AmazeVR Raises $15 Million to Bring Music Fans Virtual Reality Concerts With Artists Like Megan Thee Stallion
AmazeVR, a West Hollywood-based virtual reality startup that allows users to experience musical artists’ VR concerts, has secured $15 million in new funding.
The funding round was co-led by Partners Investment and Murex Partners and was oversubscribed within three weeks, according to TechCrunch. The deal takes AmazeVR to nearly $31 million in capital raised since its launch in 2015, with the startup now plotting a Series B raise in early 2022 to fuel further growth, it told the publication. Founded by former executives of South Korean messaging app Kakao, the company has more than 40 employees across its offices in West Hollywood and Seoul.
AmazeVR’s platform provides music lovers with a more immersive way to experience concerts from home. Fans can join concerts as avatars, come face-to-face with artists, and hang out with other users, co-CEO Ernest Lee told TechCrunch. AmazeVR is rolling out its first commercial VR concert this spring by bringing Grammy-winning rapper Megan Thee Stallion’s show to select AMC Entertainment theaters across the U.S.
“Our goal is for the technology to be so good that it becomes invisible so that the fan’s memory is not that of a great VR experience, but it’s that they actually came face-to-face with their favorite artists in fantastical immersive environments, blurring the lines of reality,” Lee said.
AmazeVR isn’t the only L.A.-based VR firm to raise money recently. Concert livestreaming platforms Wave, Moment House, LiveXLive and LoopedLive, among others, have received investments over the past couple years as live concerts faded and artists went searching for another way to reach their audiences.
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Streaming subscribers and revenues hit new heights this past year. Label valuations climbed. Song catalogs from artists including Bruce Springsteen and Neil Young were purchased for record sums. Yet in the midst of this booming music economy, many artists felt that they were not receiving their fair share of the rewards.
In 2022, that will change. As pressure mounts from fans and rival services that offer a different model for payment, streaming music stalwarts will begin to change how the billions in streaming revenues get divvied up to benefit emerging musicians and bands with the most dedicated fans.
If you thought that the $10 you pay each month for Spotify or Apple Music flows to the artists you listened to most, you’d be wrong. The money each user pays for streaming goes into one big pot. A major portion of those dollars go to rightsholders to cover the use of the recording music and compositions thus establishing the revenue pool for the month.
That pool is then divided up on a “pro-rata” basis using the collective listening history of all users. If half of all plays this month were Adele songs, then Sony Music would receive 50% of the record label share of the pool and would pay her based on their mutual contract terms. The “bottom line” (pun intended) is that the amount of money paid for each play is a result of an algorithm. It varies from month-to-month based on usage patterns. An emerging band unknown to virtually all the hundreds of millions of streaming subscribers might have 100 devoted fans who listen to their songs and only their songs repeatedly. Under the current system, that band would receive almost none of the thousands of dollars their fans pay annually because their listening is outweighed by the billions of plays from all the other users. If every subscriber found this month’s Netflix movies boring and decided to listen to more music instead, that emerging band’s per-play rate would decline.
Suppose instead that every listener’s dollars were divided up according to their listening alone and tallied across all subscribers. The result of this “fan-centric” accounting: That emerging band would receive the lion’s share of the money paid by their most loyal fans.
Soundcloud already allocates payments this way for independent musicians and is negotiating with the major labels to treat the artists they represent similarly. Tidal and the French service Deezer plan to do the same. Major stars like Paul McCartney, Chris Martin and Stevie Nicks expressed their support for a move within the UK to offer more “equitable remuneration” from streaming for all artists.
None of the larger services have indicated they plan to shift from “pro-rata” accounting…yet. Pressure from artists, governments and, most importantly, music fans should begin to change that.
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As the pandemic shut down, cancelled and delayed events people had been looking forward to, Wave co-founder and CEO Adam Arrigo saw an opportunity.
His company was founded in 2016 at a time when brands like Oculus and PlayStation were looking to bring virtual reality into the mainstream. Not knowing how ready people would be, Arrigo and his team were conservative with the company's money.
"We basically didn't spend any money because we weren't sure how quickly people were going to strap these things to their heads… And we were kind of right because VR sort of petered out," said Arrigo.
Instead, the company worked on something that he characterizes as a "metaphor for a live performance." Arrigo, a game designer and a musician, realized the music industry needed a tech boost to help keep artists connected with their fans during the pandemic.
Wave provided artists the ability to perform as virtual avatars in 3D spaces and allow fans at home to strap on their headsets and be immersed in a concert.
The company hit a breakthrough when it hosted a show with violinist Lindsey Stirling, which garnered an audience of 2,000 using VR and 398,000 using either game controllers or watching on YouTube.
"Now that this thing is sort of starting to catch on, the truth is that we're not [...] trying to replicate or replace live events," said Arrigo. Instead, he said the experience is meant to be more additive to a live tour.
Wave raised a lot of funding over the pandemic, getting opportunities to work with artists like The Weeknd and Doja Cat.
The startup experimented with allowing fans to send musicians virtual gifts. It proved popular among fans.
"People just loved being able to interject something into a show that they couldn't do at a real concert," said Arrigo.
With popular video games such as Fortnite hosting concerts and the concept of the metaverse gaining traction, Arrigo thinks that live performances will become more like hybrid experiences.
"Concerts will probably become something where, if you're lucky enough to go to the physical version, that's going to be more of a VIP experience. But I think one of the main modalities of experiencing live music, it's going to become virtual," said Arrigo.
He added, "It's just because like the generation that's growing up in Roblox and Minecraft, you know, this is the way they're experiencing music."
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