MelodyVR CEO On Building a Global Music Business Out Of Virtual Reality
"What we're trying to do is non-competitive with any other form of music. We don't want people to stop streaming. We don't want people to stop going to gigs."
"Before we started there was no VR music company. It just didn't exist," reflects Anthony Matchett, founder and CEO of MelodyVR. Four years later, the London-based business is now the owner of the world's largest library of virtual reality music content, has licence agreements in place with all three majors and a number of independents (Big Machine, Roc Nation) and has worked with over 650 international artists, including Post Malone, Wiz Khalifa, Blake Shelton, Kiss, The Chainsmokers, Fall Out Boy, Imagine Dragons, Rag'n'Bone Man, The Who and Bloc Party.
Recent partnerships with Ibiza Rocks and British venues The O2 arena, Alexandra Palace, Arena Birmingham and Genting Arena have meanwhile brought its long-held plans to live stream concerts in VR a step closer to fruition, enabling music fans around the world to experience gigs direct from the comfort of their own home via the VR app on Oculus Go and Samsung Gear virtual reality headsets.
"More and more people are becoming aware of VR and things are definitely starting to hot up for us," Matchett tells Billboard at a key point in the company's history. In May the company raised £20 million in funds through a share listing. The same month saw the launch of its MelodyVR app in the U.K. and U.S. in conjunction with the release of Facebook's much-heralded Oculus Go VR headset.
However, despite generating plenty of press coverage, mainstream adoption of VR technology is yet to significantly take hold. Matchett is confident that will soon change. "These sort of things don't happen overnight," he says, predicting a buoyant future for the potentially game-changing world of virtual reality music.
Billboard: It's been six months since the initial launch of the MelodyVR app, which has since been rolled out to eight additional European countries. How has it performed?
Anthony Matchett: It's been great. What we're seeing now is that more people are getting Oculus Go [devices]. Our user numbers are increasing on a daily basis and its growing really quickly. As you would expect, we see more users on iPhone [using MelodyVR's mobile teaser app] than in VR at the moment, but that gap is closing. One thing we have noticed is that when we have got amazing artists sharing content we have created on their social media channels, loads of their fans are really excited to get it. The problem is that they haven't got a VR device yet. That is obviously a frustration, so we're looking into developing an iPhone or Android version of our platform that can work with a very low-cost viewer bundled with content.
Are you frustrated by the slow take up of VR technology by consumers?
Oculus is doing an amazing job. They've launched a really high quality $200 device and VR sales outstripped the sales of iPhone in its first year. But as with all of these things, it takes time to get into people's homes. I think the next 12 months should be really exciting. According to market research, we're at around 50 million devices. By the end of 2021, it's expected to be around 350 – 500 million. In the run up to Christmas, I think we're going to see a lot more marketing around these devices to get them into more people's hands.
What has the app taught you about how consumers interact with music VR?
The one resounding thing that we know is that music fans really love the unobtainable. That can be a number of different things, from being onstage with a band at The O2 to something as simple as being in the studio while an artist is recording an album. What we're seeing from the data from the first few months of the platform is that the biggest artists – Post Malone, Imagine Dragons – all perform really well. But also we have content that performs really well because it is so unique. The London Symphony Orchestra is often in our top 5 on a weekly basis because it's a really cool experience to sit in the middle of an orchestra and have them perform around you.
How long does the average user engage with the MelodyVR platform?
We have users who will be immersed in a concert and they will stay for the entire length of the show, whether that's 80 minutes or two hours. We also have a lot of people who jump in for half an hour at a time. That 30-minute window is a really nice time for VR. You can jump into this new world, move through different viewpoints and really get a feeling for a gig.
How much content are you currently distributing on MelodyVR?
10-15 artists a month is our current rate. We might start to ramp that up slightly towards the end of the year, but right now that feels about right. We're working with each unique artist's fan base to make sure they get the best experience they can as opposed to dropping 100 artists tomorrow where it's really noisy. We can find a lot more marketing support in terms of really targeted help to artist's fan bases when it's a smaller number per week.
An increasing amount of the content that you produce is no longer just concert related, but other forms of music performance. Is that an area that you'll continue to invest in?
Absolutely. We're about 50/50 at the moment. Whereas if we had this conversation 18 months ago, we'd be almost 100 percent focused on concerts. Our original content can be something really straight forward like an acoustic performance. Or it can be something really complex - a unique 3D world which can give a real journey into an artist's vision and something that can be completely conceptual. We're working with artists on crazy things at the moment like being in space, being in the past. When we talk to an artist and we talk about what can we make, it is a totally blank canvas.
When we can expect live concert streaming on MelodyVR to begin?
Later this year. Obviously in terms of what we do, the live experience is really key. It's also important when a show is sold out to enable someone to have that experience in real time that they can't otherwise have. They may live on the other side of the world or maybe they're not old enough or can't afford it. Giving people the ability to be onstage with a band and have the show happen in real time is really key to our future as a company. If we can also help make VR become a bit of a replacement for secondary ticketing then that's a really good thing too. We've got about 75 different festival events and venue partners. What we're trying to do is non-competitive with any other form of music. We don't want people to stop streaming. We don't want people to stop buying albums or going to gigs. We see ourselves as friends of the music industry and we'll spend time with an artist, their management and label talking about how VR can help them build a deeper connection with fans.
You've previously talked about virtual reality providing rights holders with a brand new revenue stream. Are artists now beginning to see a financial return from VR?
Now we have launched we are generating revenue. In these early years, certainly the next 6 to 12 months, we're likely going to spend more money on creating content than we'll probably get back. We're investing very heavily early on so that as the VR market develops we're able to maintain this position as the ‘go to place' to get music and VR. We're certainly not slowing down. Although we're seeing great numbers on the platform and we're generating revenue for labels, artists and songwriters the likelihood is that we will probably spend a little bit more than we make in profit in the first year or two. That's beneficial to the long-term growth for our business.
How do you see VR developing in the music space over the next five years?
As the tech gets cheaper, lighter, better, more ergonomic, VR devices are going to make it into more people's homes. Have we found the absolute killer use case for music and VR right now? No. No one has. But that's something that we try and achieve every single day. What is the most compelling experience that we can give to music fans that will absolutely blow their minds is something that we're always trying to improve on. From a mainstream point of view, VR is six months old. So it's blank canvas in terms of what can be created. Over the next five years I would hope that we'll develop new formats, new exciting types of content and new experiences to wow fans. Right now we're in Europe and the U.S. Up next is Australia and New Zealand and Canada. Following that parts of Asia. Beyond that we'll look to every corner of the globe.