Music industry learns from games industry but needs more lessons on fan monetization
Pictured: Travis Scott on Fortnite
Over the past few years, the music industry has been garnering advice from the gaming industry on their superior ways to monetize fandoms.
Virtual gigs on gaming platforms have been on the rise since Travis Scott drew 27.7 million attendees during his Fortnite in-game performance last April, and Roblox’s first virtual gig, by Lil Nas X in November 2020. , generated 33 million views.
But one new report from MIDiA Research suggests the biz has a long way to go to understand how much fan monetization has changed since streaming.
With gaming revenues almost four times the size of the global music industry last year, Music and games: a new way to play stated that rather than just license music to game developers to enhance their experiences, music rights holders should change their approach to say that they are not just asking for a share of the revenue, but an opportunity to actually develop the success of the game.
“The real challenge for the music industry will be to reinvent and expand the way it currently participates in the gaming opportunity, building beyond standard sync and licensing,” according to the report.
“Music experiences in games have also too often been focused on marketing and promotion, to drive flow and ticket sales.
“To realize its full potential, music needs to be part of the gaming experience itself and thus tap into audience demand and unlock gaming spending, where the real money is.”
This is where the music industry as a whole needs a shift in thinking.
“Now is the time to explore offerings and strategies designed to be more native to gaming environments,” he said.
Whether it’s revenue sharing on in-game items or ‘digital real estate rental’ for a digital festival, with the right to sell items in the virtual festival environment.
“If the music industry is serious about capitalizing on the opportunity for the game, it has to be a part of it, not just providing it.”
Of the 246.4 billion Australian dollars worth of gambling worldwide, 68% is based on in-game monetization. That 125.2 billion dollars is expected to grow to 174.2 billion dollars in 2027 with gaming revenue by 75%.
Dedicated gamers spend 10.8 hours per week gaming and 7.6 hours listening to music, more than double the average music consumption (3.6 hours) for all consumers and over 6.9 Hours for music subscribers.
This is where labels should benefit from fandom monetization in addition to consumption.
MIDiA data revealed that 10% of global consumers watch “ game-related videos every month, ” but this increases to 18% among music streaming subscribers.
During the pandemic, live streaming revenue soared to $ 774.14 million from the sale of tickets and virtual goods, donations and concert badges on gaming platforms.
Warner Music Group (WMG) has already invested an eight-figure sum in Roblox, the popular gaming platform played by two-thirds of American children aged 9 to 12 and 100 million active users worldwide who pass by. a billion hours per month. It is valued at $ 38 billion.
Warner has signaled broader in-game partnerships, for more revenue for its artists and ways to expand their demographics, through virtual concerts and product launches.
Sony Group Corporation, the parent company of Sony Music Group, this week invested an additional $ 257.8 million in Epic Games, the U.S. company behind Fortnite, which has a stock valuation of $ 37 billion.
He first pumped out $ 322. 3 million in Epic in July 2020.
Chinese Tencent invested $ 425.5 million in Epic in 2012, five years before Fortnite arrived, which means its 40% stake is now worth $ 14.8 billion.
“Music will be a critical part of the future gaming landscape,” said Alex Kamins, senior vice president of new businesses and enterprises at WMG.
“Gaming audiences are increasingly interested in the social and immersive experiences around music, such as virtual concerts and Roblox launch parties, and the ability to use music to enhance and personalize the game. gaming experience, like Fortnite’s musical emoticons. ”