Music Rights in the Metaverse: Top Royalties and Fees for Songwriters and Publishers
Updated: 14 hours ago
What you’ll learn in this article:
The main royalties and fees that songwriters and publishers can earn when their music is played or sold in the metaverse:
There is a lot of buzz around the word “metaverse”, and about the opportunities it might bring for the music industry. But as of 2023, it’s not entirely clear how music rights will work in the metaverse.
One thing is for sure, though: as a songwriter or publisher, you have your publishing rights regarding whether your music is used in the metaverse or in the “real” world. Like we said in our 2023 Music Trends report, “music is an inescapable part of the metaverse, and so will be the monetization of it.”
Let’s take a look at the music rights that may apply to the metaverse.
First of all: what is the metaverse?
It’s hard to define what the metaverse is, but you can think of it as an “alternate” reality that integrates both digital and non-digital resources. (One could argue that the metaverse is an extension of reality rather than an alternate reality, but for this article, we'll keep the discussion on the technical side).
Technologies such as avatars, augmented reality, and 3D modeling are meant to emulate “real life”, and integrate the metaverse with it.
However, for music rights purposes, people are still trying to understand and define the metaverse.
Is the metaverse a “place”? If so, music played in the metaverse could generate performance royalties;
Is the metaverse an “audiovisual” work? If so, a concert held in the metaverse would require a synchronization license.
And so on.
As you can see, defining the metaverse will impact the types of deals required to play music in it and the types of royalties that shall be paid to the music rights holders.
In July 2022, BLACKPINK held a virtual concert on the gaming platform PUBG Mobile. "Ready for Love" won an award for Best Metaverse Performance at the MTV Video Music Awards 2022.
Publishing rights in the metaverse: main royalties and fees
Work-for-hire agreements fees;
Let’s understand each one better.
Synchronization licenses for the metaverse
A synchronization license (or sync license) is an agreement for a song to be synchronized with an audiovisual work.
For example, a song "performed" by an avatar in the metaverse could require a sync license, so the recorded sound can be synchronized with the graphics.
The publishing rights holders can earn a fee in exchange for granting permission to synchronize their songs.
Performance royalties in the metaverse
A performance license is an agreement for a song to be played in a public space, such as radio, TV, streaming platforms, or physical spaces (like in a concert or a bar).
If we consider the metaverse as a public forum, then a song played in the metaverse could generate performance royalties.
As of now, it is unclear whether Performance Rights Organizations (PROs) will collect royalties from performances in the metaverse.
Mechanical royalties in the metaverse
Mechanical royalties derive from a song being "inserted" into a device.
For example, a mechanical royalty is earned when a physical or digital copy of a song is sold because first, the song had to be affixed to the CD, vinyl, cassette, or online store.
But a mechanical royalty is also earned when a song is streamed on a music streaming platform because first, the song had to be "cached" in the streaming platform's servers.
If a song or album is sold in the metaverse, these sales can generate mechanical royalties for songwriters and publishers.
If any streaming service is offered in or through the metaverse, it might trigger mechanical royalties too.
Work-for-hire agreements fees
A work-for-hire (WFH) agreement is one in which a songwriter is commissioned to compose a musical work for a specific purpose.
A songwriter doing WFH does not retain publishing rights over the songs (although it may happen in some cases, accordingly to each place's copyright laws).
As the metaverse offers so many opportunities that involve music, we can foresee companies investing in original compositions for their metaverse events, which may lead to WFH deals with songwriters. In these deals, the songwriter would only be due a fee as per the contract they sign. They would not receive performance or mechanical royalties.
A print license allows the reproduction of sheets or lyrics.
If any activity in the metaverse displays a song's lyrics or its composition score, a print license might be required, and the publishing rights holders can earn a fee from that.
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This article is published for informational purposes and does not constitute legal or financial advice. Please note that this content was produced based on the laws and information made available until the date of its publication.