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Metaverse brings new problems and opportunities to music licensing

With the rising popularity of Web3 and the metaverse, songwriters and musicians are wondering what music licensing will look like in this new space.

The term “metaverse” is becoming increasingly common, but while many people have likely heard it used, they often don’t know what it means. 

It can be difficult to explain the term to someone outside the Web3 space, as the metaverse is still relatively new and evolving. The most important thing to know is that it has the potential to revolutionize the internet and how people live, work and play.

The metaverse is a new frontier of innovation and creativity, centered a great deal around media, which should come as no surprise since many Web2 apps are as well, especially music.

There are entire social media platforms dedicated to sharing music, and those that aren’t have incorporated music in other ways. While this has increased awareness about music licensing in digital spaces, it has also highlighted that some systems in place are outdated and struggling to keep up with the breakneck pace of new technology.

With new possibilities for music in the metaverse, the current licensing system may need to be revamped, given the changing ways music is created and consumed, especially with Web3 innovations like nonfungible tokens (NFTs).

Music in the metaverse has had great success. Many top-name artists have performed concerts in the space, and many artists have seen the appeal of releasing music as NFTs.

Despite the uncertainties and the evolving landscape of Web3, licensing music in the metaverse has massive potential.

Current licensing challenges

Technology is rapidly advancing in the Web3 space, and given how new it all is, there are many kinks to work out. Presently, the metaverse is all about experimentation, so if something fails organically, it will serve as a lesson to others.

Despite much experimentation in the metaverse, licensing remains undeveloped. For Web2 social media platforms, there is a known standard on licensing, and what can and cannot be done. This does not currently exist in the metaverse. The mixture of set standards and laws surrounding copyright and licensing isn’t as concrete as needed for a solid licensing landscape.

Spottie Wifi, a musician and Web3 proponent, sat down with Cointelegraph to discuss the current state of licensing in the metaverse.

“There is a difference between traditional licensing for music and licensing music in the metaverse. The main difference I have seen is that a music license for the metaverse needs to clearly include the metaverse as a distribution channel listed within the scope of the license, or the scope of the license should be so broad that the metaverse would naturally be included,” he said.

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This would undoubtedly be a simple solution to what is often seen as a nuanced issue. Still, compared with Web2, there are complications around music licensing in Web3 — thanks to NFTs.

“I recorded a concept album in 2021 about life in the metaverse, and I sold the album as an NFT collection, which grants the NFT holders a license to use and commercialize the music however they like while I still retain ownership of my masters and publishing,” added Spottie Wifi.

“There are NFT collectors that use music in this way in the content they develop, including metaverse experiences, video games, podcasts, films and advertisements.”

Musicians want to avoid exploitation and ensure that their music is used appropriately. This requires properly enforcing intellectual property (IP) rights, which is a complicated process in the metaverse.

“For now, the most effective means of enforcing IP rights as a songwriter in the metaverse is probably to simply enforce those IP rights on Web2 platforms like YouTube, Instagram, etc., through what is known as Content ID. Content ID is an automated system that removes content from those platforms if that content infringes someone’s music copyright,” Spottie Wifi explained. “This can help enforce copyright in the metaverse because a lot of content that is broadcast in the metaverse still comes from those Web2 platforms.”

This brings to light another issue surrounding copyright. If users can create their own virtual spaces or events within the metaverse, they will likely want to include copyrighted music as a part of their creation, just like on social media platforms. This could raise issues around obtaining the necessary licenses to use the music, and monitoring and enforcing those licenses.

As the metaverse is likely to be global, determining who monitors and enforces licenses could pose challenges because copyright law, performance rights, music licensing and regulation would be cross-jurisdictional. The global aspect also causes other issues outside of copyright, with questions about how to properly compensate musicians when their work does get used. As a standard for music licensing gets set for this space, royalty structures that differ from traditional music licensing models could be complex.

Licensing potential in the metaverse

Broadcasting music into the metaverse from Web2 platforms to protect artists might be the easiest thing to do now, but this method will become outdated when music licensing in the metaverse provides more protection.

