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Volume X, Number 187

July 03, 2020

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The E-Sports and Gaming Industries Offer Vital Tools to Musicians in the Wake of COVID-19

Musicians and gamers are no strangers to each other; the two industries have been capitalizing on the crossover of their respective fan bases for nearly a decade. Although these collaborative efforts are not news, the utility of virtual and remote fan engagement has been re-contextualized in the wake of the COVID 19 pandemic. As the average musician derives the overwhelming majority of their revenue from live performances, technologies that can simulate these experiences have taken on a new importance virtually overnight.

Marshmello’s performance within the game Fortnite at the beginning of 2019 revealed how the synergy between music and gaming could be used to scale virtual concerts. This concept was further explored in the COVID-19 era when Travis Scott held a three day Astronomical event series within Fortnite this past April to “perform” his new single “The Scotts”. Fortnite players were able to pause their regular gameplay, travel to a set location, and watch as a giant, digitized Travis Scott morphed from a flaming cyborg to an astronaut while the landscape around him dissolved into several visually stunning outer-space and underwater dimensions. The show lasted about 10 minutes but it collectively reached 27.7 million unique views and 45.8 million total views across several international time zones, crushing the record that Marshmello set, the largest live audience in Fortnite history. While the immersive in-game concert set a new benchmark for fan engagement and interaction with music, what it means for the commercial viability of the touring business remains to be seen.

Without the ability to tour, musicians have migrated to digital platforms. Many have chosen the “live” tools already built into established social platforms, which pay out on ad revenue or number of views. Others are turning to Twitch, a platform devoted to live streaming, which initially became popular for video game live streaming and broadcasts of esports competitions.

According to third party analytics firms, Twitch streaming surged 23 percent in March alone (that amounts to about 1.2 billion hours of streams) and the number of unique Twitch channels increased by over 33 percent compared to the previous quarter. The number of hours watched in Twitch’s music and performing arts category reportedly skyrocketed six-fold between March 8 and March 24, due in large part to both individual musicians and digital festivals moving to the platform as concerts were canceled.

Musicians may prefer Twitch because it offers unique and customizable monetization tools that other popular platforms currently lack. As a streamer fulfills certain criteria (e.g. at least 500 total minutes broadcast in the last 30 days) they unlock these tools by achieving “Affiliate” or “Partner” status. Twitch Affiliates and Partners may earn revenue by charging a subscription fee to grant access to ad-free viewing or additional perks of the Artist’s choice. Twitch’s parent company Amazon offers Amazon Prime account holders one free Twitch subscription per month with the channel owner still getting the subscription fee. The e-commerce giant also lets streamers advertise through its affiliate marketing program, paying out commissions when a purchase is made from links placed on the streamer’s channel, though viewers may donate or tip the streamer directly.

Music companies are recognizing this trend and have launched initiatives to reinforce the symbiotic relationship between musicians, fans and Twitch. Of particular note, concert notification service Bandsintown partnered with Twitch to allow artists who have at least 2,000 people tracking them to streamline their way to Twitch Affiliate status, expediting access to many of the aforementioned tools. This month, SoundCloud unveiled its own Twitch channel, which will feature a variety of industry programming and opportunities for fans to engage with artists and industry experts. The major labels are also paying attention; Columbia Records is bringing artists and athletes together for NBA 2K20 tournaments via its Twitch channel. HIT COMMAND, a subsidiary of Red Light Management, recently announced a partnership with peripherals manufacturer HyperX where the two will combine their resources to curate experiences that further merge the worlds of musical entertainment and esports.

The abundance of deals and synergy are encouraging, but only time will reveal the long term impact live streaming will have on the touring industry. In any event, both the music and gaming industries will continue to integrate and develop new ways of connecting with audiences. Twitch is a prime example of an emerging method of consuming entertainment that is flourishing despite the pandemic.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 148

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About this Author

Associate

Sam Cohen is an associate in the Entertainment, Technology, and Advertising Practice in the firm's New York office.

Areas of Practice

Sam provides strategic transactional support to clients across the entertainment, technology, and advertising industries in connection with a variety of complex commercial transactions, partnerships, and joint ventures. He advises clients on, and drafts and negotiates documentation related to the production, exploitation, and protection of music, audiovisual content,...

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