Welcome to Plugged In, a newsletter that features the unfiltered thoughts of the CEOs, decision makers and power players at the intersection of technology and music. I’m Micah Singleton, Billboard’s director of technology coverage. I lead Billboard’s reporting on the streaming music ecosystem and the startups that bridge the gap between two of America’s most important exports.
This week: The metaverse has become the north star for a number of key tech and music companies, but is this all noise or really the next step for the internet?
The Metaverse: The Future or The Latest Fad?
Since Oct. 28, when the company formerly known as Facebook changed its name to Meta, the metaverse has consumed the tech industry’s attention, as investors and executives attempt to define what it may become.
While Meta’s name change is a clear signal of its future ambitions and where company founder Mark Zuckerberg and other leadership think social media is headed — along with a very convenient rebranding for one of the most hated and criticized companies in the world — the metaverse is largely still theoretical. The most common definition is a digital, immersive world where humans can interact with each other using avatars, but that’s still being shaped as companies push to build what many have described as the next version of the internet. So, what do executives and investors expect from the metaverse when it finally does arrive?
“There’s going to be a big fight, which has been written about, about how open or closed this ecosystem is,” says one senior executive. “Those who were early visionaries of the metaverse, I think very much focused on an open kind of platform space. But the reason investors get excited about it isn’t about its openness, it’s the opposite. It’s about what companies can do to win and have the winning formula platform-wise, consumer engagement-wise in this new space. I’m not sure the metaverse is clearly defined today. There are tons of the building blocks that it’s going to take to get there and versions of what may look like the metaverse today most likely five and 10 years out will look massively different by the time we get there.”
“This is one of these things where it sounds like bullshit until it’s not bullshit anymore, and historically, a lot of this stuff has sounded like bullshit to me,” one prominent investor says about the metaverse. The investor notes that early versions of the metaverse are already here, with “the best example of that being Roblox, where you have people spending a lot of time in a digital environment that is robust enough to go wherever they want to go with it, as opposed to people just simulating offline things in an online world. And so to me, the metaverse becomes about having a community function that is robust enough on the tech side and has a substantial enough network effect on top of it that it allows, in a sense, unlimited creation within an environmental scope.”
From a music perspective, the investor thinks “the first thing that you’ll see is the ability for people to make music together in a virtual environment where they interact with one another. An environment where kids can freely collaborate with one another across all music technology, build files together, share files with common consent and master in real-time. That’s going to exist.”
One chairperson says the music industry has learned from the past technological shifts and is prepared to play a bigger role in helping develop the metaverse. “We have learned how fast this can develop and we have also learned that this is where our licensing opportunities and growth opportunities are,” they say. “We will be ready and we will jump on it. What we know already is that music is going to be a crucial part of these experiences. If this is the experience generation, experiences require a soundtrack and that means a lot more licensing opportunities beyond just music services as we move forward and the metaverse is key to that.”
Another CEO says it’s up to that next generation — the one after Gen Z, generation alpha — that will likely be the biggest consumers in the metaverse, to define what they want from it before it can come to fruition. “Until generation alpha themselves define what they want out of it, I think it’s going to stay scattered,” the CEO says. I truly think the metaverse has more business-to-business applications than it does at a social community level.”
The CEO says a firm definition is needed and needed soon for the metaverse, less it ends up like 3D TVs and other tech innovations that captured the attention of Silicon Valley for a few years before tapering off. “I would say if that doesn’t happen in the next two years, it’s going to become more amorphous, it’s going to become more challenging to get investment because all this stuff ultimately needs hardware investment and hardware is hard. And it’s going to take a lot to get that type of commitment above and beyond just a pair of glasses.”