According to Hendrik Hey, founder of media licensing firm Media Industry Licensing Content — a blockchain-based content licensing company — a new approach to licensing is on the horizon.

“There is a simple interface being developed where any musician can enter their license information. Licensing music in the metaverse works with the addition of blockchain technology. In a blockchain, anyone who knows what they are doing can create a hash in which they store all the information relevant to the license. The assets that someone would want to license are then found in the metaverse itself,” Hey told Cointelegraph.

While not entirely theft-proof, the blockchain hash is relatively safe and transparent, and could make the licensing process much easier.

“The blockchain hash will be automatically generated and would then serve as proof that the information of the license is correct. It is important to be able to prove that you are the true owner of a license and that the information is accurate, and the blockchain can clearly show who the real owner is in the event of a legal dispute,” Hay added.

The developments Hey discusses would simplify the process, as the places where the music is found would provide explicit information about what the licensor wants. The user could then decide if they want the license or not. This cuts out many steps, gets everyone to their destination quickly and can set standards currently missing in the space.

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From developmental and artistic perspectives, the future of the metaverse is bright, with massive potential for success and high earnings for content creators.

When Spottie Wifi sold his album as an NFT collection, he generated $192,000 in just 60 seconds. The revenue went directly to his wallet, and intermediaries were cut out. With NFT releases, the artists own their music and increase potential revenue.

The metaverse could become the new mainstream as its popularity increases. With people like Hey developing the space, and artists like Spottie Wifi experimenting with it, music licensing will become less complicated and no longer fold under the pressure of digital spaces.

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Spotify started testing Web3 wallets integration

The users can access the token-enabled playlists from Overlord, Fluf, Mooonbirds and Kingship with their NFT wallets.

Music streaming platform Spotify expands its Web3 efforts by testing token-enabled playlists in several key markets. 

Overlord, a Web3 gaming ecosystem, reported on Feb. 22 the start of its partnership with Spotify. The token-enabled community-curated playlist from Overlord may now be accessed via Web3 wallets of those who hold the Creepz nonfungible tokens (NFTs) on Spotify. For now, only Android users from the United States, United Kingdom, Germany, Australia and New Zealand can unlock the playlists. 

Other participants in the three-month pilot are Fluf, Moonbirds and Kingship metaverse communities. While Fluf and Moonbirds didn’t share any details on their partnership with the streaming service publicly, Kingship confirmed its participation in a pilot on Twitter. To unlock the tracklist, including the hits by Queen, Missy Eliott, Snoop Dogg and Led Zeppelin, the user should possess a Kingship Key Card NFT.

Related: Music NFTs are helping independent creators monetize and build a fanbase

The announcement triggered a surge of Web3 music tokens. For example, VIB, Viberate’s native token, was up 33%. Other tokens, such as Audius’ AUDIO and Rhythm’s RHYTHM, also rose 4% and 2.5%, respectively.

Back in May 2022, Spotify began testing the NFT galleries on musicians’ profiles. Although without an option of direct purchase, it let the users preview the artists’ NFTs and be redirected to the OpenSea page where they could purchase the items.

The music market remains one of the blooming areas of crypto adoption. In late January, value-for-value podcasting platform Fountain announced a partnership with ZEBEDEE to enable Bitcoin micropayments for podcast listeners. In February, royalty rights from Rhianna’s hit 2015 song, “Bitch Better Have My Money,” has been offered as part of a collection of 300 NFTs.

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Preserving and reinventing music festival legacy in the metaverse

The metaverse has been used as a means of cultural preservation in the past. Now, the legacy music festival Woodstock is using digital reality to preserve its legacy and reinvent its future.

The metaverse is becoming a destination for more brands, companies and communities to connect. A study from December 2022 revealed that 69% of users believe metaverse entertainment will reshape social life. 

Recently, the legacy music and arts festival Woodstock, known for being the most famous of the 1960s rock festivals, announced that it would reinvent itself as a digital world in collaboration with metaverse developers Sequin AR.

Festivals in the metaverse are not a new thing. As digital life has been becoming more prominent over the years, we’ve seen virtual PRIDE parades, cultural events specific to countries and metaverse fashion week.

