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What the Metaverse Means for Music Creators (Guest Column)

"We should be bullish about songwriters' contributions to the metaverse at the outset, and not accept that emerging technologies are either oblivious to the licenses necessary or don't have the…

There is a lot of buzz around the concept of a “Metaverse.” The company formerly known as Facebook recently announced its ambition to create a futuristic, immersive social experience, and to achieve this, it will become a new hub for listening to, discovering and interacting with music and music creators. Undoubtedly, music will be as important to the metaverse as it is to the real world.

As Mark Zuckerberg recently told The Vergecast, “You might be able to jump into an experience, like a 3D concert or something, from your phone, so you can get elements that are 2D or elements that are 3D. … I think that this is going to be a really big part of the next chapter for the technology industry, and it’s something that we’re very excited about.”

Merging social media, gaming, consumerism and other forms of entertainment into one innovative digital universe holds great promise for the music industry. And while the terms and technology will change, the rules have not. Music must be licensed and paid for regardless of how it is consumed, which bodes well for songwriters in this new frontier.

For example, Epic Games, the company behind Fortnite – which recently presented Ariana Grande’s Rift Tour – gives a glimpse into the metaverse’s potential. These events can attract viewership far beyond what a stadium tour could hold for an experience far beyond listening to the radio. This virtual platform also gives artists the ability to ‘perform’ more frequently and for millions of fans, allowing the generation of much more revenue.

Accelerated by the abrupt transition to in-home entertainment forced by the pandemic, Big Tech is exploring and investing in virtual experiences involving music like never before. Behemoths like Microsoft have already begun building out a music component to their massively popular Teams platform. Disney, which is beloved as much for its animation as the music which accompanies it, recently entered the metaverse market. The bottom line is that the investment in the metaverse points to people spending much more time and money consuming music in new and innovative ways.

Why is this good for songwriters? Because music will be a crucial component of the metaverse and the rules governing its use will be much more favorable.

Playing music in a public forum requires a performance license with royalties doled out by the PROs: ASCAP, BMI, SESAC and GMR. While the performance right is technically in a free market, ASCAP and BMI are governed by WWII-era consent decrees which considerably devalue this space.

However, say a platform wants to host a concert in the metaverse. Since this will take place in a curated reality, synched with all forms of visual programming, a synchronization license would be necessary. Such a license is unregulated by outdated compulsory licenses and consent decrees, and therefore results in much more parity between what record labels and artists are paid compared to songwriters and music publishers. Everybody wins, because in this space songwriters can say no, therefore they have the ability to negotiate much fairer rates. Rates that companies like Meta, Apple, Google and others can clearly afford.

The idea that consumers may spend a great deal of time in a music-filled metaverse points to growth in the value of song copyrights. This, among other factors, has no doubt contributed to the rampant investment in music catalogs. This is due in part to the pressure put on platforms to license rights relating to new forms of consumption – even when they have initially denied the value and necessity of that music to their offerings.

In a little over a decade, we’ve seen myriad platforms emerge. So many in fact, that almost 30% of publishing revenue today comes from sources solidified through deals done in the last 15 years at the NMPA – all with players who originally claimed they did not have to pay publishers and songwriters. Today songwriters receive new income streams from lyrics, ringtones, music videos, interactive streaming, social media platforms, the fitness industry and gaming.

Many, if not all companies using music to attract users to the metaverse, will need to engage in new licensing deals. For instance, Facebook licensed its social media platforms after pressure from publishers and songwriters, and this agreement was beneficial to itself and its users. However, its expanded offerings in the metaverse, hinted at by its CEO, would dramatically expand on terms previously agreed upon.

To forecast some value on the use of music in the metaverse, we can look to other platforms in or entering that sphere. Roblox came to an agreement with NMPA earlier this year that paves the way for music to fill its virtual worlds. Other companies like Twitch and TikTok have also come to the table to compensate songwriters.

Much has been written about how songs as an asset class are on the rise. This will only fully come to fruition if songwriters are valued appropriately by new platforms. We are still fighting for music creators to be paid fairly by streaming services – now valued in the billions – who originally claimed they couldn’t afford to pay proportionally. We should be bullish about songwriters’ contributions to the metaverse at the outset, and not accept that emerging technologies are either oblivious to the licenses necessary or don’t have the ability to properly compensate creators.

Ultimately, while the concept of the metaverse is abstract and will develop and change over time, the fundamental rules surrounding this space are not. If you create a platform that allows users to access and enjoy music, you must ensure creators are paid before the platform is launched. Too often we see tech companies acquiesce only after damages have been incurred, only to feign ignorance at the clear rules of the game.

The laws are clear and the metaverse is an opportunity to bring music creators into the fold as foundational partners. If this happens, the future truly could be virtually unrecognizable and transformative.

David Israelite is the President & CEO of the National Music Publishers’ Association (NMPA). NMPA is the trade association representing American music publishers and their songwriting partners.