But 15 months after venues shuttered, the music world has changed. Tech companies, musicians and even in-person concert promoters have built an entirely new ecosystem around livestreaming shows, evolving them into a slicker and more well-produced medium than existed before the pandemic.
Events companies and labels have invested big in new livestreaming technology. Even musicians have come to love some of the flexibility and direct contact that these new, sometimes more lucrative, formats allow.
Livestreamed shows will likely remain a permanent fixture in the music industry. Yet the extent to which this new medium expands and adapts depends on the most important stakeholder of all: fans.
So far, it seems clear that fans are ready for in-person shows to return. Live Nation, the world's biggest concert promoter, reported that sales for 2022 tours are up double-digits compared to the same period pre-pandemic. Over 80% of fans have opted to hold onto tickets for shows that were postponed during the pandemic, rather than request a refund, the company said.
But there are also signs that fans like livestreaming. Amazon-owned Twitch has seen music streaming grow 550% on its platform, year-over-year, according to the company. Arjun Mehta, CEO of L.A.-based livestreaming platform Moment House, said over 150,000 users have voluntarily given their phone numbers to receive twice-monthly notifications about upcoming shows. And LiveXLive, a publicly traded Beverly Hills-based digital music company, says it's seen livestreaming views grow 533% year-over-year. The company forecasts its 2021 revenues will be between $100 million and $110 million, up from a 2020 high point of $38.7 million.
Yet the appeal to audiences of livestreaming has not been tested at a time when fans' options aren't limited by a global pandemic.
"I still feel like it's too early to be able to come up with real insights," Mehta conceded. "There just hasn't been enough time or volume yet."
And even in the absence of live shows, livestreams can struggle to attract fans.
"A lot of these events have been like trees falling in the forest," said Tim Westergren, the founder of Pandora who now runs livestreaming platform Sessions, at a recent panel hosted by Music Ally, a trade publication.
Add-On Experience Or a New Frontier?
Companies that operate in other parts of the music industry have begun dipping their toes into livestreaming. In January, Live Nation acquired a majority stake in Veeps, an L.A-based livestreaming platform that hosted over 1,000 shows in 2020. Together, the companies plan to outfit 60 venues across the country with equipment that will enable them to livestream in-person concerts. Live Nation chief executive Michael Rapino has even floated the idea of launching a "Festival TV" streaming channel.
Spotify is in on the action as well, having partnered with four livestreaming platforms, including Hollywood-based StageIt, to share artists' livestream schedules with fans. The Swedish company has also announced it will begin streaming concert video on its platform, though the first batch will be pre-recorded rather than live shows.
And for the first time ever, live-events analytics firm Pollstar has begun tracking livestreamed show data, albeit a bit crudely – with little distinction between free and ticketed events.
Regardless of the exact numbers, most observers agree that beaming a live show across the internet can draw a bigger crowd.
"It's a way for venues to drive incremental revenue, which at scale adds up," Mehta said. "But it's not necessarily as great of an experience as it can be for the fans [at home]."
That is why he and others are most intrigued by what livestreaming can do as a medium that embraces its primary purpose as a digital experience.
Travis Scott's concert in the popular video game Fortnite last April was an early example of this. The event featured Scott performing as a gigantic digitized version of himself in a virtual universe where the laws of physics don't apply. Wave followed later in the summer with shows from John Legend and The Weeknd, with the added twist that the avatar representing the artists was being controlled in real-time by the real artist. Creativity has continued and insiders say there is plenty of room for more.
"We're talking about a segment of entertainment that's driven by artists," Veeps Vice President Greg Patterson said.
'A Beautiful Thing': More Control (and Cash) for Artists
For that creativity to be unlocked, the artists must participate, and so far it appears the economics of livestreaming are increasingly attracting those who were once skeptical.
"Everyone I know who did it and did it well was like, 'I made more than I've ever made in a single night," said L.A.-based music manager Ryan Vaughn. "Everybody was so resistant [before], almost entitled, where you have to be in the room, have to experience [the performance]. Now it's like, 'Fuck it, I don't even have to leave the house'."