In the case of Woodstock building its own virtual space, a physical festival’s immense legacy is being both preserved and reinvented for new generations. Cointelegraph spoke with the Woodstock team and Robert DeFranco, the CEO of Sequin AR, to understand how legacy events navigate a digital rebirth.

Jennifer Roberts, a partner at Woodstock Ventures, recalled how the original festival in 1969 “defied so many expectations” as it brought together half a million people around peace, music and art. Now the metaverse allows for a truly global audience to experience the festivals’ legacy.

“We think that today’s Woodstock Generation isn’t united by when they were born but by a shared value system of peace, creativity and compassion. ”

Roberts called the metaverse a “democratizing experience” where, despite physical circumstances, people can come together to celebrate what they believe in.

Connectivity is a big motivator for brands and companies to enter the metaverse. With over 90% of consumers curious about the metaverse, the opportunities to create connections on a global scale are only increasing.

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However, just as in real life, throwing an iconic festival for thousands of people is a big task with many considerations.

DeFranco said the goal of such initiatives is not to replace, but complement what is available in physical reality and the legacy of an event.

“There’s nothing like being at a live show. The intent is to have a community to engage in and an experience you enjoy when you can’t be at a live show.”

Roberts said when preparing to create this digital compliment, the anticipation of new needs for artists, audiences and even music genres is a new challenge. She also said leaving room for serendipity in the process is not to be overlooked. 

“The magic of the original festival was something that resulted from the alchemy of bringing different elements together. We have faith that will happen here too, albeit in ways we can’t predict.”

From indie artists to iconic pop stars, the music industry has been very active in its adoption of Web3 technologies. 

Major labels like Warner Music have been particularly active in bringing performances into digital reality, particularly after its announcement of its own music-centered Web3 platform it is creating with Polygon.

Roberts said however, when it comes to legacy it's not just about keeping the past alive but looking towards the future.

“It’s not about enshrining the past, but rather a way to involve new audiences and write the next chapters of history.”

Over the next seven years, the metaverse is expected to create a market valuation of $5 trillion according to recent reports.  

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Credit cards can bridge Web2 to Web3, says music industry exec

As decentralized finance continues to become more mainstream, traditional financial tools can serve as a bridge from Web2 to Web3 for those who still remain skeptical.

Last year proved that the Web3 space is not just a phenomenon but rather the future of digital interactions. However, as pervasive as the space has become, many are still skeptical as to how it can and will be a part of their lives. 

Many developers are seeking ways to bridge the gap between these two iterations of the web. Cointelegraph spoke with Bruno Guez, the CEO of Revelator, to understand why he believes already existing Web2 financial tools like credit cards can actually be bridges to usher new users into Web3.

Revelator, which works in the music industry that provides labels and distributors the infrastructure to run their businesses, recently announced that it integrated Stripe to help fans seamlessly purchase digital collectibles with their credit cards. 

​​Guez said that making these new digital tools accessible via Web2 tools users are already familiar with, such as credit cards, creates a bridge between these two versions of the digital reality.

“The majority of the developed world uses credit cards for everyday purchases. If we want to usher new users onto Web3, we must provide these web2 users with a familiar and “safe” payment method.”

However, he touched on how using familiar Web2 financial tools helps lessen the hurdles plaguing the industry, such as a lack of education on decentralized money management. 

“If we make the onramp easier and make accessing Web3 assets easier, we can slowly educate them about the power of decentralization, and all that entails.”

He continued to say that this further education includes informing users about self-custody practices so that they can “fully embrace Web3, operate their digital wallets, and never lose access to their digital assets.”

The lack of knowledge has created barriers to self-custody, which have often made centralized exchanges popular due to ease of access and user experience. Though, as Guez pointed out, and as has recently been seen in cases like FTX, when the centralized exchanges go out of business, customer trust and confidence in the industry as a whole is damaged.

Related: ‘Wall of worry’ led to digital wallets, blockchain tech ignored: Cathie Wood

Revelator isn’t an anomaly in the Web3 space for utilizing credit cards to help onboard new users. Many other businesses are seeing how to continue pushing mass adoption by working with tools. At the beginning of 2022, Stripe announced partnerships with FTX, FTX US, Blockchain.com, Nifty Gateway and Just Mining to launch a crypto business suite.

