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How the Rise of Metaverse will Impact the Entertainment Industry?

It’s been almost a year since Fortnite’s exclusive Star Wars: The Rise of Skywalker event, where fans previewed the film, performed with lightsabers, and danced with avatar director JJ Abrams, all inside the game. very popular online. Reviews of the event were mixed, with some applauding it as a bold step into the future of interactive entertainment while others found it disappointing and blatantly promotional. Regardless, no one could deny that Fortnite and Disney were on to something in their innovative collaboration.

Of course, Fortnite isn’t the only digital venue owner open for business. Other popular massively multiplayer online games, or MMO games for short, such as Roblox and Minecraft, have also explored the potential to evolve beyond its gameplay and become a digital third place for people to socialize online. and participate in live virtual events together. And those games are huge platforms already: Fortnite reported over 350 million registered players in May, Minecraft topped 131 million in October, and Roblox has 150 million in July. In particular, more than half of American children and teens under 16 are now playing Roblox, and viral star Lil Nas X’s recent live shows on Roblox garnered 33 million views in two days.

Together, these virtual events herald the emergence of a metaverse – a continuous and persistent virtual space in which users are free to explore, create and interact with the environment and with each other. A digital third place on steroids, if you will. Although the MMO games cited above are still only “protoversies” and we still have years before one of them becomes a true metaverse, it is interesting to think about the future and to begin to consider the broad and changing implications of such a new platform. This is particularly relevant for entertainment brands, given the platform’s enormous potential for immersive storytelling and interactive world-building.

Growth accelerated by COVID

2020 has been a tough year for most entertainment brands. The film and television industry is forecasting an estimated loss of $160 billion over the next five years, according to market research firm Ampere Analysis. Many sporting events and concerts have been postponed or cancelled altogether. Disney said the pandemic cost its parks, experiences and products segment about $2.4 billion in lost operating income in the fourth quarter. Even with promising vaccines on the horizon, the recovery could still be uneven and winding, especially for the theatrical sector where audience behavior may have changed for good.

One bright spot may be the growth in the use of streaming services, as the lack of live sports earlier this year caused some households to turn to streaming services. But according to expert estimates, the dominant over-the-top (OTT) model, the media service offered directly to viewers via the Internet, may be a less cost-effective way to monetize content than the conventional pay-TV model. It will therefore be necessary to find new sources of revenue to close the profitability gap as the industry undergoes a business model overhaul. This is where the developing metaverse comes in.

As the recipient of stay-at-home orders, the game has experienced a major pandemic in terms of both time spent and revenue as many have turned to virtual worlds of video games for a getaway in these trying times. According to a recent report by the NPD Group, American gamers spend an average of 14 hours per week playing video games this year, up from 12 hours per week in 2018. Among them, the “big players” spend more than 15 hours per week. to play and are up 29% of US gamers, an increase of 6% from 2018. The global gaming market will generate revenues of $ 159.3 billion in 2020, according to Newzoo’s estimate, marking healthy year-over-year growth of 9.3%. Naturally, the increased consumer attention to games has helped familiarize a large audience segment with the aforementioned virtual events taking place in protoverse environments. People have had virtual birthday parties, weddings, and parades in games like Roblox and Animal Crossing: New Horizon.

In addition, the rise of non-gaming virtual events has also helped standardize the transfer of conventional offline entertainment experiences to online channels. Dua Lipa’s live virtual concert, “Studio 2054,” for example, garnered over 5 million views on its first night, breaking the world record for live streaming, grossing at least $ 60 million in sales from tickets. Besides music related content, live experiences also extend to many other vectors such as cooking, fitness, education and even travel, forming the basis of the ” zoom economy “.

While the rise of gaming and virtual experiences are theoretically competing with entertainment brands for the same limited pool of public attention, it would be shortsighted to see them as new competitors. Instead, players in the entertainment industry need to recognize that these new virtual experiences play a crucial role in changing consumer expectations and behaviors, preparing the general public for more immersive experiences in future metavers. Rather than treating it as an existential threat, entertainment should actively embrace this shift in focus and work to co-opt it as a channel for customer acquisition and engagement.

Entertainment in metaverses

Entertainment is a sprawling industry that spans a wide range of industries. Overall, the industry offering could be divided into two broad categories: content and experiences. The content side of business, regardless of format, has shifted to digital channels for the past two decades, as experiences are just beginning to shift from offline and out-of-home channels to virtual spaces.