Veeps said its shows put over $10 million into artists' pockets in 2020.
Twitch said the number of musicians expected to earn more than $25,000 per year on its platform grew 1635% from January 2020 to February 2021. And these artists are monetizing a fairly small fanbase: as of late October, the median followership for musicians making over $50,000 on the platform was just 183. Industry analyst Will Page has shown that, on average, artists can monetize fans on Twitch about 10-times better than on audio streaming platforms such as Spotify and Apple Music.
That means artists can theoretically double their revenue by migrating 10% of their audio-streaming audience on Spotify or Pandora to a livestreaming video audience on Twitch.
These data are encouraging for livestreaming, but extrapolating those figures into a post-pandemic era may not hold up.
Singer-songwriter Rufus Wainwright sees livestream concerts as a new creative avenue for artists. He's been one of Veeps' most active performers, doing over 40 shows on the platform since 2020.
"From what I can tell it was meaningful to my fans, but honestly was incredibly helpful to me as well," he said in a written statement. "I was also thrilled that it was a way to keep some of the musicians and engineers I have been working with on payroll. I am ready to go out into the world and do live shows again but I think the streaming world is here to stay and that is a beautiful thing."
Moment House's CEO said he's heard similar things from artists who've performed on his platform. Livestreaming is no longer a stand-in for an in-person experience, but a new format with its own artistic potential.
"I think artists are really starting to see that it's a creative format, and not just a tech activity," said Mehta. He pointed to an Instagram post from Charlotte Cardin, who after selling 15,000 tickets to her livestreamed concert on Moment House in late April wrote: "Working on this livestream has been one of the most artistically stimulating experiences I've ever had."
Earlier this year, Warner Music Group signed partnerships with L.A.-based startups Wave and Genies, a sign that the record label wants to bring its vaunted roster of artists into the metaverse and give them more tools to explore livestreaming as a creative outlet.
But all of those ambitions depend on fans continuing to embrace the new medium, even as their options open back up. So as they return to watch more in-person concerts, the music industry will likely be watching right back.
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"Our digital lives are not going away at all," said Ohanian during an online chat earlier this week with Liebeskind. "This is going to be the gateway for so many people to have so many great experiences, and we're all grateful here at Seven Seven Six to be leading this round of funding."
Topia allows users to explore virtual worlds customized by artists and designers. As users navigate a given world and come into proximity of other users, each of their video feeds come into view, enabling them to strike up a spontaneous conversation.
The world in which those conversations take place are built by Topia's open-source community of creators, who have already designed such novel spaces as an interactive theatrical experience and an NFT museum. Asana, a project-management software firm, used Topia for a digital party to celebrate its IPO last fall.
Just months after its May 2020 launch, Topia hosted 25,000 people for Virtual Burning Man. It will host a virtual version of this year's festival as well, for which it may experiment with two-way interactivity between the in-person and livestreamed events.
Topia founder Daniel Liebeskind
"This has been a lifelong journey of trying to build my own community and trying to build software that helps people have more authentic human connection," said Liebeskind. A multiple-time "Burner" himself, he said he built Topia to emulate certain elements of Burning Man from the beginning, including the serendipity that accompanies wandering through the Nevada desert and happening upon a new community of people who share common interests.
With the investment, Liebeskind plans to expand his eight-person team and stand up a marketplace within Topia that helps creators make money. The new creator payment ecosystem launches Wednesday. Liebeskind said his top performance metric will be the amount of money his startup pays out to creators on the platform.
As for where that cash comes from, and how the company itself makes money, Liebeskind said Topia is pursuing multiple revenue streams. The platform is mostly free to use, but certain features require payment, including customized URLs and incorporating single sign-on functionality into an event. The company is also building out an SDK and allows for ticket sales and subscriptions, which it will split with creators who design the worlds where those gatherings take place.
Creators can build their own Topia worlds and sell them as templates for others to use or build upon, similar to how Wordpress provides a marketplace for website templates and plugins. The designers can get paid for selling those templates and will also receive a percentage of the micro-transactions that take place within those worlds.