In 2022 it also partnered with Twitter to offer USDC payments to content creators on the platform, along with integration on a Solana-based market maker to offer a fiat-to-crypto onramp.

Guez said that credit cards efficiently on-ramp users onto Web3, while smart wallets are already operating in the background. This enables a “clean way” to perform blockchain transactions without the users needing prior blockchain knowledge.

“In this way Web2 and Web3 tools work together; by abstracting the complexity away from the user experience.”

According to reports which surfaced on  Jan 26., Stripe is working with JP Morgan professionals to advise toward a potential public offering after its fruitful reemergence onto the crypto scene.

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Listen-and-Earn allows Bitcoin payments for podcasters and listeners

The Fountain podcasting app announced a partnership with ZEBEDEE to allow podcast creators and listeners the ability to earn Bitcoin for their time spent with content.

Crypto has tapped into various industries over the years to enable users with the unique ability to micro-monetize their actions. Play-to-earn gaming, along with earning from music streaming, has been the forerunner for this type of crypto integration. 

On Jan 24. Fountain, a value-for-value podcasting platform, announced a new partnership with ZEBEDEE, a financial services company that helps monetize games and apps, to enable Bitcoin (BTC) micropayments for podcast listeners. 

Oscar Merry, the founder and CEO of Fountain, called the ability to listen to a podcast and earn money for it, a powerful combo and the future of content creation.

“A few years from now, we’ll look back at paid subscriptions for content platforms that aren’t related to how much we actually use those platforms and laugh at how basic and inefficient it was. ”

Additionally, through the partnership with ZEBEDEE, users don’t need to know anything about cryptocurrencies to take advantage of the rewards through debit and credit card integrations. 

The CEO told Cointelegraph that through the use of the Bitcoin Lightning Network specifically, instant, permissionless, and low-fee payments can be programmed that work both within the Fountain app and other open RSS standards.

Related: Ushering in a new era of Web3 gaming by making Play-to-Earn sustainable

According to Merry, such a development connects a “fragmented podcasting industry” which currently operates across numerous unsynchronized apps and hosting providers.

He went on to highlight that every minute spent viewing ads and consuming or creating content increases a platform’s value. 

“Why shouldn't you participate in the financial upside of the value you create on the platform?”

As developers continue to prioritize utility in new protocols, adoption of emerging technologies becomes almost unnoticeable. Recently, a “party-to-earn” initiative targeted the electronic music industry to create a currency that is universal across festival goers, clubbers and fans. 

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Web3 can help artists and companies manage music metadata: B2B music exec

Web3 features such as NFTs and blockchain-based systemization offer clarity and a new sense of accessibility to managing music metadata.

The music industry has not shied away from its keenness on adopting Web3 solutions. From nonfungible tokens (NFTs) helping artists connect with their communities to blockchain being used for various use cases including event ticketing.

Another relevant implementation of the technology to be considered by industry insiders is how Web3 tools can help artists and companies manage music metadata.

Cointelegraph spoke with Con Raso, the managing director of B2B music streaming technology provider Tuned Global, to better understand this use case.

In the current Web2 music industry, numerous organizations are dedicated to the management of music metadata, along with its licensing. Though with Web3 developments like NFTs, which can identify each individual usage via blockchain, data management questions come into play.

Raso elaborated that metadata is currently delivered by a major label through the industry standard Digital Data Exchange (DDEX). This can create XML files of more than 200MB, which contain information on contributors, artists, commercial and territorial rights and more.

Cast your vote now!

The creation of “full-length” NFTs, for more than just personal use, is underway. This allows them to contain metadata to be available for use and access also on Web2 platforms.

“Almost all NFTs created today are only for personal use, unable to be exploited as streaming assets. [Full-length NFTs] provide greater clarity and control for artists in how they manage their works.”

However, Raso says Web3 formats are still in their infancy. Though inevitably, this new technology questions old systems and creates space for the development of new ones.

Related: NFTs bridge music communities across genres and blockchain ecosystems

Another example of a new system is a blockchain-based standard in which all parties involved in the creation and licensing would be presented with a single view of a recording or works.

