The Brag Media
News April 16, 2021

The music biz is learning from the games sector but needs more lessons on monetising fans

The music biz is learning from the games sector but needs more lessons on monetising fans
Pictured: Travis Scott on Fortnite

In the last few years, the music business has been picking up tips from the gaming sector on its superior ways of monetising fandoms.

Virtual concerts on gaming platforms are on the rise since Travis Scott pulled 27.7 million participants during his Fortnite in-game performance last April, and Roblox’s first virtual concert, by Lil Nas X in November 2020, generated 33 million views.

But a new report from MIDiA Research suggests the biz has a long way to go in understanding just how fan monetizing has changed since streaming.

With games revenue almost four times the size of the global music industry last year, Music & Gaming: A New Way To Play said rather than just licence music to games developers to enhance their experiences, music rights holders should change their approach to say they are not simply asking for a share of revenue, but an opportunity to actually grow game success.

“The real challenge for the music industry will be to reimagine and expand the way it currently participates in the gaming opportunity, building above and beyond sync and standard licensing,” according to the report.

“Music experiences in games have also too often been focused on marketing and promotion, for driving streams and ticket sales.

“To realise the full potential, music needs to become part of the game experience itself and thus tap audience demand and unlock in-game spending, which is where the real money lies.”

This is where the music industry as a whole needs a shift in thinking.

“The time is right to explore deals and strategies that are designed to be more native to gameplay environments,” it said.

“Whether it be revenue share on in-game items, or ‘renting out digital real estate’ for a digital festival, with the right to sell items inside the virtual festival environment.

“If the music industry wants to truly capitalise on the gaming opportunity, it needs to become a part of it, not just settle for supplying it.”

Of global gaming’s AUD$246.4 billion value, 68% is based on in-game monetisation. That $125.2 billion is expected to rise to $174.2 billion in 2027 with game revenues at 75%.

Dedicated gamers spend 10.8 hours a week gaming and 7.6 hours streaming music – more than double the average consumption of music (3.6 hours) for all consumers, and above the 6.9 hours for music subscribers.

This is where labels should cash in on monetizing fandom on top of consumption.

MIDiA’s data revealed that 10% of global consumers watch ‘games-related videos every month’, but this rises to 18% among music streaming subscribers.

During the pandemic, livestreaming revenues jumped to $774.14 million from ticket sales and virtual goods, donations and badges from concerts within gaming platforms.

Warner Music Group (WMG) has already been investing an eight-figure sum in Roblox, the popular gaming platform played by two-thirds of US kids aged 9—12, and 100 million global active users who spend one billion hours a month. It is valued at $38 billion.

Warner has signalled wider partnerships in gaming, for greater revenue for its artists and ways to widen their demographic, through virtual concerts and product launches.

Sony Group Corporation, parent of Sony Music Group, this week invested another $257.8 million into Epic Games, the US firm behind Fortnite which has an equity valuation of $37 billion.

It first pumped $322. 3 million into Epic in July 2020.

China’s 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 an essential component of the future gaming landscape,” says Alex Kamins, senior vice president of new business and ventures at WMG.

“There is an increasing appetite from gaming audiences for social, immersive experiences around music, such as Roblox’s virtual concerts and launch parties, and for the ability to use music to enhance and personalize the gameplay experience, such as Fortnite’s music emotes.”


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