox won’t just be about one-off events: but that artists and labels will build spaces that grow and evolve over time.

“In a couple of years, we think that Roblox and the opportunities that Roblox provides will be a key part of any album release, any album launch,” said Ruxandra. Meanwhile, Vlassopulos suggested that the company also wants to give its users more power to share music.

“Opening up individuals to be almost their own virtual DJs, so… once we get full music on the platform: come to my area, hang out at my house, check out my tunes, and I become my own little VJ on the platform, as opposed to some of the DSPs where it’s more locked down and the platforms are controlling it,” he said.

You can watch the full CogX session in the embed above.

Stuart Dredge

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