The Role of Dynamic Music IP In Gaming and the Metaverse

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April 29, 2024

Gaming and The Metaverse – Representing a New Age for Entertainment

Gaming has evolved beyond previous stereotypes and has become a vibrant and diverse form of entertainment enjoyed by people of all ages and backgrounds. The metaverse—a futuristic internet space defined and connected through interactive 3D environments— extends these gaming environments. But why is this evolution so significant? Games and metaverses are different from other media forms because they have the element of interactivity not found anywhere else. Interactivity can provide immersion and engagement that can be used to tell stories in ways that no other medium can. While it’s uncertain how interaction in the metaverse will evolve over the coming years, one thing is clear: the growth of immersive experiences opens up new possibilities for the music industry. It significantly impacts the way we experience and engage with music. Despite this promise, the metaverse has untapped potential for the music industry.

Why the Metaverse Remains Untapped Potential for the Majority of the Music Industry

To incorporate music in film or games, there is a known standard on licensing – defining what can and cannot be done. This does not currently exist in the metaverse. Consider the scenario of an artist or record label wishing to license a song for use within a metaverse game. In such a scenario, the rightsholder must individually negotiate each IP license on a one-to-one basis. The negotiations for such licenses can become exceedingly complex and expensive, given the need to determine terms around usage rights, distribution, and royalties in environments still being defined legally and commercially today. 

Every time this artist or label wishes to license the same IP for similar purposes, they must start negotiations from scratch. The situation is even more daunting for independent artists or smaller entities, as they often need more visibility into the rights available for licensing and the resources to engage in such negotiations. The current static model of intellectual property management, with its high costs and lack of scalability, effectively limits participation to large and well-resourced companies. 

The Complexities of IP Rights in the Digital Age

The music industry’s IP and rights model isn’t built for today’s digital landscape. In the metaverse, users aren’t just playing a game; they’re blurring the boundaries between player and creator. Beyond traditional consumption and media formats, the metaverse offers immersive, interactive experiences where users actively engage with content. The dynamics of gaming and the Metaverse demand more from IP than what is currently provided in the industry’s rights model—beyond consumption in the traditional sense.

Music creation tools within virtual environments could empower users to co-create, remix, and share their music seamlessly with each other throughout those worlds. For instance, envision a scenario where a user desires a radio to automatically start playing when someone enters the user’s virtual home in the Metaverse. The user can select certain preferred songs to be played on the radio. However, they might wish to modify various elements like the tempo, style or overall ambience to align with particular in-game conditions, such as the identity of the visitor entering the house, the in-game time of day, or other in-game characteristics. 

However, existing copyright laws must adequately address the complex web of ownership and usage rights associated with this kind of remixing or user-generated content in immersive worlds, leading to legal ambiguities and disputes. 

Towards a Dynamic Licensing Model for the Metaverse

The high-friction process of negotiating licenses one-to-one in the Metaverse excessively burdens artists and labels, making it impractical to consider spending time and money on these potential opportunities. The high-friction nature of the traditional one-to-one system calls for a more dynamic approach where intellectual property owners can establish digital licensing terms and conditions for anyone to access and exploit – in any application or environment. This would enable anyone to license an artist’s work and use it online digitally. This streamlined many-to-many licensing mechanism – based on NFT licensing frameworks – would enable a scalable foundation for the widespread use of IP beyond traditional formats, allowing the IP’s value to grow and expand.

What is the Role of Blockchain in Dynamic IP Licensing?

Blockchain presents the infrastructure needed to reshape the interactions among creators, users, and intellectual property within new digital environments like the Metaverse. “Real-world-asset (RWA) tokenisation” is central to this process, offering a method to convert traditional IP and its associated rights into programmable digital tokens on the blockchain. This turns music IP into a programmable asset and enhances the IP with software modules that facilitate efficient rights management, licensing, and monetisation.

The tokenisation of music IP streamlines and digitises traditional licensing processes, significantly reducing the time and costs linked to conventional IP management. By programming the rules of engagement within tokens, applications of music IP in digital environments can be licensed without having to negotiate specific terms on a one-to-one basis. Establishing an open, transparent, and flexible blockchain-based framework for music IP management will unlock the music industry’s full creative potential and pave the way for new music (co-)creation, remixing, and sampling opportunities. It lays the groundwork for dynamic and scalable IP that supports complex, many-to-many IP relationships, enhancing the IP’s value as it evolves alongside the integration of the Metaverse.


Web3 Music Association Analyst