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The Future Of Live Events: AR, VR, And Advertising

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Updated Feb 9, 2021, 04:30pm EST
This article is more than 3 years old.

Contributing Author: David Chidekel

As the Covid-19 pandemic continues to wreak havoc on the live festival, concert, and event sectors of the music industry, it is more important than ever that artists take advantage of new revenue streams to help offset current economic losses and facilitate fan engagement without the necessity of traditional live touring. To this end, streaming has provided resourceful, tech-savvy artists with new opportunities to generate revenue while staying connected to fans, often in unconventional ways. Let’s take a look at a number of ways that artists have approached these opportunities.

With the suspension of live touring, many artists are finding it difficult to stay connected with their fans in a meaningful way. This is a serious problem for most artists, since the ability to keep fans engaged (not to mention attract new fans) with past, present and future content is essential to their success. A number of A-list and legacy artists have found online concerts and events that are live streamed for free on various social media platforms (often from home) to be a viable way to connect. Chris Martin, John Legend, Lady Gaga and other celebrities have hosted the Global Citizen’s “At Home Together” concert series. Keith Urban performed a live Instagram concert, with his wife, Nicole Kidman, dancing alongside. Miley Cyrus even hosted a live talk show on Instagram called "Bright Minded: Live with Miley,” where she discussed topics of current interest with various celebrities and prominent professionals. While these types of online concerts and events definitely provide a simple and effective way for artists to stay connected with their fans (what marketers might call “promoting brand awareness”), they do little to nothing to help artists recover lost touring income.

Since most artists still need to earn a living, fan engagement absent some type of commercial activity is somewhat pointless. It is, after all, the music business. In 2019, the top artists on Billboard’s Money Makers list earned between 75-90% of their yearly income from live performances and appearances. When deprived of the ability to perform live, the business of music becomes much more challenging for many artists. Some have attempted to offset losses by performing online pay-per-view concerts, in which viewers pay a fee to watch an artist or band (either together or in separate locations) perform live music streamed at a specific time through a digital platform on various online and mobile devices. In 2020, Bandsintown estimated 60,905 livestreams took place between March 25 and December 12. Streams with 10,000 or fewer ‘trackers’ accounted for 46,000 (roughly 75%) of the livestreams, streams with between 10,001–250,000 trackers accounted for 19.1%, and major artist streams with 250,000 or more ‘trackers’ accounted for 3.9%. One example of a successful pay-per-view virtual live concert was superstar Korean boy band BTS’ “Map of the Soul ON:E” concert, which was reportedly viewed simultaneously by over a million fans worldwide. However, while there seems to be a viable audience for online pay-per-view concerts, it remains uncertain whether and to what extent fans are willing to pay a fee (or ticket price) to view them. I would assume that for most artists, revenues derived from online pay-per-view concerts to date have not come close to offsetting lost touring income.

Virtual reality concerts, although less common than online pay-per-view concerts, are potentially much more lucrative. A virtual reality concert is one in which real world users (i.e., “players”) participate (in avatar form) in a live streamed concert performed by a real world artist or band (also in avatar, animated or even anime form) within a video game or other virtual environment at a specific time. Last April, Travis Scott held a live virtual reality concert called Astronomical within the Fortnite video game platform. The concert (or perhaps festival) was comprised of five shows available at specific times over a two-day period and included virtual backstage and other VIP events. The record breaking 12.3 million unique players that concurrently participated over the two days experienced an interactive video game environment featuring state of the art, fantasy-driven special effects, in which their avatars could jump, dance, and teleport around the Fortnite platform, while a massive, virtual holographic image of Scott performed. While players didn’t have to pay to participate in this event, during the five days immediately following, Scott’s social media presence increased by over 1 million followers, and ticket demand for his live concerts, Spotify earnings, merchandising and sponsorship opportunities, as well as gaming collaborations (including one deal with Epic Games which reputedly grossed Scott $20 million) increased dramatically. In light of the success of Astronomical, Fortnite and other virtual platforms are now considering establishing “pay-per-view” virtual reality concerts in the near future, although it’s uncertain whether requiring players to purchase a “ticket” for such an event will have a negative effect on overall participation. It ultimately may make no difference to most artists whether or not their virtual concert is “pay-per-view,” particularly if they can use the popularity of the event to generate significant revenues from the exploitation of recorded music, publishing and ancillary rights, as did Scott.

In the near future, we can expect to see the further virtual augmentation of reality as artists increasingly utilize next generation technology to directly engage with fans. Advertisers, who traditionally viewed live events as merely low cost sponsorship opportunities, will be increasingly incentivized to commit large amounts of advertising dollars as new technologies enable brands to engage and activate fans (attendees and viewers) in real time through various digital consumer marketing tools. For instance, wWith the adoption and proliferation of AR technologies, advertisers can now overlay virtual advertisements (perhaps embedded with redeemable digital coupons and incentives) at live concerts, festivals and events, and instantaneously transform otherwise passive attendees into data generating consumers. It is estimated that in the next couple of years advertisers will spend billions of dollars on AR advertising. AR Insider is projecting $2.46 billion in ad revenue by 2022, and popular website medium.com had revenues exceeding $2 billion by the year 2022 as well. Artists must ensure that they are able to capture a portion of these advertising revenues, since it is their fans who attend the events that will drive the ad spends in the first place. Furthermore, artists in holographic (or even animated or anime) form will be able to be projected onto real world stages to perform in front of real world audiences. While still in its infancy in the US, this trend is already extremely popular in Asia. The Japanese recording and performing anime superstar, Hatsune Miku (that’s right, she’s not real), has performed live in front of thousands of fans at live concerts. In fact, had Coachella not been cancelled last year due to Covid-19, Hatsune Miku was booked to headline several shows. And this is just the beginning. Not only will this reduce the costs ordinarily associated with live touring, but it will also enable artists to perform multiple live concerts at different locations simultaneously without having to appear anywhere in person. Rather than audiences around the world simultaneously viewing one live streamed performance by an artist in New York City, a holographic version of the artist could perform “live” at separate venues around the world simultaneously or at different times, supported by all types of AR special effects and native advertising. 

While some may view the activities described above as little more than a fad or gimmick or, at best, a short-term attempt by artists to do something, anything, to keep fans engaged until live touring returns, I don’t believe that this is the case. To the contrary, I would argue that the convergence of media, entertainment, sports, AR and VR, both in terms of content exploitation and advertising, is a trend that has been bubbling under for a few years and has been accelerated by the pandemic (like so many other things). In other words, I don’t believe that anyone is going to put this toothpaste back in the tube. The real issue is going to be how the millions (if not trillions) of dollars generated from these activities will be apportioned amongst the various stakeholders (e.g., content creators and owners, distributors, marketers, event producers and promoters, venue owners and operators, ticketing companies, and the streaming platforms themselves). We’ll know soon enough.


David Chidekel, Partner at Early Sullivan Wright Gizer & McRae, advises and represents his clients in the media and entertainment industries with respect to a broad range of commercial transactions, including corporate, finance, intellectual property and licensing matters. David has represented major label and independent record companies, music publishers, celebrity recording artists, producers, writers/composers, musicians, DJs and managers, including handling all aspects of recording, publishing, agency, management, production, mixing, master use, synchronization and other licensing, distribution, employment, live touring, branding, endorsement, band member, and rights acquisition agreements.

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