This could help perpetuate effective payments or reporting of metadata usage. According to the managing director, it will be a slow-rolling adoption of the innovation but can pick up steam from the fringes of the industry first.

“Indies play a huge role in this execution as they often (not always) have full control of their works and hence their works can lead this innovation."

He continued to say that, “whether it is an organization that is setting standards, like DDEX or a new entity, the standardization of metadata is a plus not only for platforms but ultimately artists and users."

Both mainstream and niche artists in the music industry are slowly trickling into the Web3 space. While the legacy names in the music world might be more difficult to convince to change their methods, major players like Warner Music have already begun innovating.

Most recently Mastercard announced its plans to launch a Web3 musician accelerator program with Polygon.

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Music NFTs are helping independent creators monetize and build a fanbase

The Agenda podcast chats with Adam Levy of Mint and rapper Jay Kila about nonfungible tokens, Web3 and the struggles of being an independent musician.

The music industry is notoriously centralized, with major record labels often controlling nearly every facet of an artist’s career — from which songs they are allowed to release to what percentage of the royalties they keep and more.

While the rise of streaming platforms like SoundCloud and Spotify has helped democratize the industry and made it significantly easier to get one’s music in front of more ears, it’s still an uphill battle to build a dedicated fanbase and generate enough revenue to survive.

Enter music NFTs. For those in the blockchain space, nonfungible tokens represent an opportunity for fans to directly support their favorite artists, for musicians to build stronger communities with their listeners, and for content creators to build more substantial and sustainable income streams.

To better understand the topic, Cointelegraph’s new podcast The Agenda sat down with Adam Levy, host of Mint — a podcast exploring the Web3 creator economy — and Jay Kila, a crypto-native rapper based in Mumbai who founded OTP India — a digital-collectibles and fan-engagement platform for Indian hip hop artists.

What exactly are music NFTs?

Levy told The Agenda co-hosts Jonathan DeYoung and Ray Salmond that music NFTs generally fall under two categories. The first is ownership-based NFTs, which “are basically tied to IP [intellectual property] rights and royalties. So, when you buy the NFT, you now are entitled to the accrual of revenue that is produced from Web2 audio streaming platforms like Spotify, Apple Music, etc.”

The second is patronage-based NFTs, which do not grant holders any ownership rights but “are collected to support an artist.” According to Levy, “The upside of the NFT is sort of derived from appreciating secondary sales.”

“It really just comes down to tokenizing an audio file and being able to set that up out in the open market and find a collector buy that, engage with that, and join you and your journey as a creator in the music industry.”

How music NFTs are helping musicians

Jay Kila told The Agenda that he first became interested in music NFTs in early 2020 after most of his performance opportunities disappeared with the onset of the COVID-19 pandemic. He found it inspiring that this new technology offered a new way for artists to make a living that was an alternative to the traditional model. That’s when he founded OTP India with a friend of his.

“I just thought it was really cool that you could sell an NFT, and even if you sold it for $300, right, that’s more money than you’ll see from Spotify in like 10 years as an average artist,” he said. “Unless you’re getting millions of streams, it’s almost impossible to make a living from streaming.”

Spotify says it paid out $7 billion in royalties in 2021 alone, a figure the company claims “is the largest sum paid by one retailer to the music industry in one year in history.” But the vast majority of that money went directly to record labels and publishers, which collect enormous percentages for themselves before passing what’s left on to the artists. Plus, Spotify reportedly pays only $0.003 to $0.005 per stream, and major record labels negotiate higher payouts than independent artists receive.

According to Jay Kila:

“NFTs are kind of like the last hope, I think, for independent artists to transition into this model where you can actually get money for your music in a much more direct way. It’s going to disrupt a lot of things.”
Cast your vote now!

Building a relationship between artists and fans

One thing both Levy and Jay Kila wholeheartedly agree on is the power that music NFTs have to better connect creators directly with their fans. The Mint podcast itself practices what it promotes and issues free NFTs to its fans as a way to reward its loyal listeners, grow its audience and generate excitement.