"The last bastion of things that I personally believe will ever be automated away are the things that are so uniquely human and empathetic and creative," said Ohanian, "so it's vital that we create new ways to properly reward that creativity and that empathy with money."
The marketplace launches with a collection of scenes designed by artists, including former Riot Games and Magic Leap Art Director Daren Bader, Void Bastards Creator Ben Lee and Ubisoft Senior Environment Designer Karen Stanley.
Topia has hosted about 1,000 events each month since its launch, for groups ranging from families to schools to big corporations.
Liebeskind has been building software since he was a kid and returned to tech full-time after a brief post-college foray into investment banking. He began creating the Topia business plan in late 2018, and constructed an early VR prototype in 2019.
"When the pandemic hit, I thought, 'Now is the moment for this thing that I was planning on building over the next 10 years'," he said.
Ohanian said that one of Reddit's most well known features, the "Ask Me Anything" Q&A format, was created by users, and told Liebeskind that he is excited by the user-generated trajectory of Topia.
"You'll be sitting here 10 years from now, being surprised by something where you're just like, 'Oh, I never would have imagined that,'" Ohanian said.
"The best of the internet is when you bring people together around a shared interest, and they make connections they never would have made otherwise," he added, reflecting on what has helped make Reddit into one of the internet's most popular destinations. "Leading this investment in Topia is a chance to look back now at community building [on the internet] from first principles."
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What began as a social app for collectors to swap stories and photos has ballooned into a digital stage for live auctions and unboxing videos. Since January, the Los Angeles tech startup has hired some 40 employees and leased a 10,000 square-foot office space in the Marina Arts District.
And on Tuesday — just a few months since its last big boost — the startup closed a $50 million Series B round.
Whatnot recently closed a $50 million Series B round.
"It's probably one of the fastest growing marketplaces we've ever seen," said Y Combinator's Anu Hariharan, who led the round.
It's been over a year since consumers moved online in droves and investors are still sinking millions into retail technology —livestream shopping especially.
L.A.-based Popshop Live was valued at $100 million last fall after an investor bidding war to lead its Series A. Talkshoplive, which hosts celebrities livestreaming about their memoirs and latest albums, scored seed capital in February from a venture firm backed by eBay's founder.
One Pokemon collector dropped $17,500 on a 1st Edition Shining Charizard card during a broadcasted event streamed live on Whatnot.
What gives? Hariharan said U.S. ecommerce has only embraced video in the last three to five years, and now it's everywhere. Even retailers like Home Depot introduced livestream demos and workshops during the pandemic.
Grant Lafontaine, the CEO and co-founder of Whatnot, brought the technology to a niche, well-connected community of online shoppers. He founded the company in 2019 with Logan Head, a former product manager at the online sneaker marketplace GOAT.
Their users are 18 to 32-year-old collectors who spend hours browsing eBay listings but crave something more interactive.
"They're on eBay because they're buying the collectibles, they're on Instagram to show them off," Lafontaine said. "They come to Whatnot because they can do both."
The company got its start as a social platform and marketplace — sans video livestreaming. That function came later, after a steady pool of users made checking Whatnot a daily habit.
"I was the first person to go live," Lafontaine said. "I sold out $5,000 worth of collectibles in two-and-a-half hours. The experience kind of spoke for itself. Anyone who saw it wanted to use it."
Other investors include Andreessen Horowitz, Animal Capital, musicians Ryan Tedder and DJ Skee with Min 10 and NFL players DeAndre Hopkins, Bobby Wagner and Jeremy Padawer. The company has raised $75 million to date.
Whatnot now boasts 15 categories of collectibles, from FunkoPops to sports cards (the most popular category on the app) to a few newer experimental verticals like vintage clothing. Within the next year, Lafontaine said he hopes to hit 30.
"For a young startup, it's always important to start with one or two categories, not with everything," said Hariharan. "What Whatnot has done really well in collectives will help them scale pretty much any product."
The app, she said, is on its way to becoming "eBay 2.0."
A previous version of this story stated Whatnot closed a $40 million Series B Round. The correct amount is $50 million.