The Role of Dynamic Music IP In Gaming and the Metaverse

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April 29, 2024

Gaming has evolved beyond previous stereotypes and emerged as an interactive 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 experiences beyond the traditional formats. But why is this evolution so significant? Games and metaverses are different from other forms of media because they have the element of interactivity not found anywhere else.

Interactivity provides layers of immersion and engagement to tell stories in ways that no other medium can. While it’s uncertain how 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.

Why the metaverse remains untapped potential for the majority of the music industry

To incorporate music in film or tv, 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 who wants to license one of his songs to be utilised within a metaverse game. In such a scenario, the rightsholder must individually negotiate the 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 the rightsholder wants 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 don’t have full comprehension of the IP rights related to music licensing and lack the resources to engage in such negotiations. The current static model of intellectual property management effectively limits participation to large and well-resourced rightsholders. 

The complexities of IP rights in the digital age

In the metaverse, users aren’t just playing a game; they’re blurring the boundaries between player and creator. Beyond traditional consumption, the metaverse offers immersive, interactive experiences where users actively engage with content. Music creation tools within virtual environments could empower users to co-create, remix, and share music throughout those worlds.

Consider the scenario where a radio automatically starts playing when someone enters a virtual car in the metaverse. In this case, the radio owner is able to select certain licensed songs to be played when someone enters the car. 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 in-game time of day or the type of car they are driving. If the user likes the remix being played, they could add it to their in-game catalogue and perhaps sell it in on a marketplace for others to enjoy. Unfortunately, existing copyright laws do not 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. As a result, these kinds of use cases are not possible today. The dynamics of gaming and the metaverse demand more from music IP than what is currently provided.

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. This necessitates 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 many-to-many licensing mechanism 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. The tokenisation of music IP streamlines traditional licensing processes, significantly reducing the time and costs linked to conventional IP management. By programming the rules of engagement within digital tokens, music IP can be mass 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 pave the way for new music (co-)creation, remixing, and sampling opportunities.

Brought to you by the Web3 Music Association (“W3M”) – a non-profit entity with the goal of orchestrating innovation in the music industry. Its mission is to educate music industry professionals, support their digital transformation, and bring them together to collaboratively develop innovative use cases. Created from an extensive three-year collaboration, the association is a lead contributor to the Music Protocol – a dedicated blockchain for intellectual property registration, management and monetisation.


Tim Soens – Web3 Music Association Analyst