“When I issue those free NFTs, there’s a ripple effect, and I get thousands upon thousands of hits to my website,” said Levy. “I get so many new subscribers, I get new listeners, and the ecosystem just kind of grows every single season.”

Related: NFTs are a game changer for independent artists and musicians

Jay Kila’s OTP project, meanwhile, seeks to build a Web3 community for the Indian hip hop scene centered around collectible digital trading cards, and it’s important for him that this community is accessible to everyone. “Each artist card we’re pricing at $27 because we wanted it to be affordable to the average person,” he said. “It’s not really about getting the money, but it’s about creating that bond between fan and artist, and then building the community.”

In the words of Levy:

“There’s never been a way for you to support an artist directly like you can through music NFTs and buying their collectible and being able to have aligned incentives with watching them grow as an artist as they develop over time.”

To learn more about music NFTs and how Levy and Jay Kila are using blockchain to build community and monetize content, tune into the full episode of The Agenda on Cointelegraph’s new podcasts page, Spotify, Apple Podcasts, Google Podcasts or TuneIn.

The Agenda is a new podcast from Cointelegraph that explores the promises of crypto, blockchain and Web3, and how regular people level up and improve their lives with technology. Be sure to check out Cointelegraph’s other new shows by heading over to the new Cointelegraph Podcast section.

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Mastercard Taps Polygon to Empower Emerging Artists in Web3 Tech

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Party-to-earn: Blockchain breaking down the doors in electronic music community

With access getting more exclusive and ticket prices rising, electronic music fans are at the heart of a new push to rebalance the scene.

Klubcoin: Partnership Material

Electronic music is big business. According to a report by the International Music Summit, in 2021, the electronic music sector was valued at $6 billion dollars and that sector is poised for significant further growth. That $6 billion dollar figure marks a 71% increase from the industry’s valuation in 2020, which was understandably much smaller due to the effects of the pandemic. While revenue is down from where it was in 2019, barring further massive disruptions, the industry is on pace in 2022 to surpass its pre-pandemic heights.

This should be great news for artists and music lovers alike, but there is a caveat. As electronic music continues to flourish, access to festivals and concerts — the heart of the electronic music scene — has become increasingly exclusive. The price of concert tickets is up across the board throughout the entire music industry. Earlier this year, a furor was sparked when tickets to see Bruce Springsteen, an artist with a committed following among working-class people, went on sale for astronomical prices. The high prices were blamed on algorithms used by ticket-selling platforms, but this wasn’t an isolated incident.

Take Tomorrowland, one of the biggest electronic music festivals. In 2022, a general admission ticket to the festival cost about $280. These tickets get sold out very fast, leaving only the more expensive packages, which can cost several thousands of dollars. And that base price doesn’t take into account travel, food and all of the other expenses that go into attending one of these events. The total cost of going to one of these events can be anywhere from $1,500 to $50,000. That is simply not something that the vast majority of people can afford.

Restoring the Electronic Music Scene to Its Roots

Electronic music festivals are about more than just the music. These are events that are supposed to bring together people from all walks of life in a communal setting. The way things currently operate, going to these events is becoming more of a privilege.

However, one blockchain project has decided to do something about this and use its platform to bring electronic music back to its roots. Klubcoin bills itself as the “1st cryptocurrency for all clubbers, festival goers and electronic music fans.” The project’s goal is to create a currency that is accepted by everyone in the electronic music scene. By using the Klubcoin currency, music fans get rewards that include access to VIP events, meet-and-greets with famous DJs and artists and more.

Klubcoin and the Pary-to-Earn Model

The model of operation is called “party-to-earn,” and has been positioned as a means of decentralizing the music and festival scene in a similar fashion to how play-to-earn games have shaken up the gaming industry. Klubcoin gives clubbers and festival goers the ability to earn rewards and gain access to exclusive events by doing what they love. Now, fans will not only be able to get into sold-out events for reasonable prices, once there, they will also be eligible for discounts on food and drinks, get cashback on all their purchases and have access to parties and meetups exclusive to the Klubcoin community. By introducing a means of exchange tailored to electronic music creators and fans, the project is aiming to bring those creators and fans back into focus.

