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Roblox's Music Big Foray Into Music : Daily Concerts and the Lawsuit

"Artists don’t have to spend 18 months reaching 2 million people on a world tour,' says Roblox global head of music Jon Vlassopulos. 'They can do it on a Friday night."

On Aug. 13, more than 422,000 players gathered in a London-themed vr experience within the Roblox gaming platform to watch British rapper KSI perform songs from his summer album, All Over the Place. KSI appeared on a video screen onstage while the players in the crowd bounced on floating discs, direct-messaged one another and flexed virtual merchandise like a KSI-branded backpack. The experience was reaired throughout the weekend and received 11 million total visits, according to Roblox, concurrently KSI’s virtual merch line has reached six figures in sales.

It was just the latest music event within the free gaming platform, where a community of 42 million daily active users create and play their own games (there are now over 40 million) and spend actual money on virtual currency called "Robux" to buy accessories for their avatars. Over the last nine months, Roblox has partnered with Zara Larsson, Royal Blood, Ava Max, Why Don’t We and Lil Nas X on music experiences such as virtual concerts (where artists perform as avatars) and new-release launch parties , all spearheaded by Roblox global head of music Jon Vlassopulos. A former DJ, Vlassopulos got his start helping the music business adapt to the digital era: He led business development at BMG in the late 1990s, then managed entertainment partnerships at AT&T Wireless when ringtones were the rage. He joined Roblox in August 2019 with a plan to socialize the music-listening experience through games. "

We had gotten stuck in a bit of a box with [digital service providers], and it felt like there was more opportunity to have a [listening] experience that was hyper-social," he says.

For Roblox’s first-ever virtual concert in November, Lil Nas X wore a motion-capture suit to live-debut his single "Holiday" as an avatar in a winter wonderland, attracting 33 million total views across four airings. Since then, Roblox has only deepened its musical footprint. Warner Music Group joined the platform’s $520 million series H investment round in January, and over the summer, Sony Music Entertainment and BMG each formed partnerships to bring their artists into the game.

Roblox, which went public in March with a $41 billion valuation, reported $454 million in revenue in the second quarter of 2021, a 127% year-over-year increase. Along the way, Roblox has faced criticism from the National Music Publishers' Association, which, on behalf of more than a dozen publishers, alleged in a $200 million copyright infringement lawsuit filed in June that the platform is hosting a "massive" library of unlicensed songs uploaded by users. The company is also up against stiff competition from gaming platforms like Fortnite, which has put on musical spectacles with Travis Scott and Ariana Grande. But as Roblox racks up partnerships with fashion brands and TV shows — including Gucci and Stranger Things — alongside labels, Vlassopulos is optimistic about his vision: turning Roblox into an experiential hub akin to Las Vegas. "It’s our responsibility to have a place where if you are a music fan, you should have all different types of experiences that fit your interests," he says. "There should be hundreds of shows every day."

What makes virtual merch such a lucrative opportunity? We’re a microtransaction platform. The community is used to spending 100 Robux, 200 Robux, 500 Robux — [about] $1, $2, $5. Lil Nas X is on a path to eight figures for an annual run rate [for his Roblox merch collection]. And there’s no inventory or manufacturing. We can all go on holiday for a month, come back, and the community has been buying every day. For the ar sales.

How are artists and labels compensated for virtual events and merch? Are you paying artists to perform? It’s almost the other way around, where they’ll cover the cost of activating and often also spend media dollars to support it. Think of us more like the executive producers. We haven’t done that many [virtual merch] deals, but 24.5 cents on the dollar is our general platform revenue share.


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