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USD 9.7 Billion Lost – Will Virtual Reality Save the Music Industry’s Future?

Virtual reality live music concert
Published on Aug 25, 2021

Virtual reality as the future of music; no cap on capacity, can have any number of people attend concerts 

Music has been a part of human existence for as long as language has. It has evolved from the prehistoric ages to what we know of it as today. It continues to evolve as human nature continues to evolve and will do so till humanity exists. Starting from the sound of birds chirping to classical music to opera houses to concerts and music festivals, music will always be a part of the human experience. 

The first known concert, where people had to pay for admission to be witness to a musical performance took place in the late 17th century. Since then concerts have evolved, and music festivals have been organized. The first known music festival took place in the 18th century and since then concerts and music festivals have cropped up all over the world, taking place multiple times in multiple places throughout the year, every year.  

All of that changed when the COVID-19 pandemic hit the world. While this may seem like a small sacrifice when compared to the carnage caused by coronavirus, it has still left a lasting impact on the music industry. 

What did the COVID-19 pandemic do to the live music industry? 

Public gatherings were banned throughout the world after the COVID-19 pandemic hit, which meant that there would be no concerts or festivals taking place. This was a major revenue loss for the live music and concert industry. In North America alone, the losses due to the pandemic were reported to be more than 30 billion USD (Variety).  

Music industry loss in North America

The revenue stream for concerts and music festivals included more than just box office sales, which also suffered major losses in 2020. The live entertainment industry lost more than 9.7 billion USD in the United States in terms of box office sales alone. Other areas where this industry usually makes revenue from were also brought to a standstill because if there were no concerts being organized, why would anybody pay for them? Some of the other revenue streams for the live entertainment sector came from sponsorships, merchandising, and more.  

There were other industries that suffered because of this as well. Transportation, restaurants, hotels, ticketing portals, and all other economic activities that were related to the live music industry went through huge financial losses. 

The global music industry in 2020 was worth 23.1 billion USD (Statista), and streaming services recorded over 56% percent of all the revenue generated, notching it up to 11.9 billion USD around the world. The way people consumed music changed due to the pandemic and the spending patterns changed along with it.  

For example, the record stores reported losses as there were less people buying physical copies of music, and streaming services observed a hike in their sales by providing a platform where users could listen to music easily from the comfort and safety of their homes.  

The way that people consume music and the times when they listen to music have also shifted during the pandemic. For example, people would normally listen to music while they were on their way to work, or exercising at the gym, or relaxing. They would normally use their smartphones or the car radio to listen to music. When the lockdowns were imposed and travel was restricted, people started listening to music differently. They opted to listen via their smart home devices (such as Alexa or Google Home) or through their smart TVs.  

It was also observed that more people were listening to or looking for more relaxing music than ever before. This could be attributed to the stressful environment everyone was living in due to the pandemic. 

Future of live music industry

While the live music industry was suffering, record labels and organizations had to come up with new and creative ways to make a living. This led to an increase in virtual streaming of live music, giving birth to virtual live concerts. 

There are multiple platforms that musicians could use to reach out to their audience such as YouTube, Instagram, Twitch, and more. The tools were all readily available to them, and all they had to do was utilize them and build on this opportunity that was presented. Many artists started hosting live virtual concerts and gigs, and there were even live virtual festivals around the world.  

Consumers had to pay a nominal fee, which they didn’t mind since it was way cheaper than going to an actual music concert without the additional travel, transport, accommodation and miscellaneous costs. All they had to do was log in to the portal and watch their favourite artists perform from their homes. They managed to bring the music festival culture directly into their homes. 

One step into the future of music 

In 2019, Marshmello did a virtual concert in one of the most popular games today, Fortnite. The total attendee count reached up to 10.3 million, which was a record breaking number of attendees for a concert. The virtual concert was a hit, but it was nothing compared to the show Travis Scott did during the peak of the pandemic in 2020.  

On the day of the concert alone, there were 12.3 million people logged in and attending, clearly blowing the Marshmello concert out of the water. But, this concert was open for viewing for multiple times on multiple days, making an even bigger impact. The total number of participants who attended the Travis Scott in-game concert reached a whopping 27.7 million (Polygon). The event was attended 45.8 million times, which means many players went back and watched it at least twice. From 10.3 million attendees to 45.8 million attendees in one year, the virtual reality space for music was clearly a big hit. 

Virtual music concert audience

The Travis Scott concert during Fortnite was engaging and people could interact during the event. They could head bang, move about, and engage with the audience, just like they would if they were at the actual physical concert. Virtual reality and music are a budding relationship that has no chances of ending any time soon. 

Combining virtual reality with music can alter the course of how we look at concerts, music and live music forever. 

Read also: OTT subscribers complete 98% of all video ads – Media & Entertainment trends 2021 

Virtual Reality as the future of music 

The world is slowly regaining a sense of normalcy. The vaccination drives are aggressively underway, and more and more countries are opening up. This means that the live music industry is also starting to recover. More events are taking place across the world, and all those people who have been cooped up for the past year are itching to go out and experience the world the way they did in 2019. 

While virtual reality concerts and music experiences gave them the experience of being at a concert from the comfort of their home, most people just missed being in a crowded and sweaty environment, barely audible to the person next to them, listening to music and being a part of the experience.  

But that does not mean that it is the end of virtual reality music concerts. In fact, it is only the beginning. Virtual reality concerts provide artists a whole new platform where they can engage with their audiences without even going on tour. There is no need for additional venue bookings, making travel arrangements, and putting up with all the hassle for musicians just to get their show on the road. They can do it from one, or maybe two venues, if not their homes, and they can still perform for a significantly larger number of people. 

The best thing about virtual reality is that it has limitless potential. The in-game live virtual music experience is the tip of the iceberg. There are so many possibilities for creativity and innovation that haven’t been thought of yet, and virtual reality has the ability to change the way we access music forever.  

Even if there are music festivals taking place physically, and there are thousands of people who attend, it is nothing compared to the millions of people artists can reach out to using VR platforms. There is no doubt about it, virtual reality is going to reshape the future of music. 

The only possible con of a virtual reality music concert is that listeners won’t get the same feeling as they do when they are physically present at the venue, listening to the music. They can feel inhibited due to multiple factors.  

They won’t get good enough sound if they don’t have great speakers, they won’t get to interact with new people like they would at the real event… but all in all, if anyone got the chance to be a part of a concert that was taking place 10,000 kms away from where they are currently without having to foot the travel expenses, they’d take it. Sweaty strangers or no sweaty strangers. 

Virtual music industry infographic

Is virtual reality really the future?

Yes! Even from the concert venue, it becomes possible for people to participate in the concert virtually, opening up each concert to the entire world. The music industry can increase their revenue exponentially and combine the virtual reality and reality-reality experience into one, and the viewers get to choose which one they would rather experience.  

 The live music industry and virtual music industry can work hand-in-hand to change the music concert experience forever.