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Klubcoin has already met with some success in its efforts, forging partnerships with some of the biggest music festivals and DJs in the world. The project’s roster of partners now includes Amnesia Ibiza, Bootshaus, Caprices Festival, DJ Mag, Pacha Barcelona, Opium, Motel Particulier and many more. As it progresses, Klubcoin will be looking to integrate into even more festivals and partner with more artists to expand its ecosystem and offer more people alternatives to the current status quo.

For music creators, Klubcoin represents a unique opportunity to expand their audience and contribute to a more direct relationship between fans and artists. The sustained success of Klubcoin could have a profound impact on an industry that is becoming increasingly unrecognizable to its original creators.

Material is provided in partnership with Klubcoin

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

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Festivals in the metaverse: How Web3 projects are taking culture virtual

As the metaverse becomes a place to hang out, more large-scale events will pop up to entice users into digital reality.

The metaverse is the future, or so is the claim of many interacting with the industry — a claim that can be backed up by the amount of activity pouring into the Web3-metaverse domain. 

Engagement in the metaverse of 2022 is looking less like a Sims-esque video game and more like government agencies creating virtual offices to connect with future generations of clients or nations facing the existential threat of climate change using the metaverse to create digital versions of themselves.

One way brands and organizations are using the metaverse is by hosting large-scale virtual events similar to those they already hold in-real-life.

This type of metaverse activity has been seen in many iterations over the last year, one of which was the metaverse’s first-ever fashion week in April 2022. The event invited fashion enthusiasts, designers and brands into virtual reality to participate in activities that mirrored real-life events at fashion weeks around the world. Catwalks, DJ-led afterparties, talkbacks and more were all included in the digital version of the iconic fashion industry event.

In The Sandbox metaverse, a Pride festival was held in June. Similar to fashion week, what could be experienced at a physical event was recreated but with extras only made possible through digital reality, such as a Pride-themed game to be played by festival goers.

Most recently, Decentraland held a four-day music festival with mega-headliners which included Björk, Ozzy Osbourne and Soulja Boy. The event had multiple stages designed with the aesthetic of the artist performing, along with other interactive attractions for festival goers. 

Physical festivals of such caliber cost hundreds of thousands, even hundreds of millions of dollars in cases like the popular Coachella music festival. Aside from the costs, some festivals take years of advanced planning, with months of physical prep time. To call it a big feat to pull off a mega event is putting it lightly. 

As festivals and large-scale events like fashion week continue to become digitized and built into the metaverse, the question arises as to what it takes to create such an experience. Moreover, how is it different from its physical counterpart?

Complex yet creative 

A common thread among those involved with large-scale metaverse events is that it is indeed complex. As it is still a relatively new evolution of online activity for both planners and users, there is a greater learning curve for everyone involved. 

Akhbar Hamid is the co-founder of People of Crypto Lab — which hosted this year’s Pride festival in the Sandbox. He told Cointelegraph:

“An important thing to remember is that throwing festivals and experiences in the metaverse is a very new experience and we are building and creating what that blueprint looks like everyday.”

This “blueprint” includes a different set of logistics and planning depending on the virtual world.

Related: Al tech aims to make metaverse design accessible for creators

Hamid gave the example of The Sandbox. As it is not yet a fully open metaverse and still in alpha, there is a bit more planning involved:

“With metaverse worlds you can create and build within existing worlds and reskin existing user experience, which can allow you to execute in a shorter time frame.”

Generally, building experiences from scratch can take months, he confirmed, with additional time allotted for bug testing afterward. 

Boundaries don’t exist

One thing that everyone commented on is the limitless possibilities for utilizing space in the metaverse, which simply doesn’t exist in the physical world. Raluca Cherciu, the CEO and co-founder of Unpaired — which operated the OxArena venue in Decentraland’s four-day music festival — told Cointelegraph: 

“In the metaverse, what’s possible takes on a whole new meaning and the laws of physics do not apply.”

She continued saying that as a venue with no spatial limitations, from an architectural point of view, they could really create whatever the imagination conspired. In the metaverse, “you don’t have to worry about things like permits and can have much more expansive areas to play with and build in.”

