When music meets gaming
The music industry and the gaming industry seem to be closer and more communicating with each other. For this reason at one of the events of warming up for Round One, IIDEA And FIMI they asked two experts from the musical world to talk about this link. Paola CatòHead of Streaming & Partner Development of Sony Music Entertainment Italy e Enrico PugniDigital Consumer Strategy and Business Development Director of Warner Music Italy.
Streaming music and gaming, two worlds close together
In the event moderated by Filippo Pedrini, Magnet’s Early Stage VC and Senior Business Development, no time was wasted in starting to outline the synergies between the two worlds. Two sides of entertainment, close together for many reasons. Two realities that are experiencing more and more the transition to digital, which leads music and gaming to often share the same virtual space. Indeed in 2020, even 81% of the revenues of the entire music sector in Italy were derived from streaming: music is listened to online. And thanks also to the work of the record companies, which nourishes the talent of singers and musicians, they have been well 246 Italian artists capable of exceeding 10 million streaming.
But compared to gaming, which has several still valid business models (from the purchase of single games to Xbox Game Pass or PS + subscriptions), for music there is only one alternative. The Spotify model dominates the market. Whether you listen to music with Apple Music, YouTube, Amazon, Deezer – they all offer every artist for a fixed price per month. So there are only two main online revenues: the advertising of free services and the distribution of the share of subscriptionsmade according to the number of streams.
The potential of digital
While it is true that having only one online business model can create problems (first of all it makes it difficult to negotiate higher earnings for artists), digital has undoubtedly revealed great potential in the production of content. Every day singers and musicians from all over the world release over 50,000 new songs. Worldwide, the content created is record breaking.
The difficulty for record companies such as Warner and Sony therefore lies above all in the find the right space for their artists. Even on his own an artist can produce a piece but it takes a lot of work for it to be seen. This is a situation that differentiates the musical market from that of gaming (even if there are more and more independent studios).
Likewise, streaming music makes it easier to understand an artist’s success by using more accurate data. We know that the number of plays on Spotify is a great indicator. But a characteristic feature of the musical world is the “skip rate“: The percentage of how many times listeners skip the song in a playlist.
Music and gaming, new forms of income
In an industry where music streaming is fast becoming the only form of high income, record companies are trying to find new possibilities. A notable case was the partnership of Sony with Epic Gamesbringing the performance of Travis Scott on Fortnite. A combination of music and gaming that, perhaps also thanks to the pandemic, has had great success, gluing many people to the screen. But Sony and Epic have been collaborating on this performance for a long time before all the concerts were canceled. And a partnership sought, because both believe in the potential of this type of project.
Another important dimension to explore is that of Twitch (by the way, have you taken a look at our channel?). In recent months, the platform has really exploded and music channels have become an important channel for finding fans. Twitch rewards fan loyaltysomething that the musical industry watches with a lot of interest.
Sony also launched the Immersive Music Studios to explore the dimension of 3d audio, which offers a huge opportunity to collaborate with gaming studios. Immerse yourself in music as you do with i VR gamessomething that Warner is also paying close attention to.
Then there are the playlist for those who train in eSports and, as soon as competitive live competitions fully resume, a new stimulus for the concerts during events. But don’t then forget about the possibilities digital merchandising: Alternative soundtracks by a famous artist, the suit of their favorite group on Fortnite and much more.
There was also a small space at the conference to talk about NFT, which, however, are still being studied. They are a new and interesting product, but not yet ready for the general public. Although the future could see much more blockchain.
Music, gaming and technology will be increasingly linked in the future. You can follow many other events to “warm up” for the Round One of IIDEA: go to the association’s website to find out more.