Related:Spatial digital art exhibitions to level up metaverse experiences

Hamid also touched on the fact that apart from no limitations for space in the metaverse, there are also no borders. People from anywhere can attend a metaverse festival and minimize typical festival travel costs like airfare and lodging:

“This opens the doors for global festivals where everyone can share in the same experience from thousands of miles away.”

However, in a borderless environment, issues do arise. As pointed out by Cherciu, one big hurdle is creating schedules that work across multiple time zones, which she said can impact attendance of the event. 

Community at the core

Nonetheless, the community aspect is one of the most important elements for digital festival planners — and not just in attendance numbers. The community is the inspiration for everything that goes into building the experience. 

Giovanna Graziosi Casimiro, senior extended reality and events producer at the Decentraland Foundation, told Cointelegraph that the goal of a metaverse festival is to provide attendees with an “unparalleled sense of belonging.”

She said there will be certain aspects of metaverse experiences that will fall short such as the physical presence of thousands of people or hugging friends at a concert. However:

“I always like to emphasize that virtual events are not replacements for IRL events, but rather complements that allow for more holistic experiences.”

To make a virtual experience altogether complementary, cohesive and intriguing for its physical community, Hamid says a strong understanding of the community that the festival is dedicated to is very important.

He said creators need to ensure that “the game and experience you create speaks to the audience you are celebrating,” adding:

“You want to create a moment that the existing Web3 community will enjoy and an experience that the Web2 community will want to experience as they begin to explore metaverse worlds.”

One avenue that shouldn’t be overlooked when bridging these experiences is choosing artists with an authentic interest in interacting with their community in a new way. 

Web3 talent

As mainstream artists continue to find their way into the world of Web3, festivals and other large-scale virtual events can help further this trend. 

Casimiro says performances in virtual worlds open up much more creative freedom for artists, stating, “They have completely free range to tell their stories and explore their unique narratives however they desire.”

She says the metaverse can even help artists personify themselves as characters or elements from their songs. Identity in the metaverse has been a big topic for users and digital avatars.

When it comes to artists, the metaverse, too, is, “a space for identity expansion through storytelling.” This year, the entertainment network MTV introduced a new award for “Best Metaverse Performance” as an official competition category for their annual awards.

Another aspect of metaverse performance, Hamid says, is that those on the backend can get live metrics and perform “live social listening” to monitor community satisfaction with the performance.

Large-scale considerations

Aside from community satisfaction, there are other road bumps that have to be considered when creating a digital festival. 

“Keeping open and organized channels of communication is one of the biggest challenges,” says Casimiro. “Especially when you’re dealing with several different platforms.” She also said finding a balance between encouraging artists to push their creative boundaries while making sure there is technology available to back these dreams up.

Hamid cited an age-old problem that the Web3 space continuously faces, which is education, stating, “We have to make entering these spaces more accessible and educate the masses on all that is achievable through this technology.”

The simultaneous task of learning what it takes to put on a digital festival while educating communities on how to participate is no small task. However, Hamid believes that festivals are one of the best ways to do so.

“Cultural moments like festivals, like Pride, Women’s History Month, Black History month are all great moments to create unique metaverse experiences that help bring mass consumer awareness to the new technology,” he said.

Looking forward

The metaverse is not going anywhere. According to a Q3 DappRadar report, hundreds of millions of dollars have poured into metaverse development in the last quarter alone. 

The metaverse continues to be a big component of the success of other Web3 tools such as nonfungible tokens (NFTs). According to industry observers, what will contribute to the success of the metaverse and its major events is one primary thing: accessibility. Hamid said that the future of metaverse festivals will “be accessible from any device anywhere.”

Related: The metaverse is becoming a platform to unite fashion communities

Casimiro added that she has produced virtual concerts since 2019 and has no doubts they will continue to be a staple in the industry: “In the last three years, there’s been a cultural shift towards a global village with global access to content.”

For Cherciu, accessibility and social interaction will be the prevailing elements for all metaverse activity:

“The metaverse provides new opportunities for people in economic, physical or mental distress to participate in socially rewarding experiences that otherwise would not have access to/be able to take part of.”

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