The added value the metaverse can create for entertainment brands basically boils down to three main functions: immersive storytelling, world building, and fan creativity. Each of these three features complements the franchise building process and improves audience engagement, two top priorities for any modern entertainment brand.

Immersive storytelling

Storytelling forms the basis of content activity, regardless of its format or distribution channel. Metaverse builds storytelling ability with deep immersion and interactivity, playfulness of storytelling to help suspend disbelief and build affinity. Instead of passively consuming content, viewers need to become viewers or even active participants in the narrative, leading to an increased sense of agency and emotional investment. The line between entertainment content and experience would be rather blurry in the Metaverse.

Interactive content is nothing new at this point. From Netflix’s intriguing attempts to create Choose Your Own Adventure episodes, to HBO’s more elaborate attempt at non-linear content with Mosaic, content creators have experimented with new formats to boost viewer engagement. However, 2D interactive content does not have the kind of immersion that a 3D interactive experience can offer. Today, video games often produce some of the most compelling fictional narratives the entertainment industry has to offer, and the rise of the metaverse will make it more evident, forcing content creators to battle the power of the game. immersive storytelling.

The VR content has been applauded by many for the total immersion it allows, and there is a distant version of the metaverse that will be accessible via VR. However, the reach of VR content will remain limited until the adoption of VR hardware resumes. So the discussion around the metaverse tends to focus on game environments for the time being.

For experience-based entertainment, the metaverse provides an immersive channel to extend audience reach beyond the capacity of place and geographic barriers. It can be co-opted as an extension of offline events and experiences to attract customers who otherwise might not have been able to attend in person or positioned as a cheaper alternative to sell potential customers in-person experiences. The biggest obstacle to success here remains the quality of the virtual events. Simply broadcasting the event offline on a 2D screen in a virtual environment will not be enough; the digital experience should be a faithful replica of the offline experience, granting virtual participants degrees of interactivity.

Metaverses will also allow experience-driven entertainment brands to test virtual places that transcend the boundaries of physical places and unlock new types of experiences. Anyone can have a front row seat in the Metaverse, but the real fun will come from things that would be possible in virtual environments but difficult to implement in the offline world. For example, attending Coachella in the metaverses would provide unobstructed views and skip-the-line access to merchandise without losing the rush to other attendees. Instead of the kind of flattened 2D experience offered by live streams, attendees get an immersive simulation of the real-world event. Interestingly, Fortnite is already hoping that its Island Party Royalewould become a regular stop on the tour for artists, complemented by a plug-and-play production studio to bring artists to its virtual stages in a standardized yet customizable way.

If theme parks are the 20th century’s solution for immersive storytelling, then the metaverse will be the 21st century’s answer. Given how long we’ve been banned from attending major offline events this year and the cultural shift towards in-person events this pandemic has sparked, more and more entertainment brands will look to development. of the metaverse to find new ways to engage with their audience.

Construction of the world

Good stories often create an interesting fictional world that people want to spend time in. Fantastic or historic, these unique environments are often replicated through theme parks to allow visitors to step into the story they love. The all-new Star Wars: Galaxy’s Edge at Disneyland is often cited as the current pinnacle of immersive storytelling in out-of-home entertainment. Visitors can climb aboard the Millennium Falcon, attend a custom lightsaber-making workshop, and participate in an epic battle between the First Order and the Resistance. However, it is also a costly billion dollar exercise.in building the world – the park has themed shopping, dining and entertainment offerings, and Disney is also opening a themed hotel designed like the Galactic Starcruiser to make accommodation part of the GN’s immersive experience , extend the immersion beyond the park itself. But not all entertainment brands could afford to recreate a fictional world like this. Metaverse could offer an interesting opportunity to do this at a much lower cost with more flexibility.

The global-building potential of metavers also lends itself well to experiential marketing. For example, Netflix and the Brooklyn Museum recently hosted a virtual-only immersive experience that allowed users to virtually walk through the museum and watch costumes from Netflix hits The Crown and The Queen’s Gambit. In a post-COVID world, such experiences will not need to be purely virtual, but they could move from a virtual exhibit to a more interactive experience that allows digital avatars of visitors to try on their favorite costumes from the shows. and the document. experience to be shared through social channels – something that an offline experience would not be able to achieve.

Ultimately, the metaverse’s greatest potential in world-building lies in its potential to merge different fictional worlds and absorb characters and intellectual property across all sectors of pop culture. If you think the Avenger movies are exciting crossover events, wait until you see Iron Man standing next to Superman holding a Pikachu in the Great Hall of Hogwarts. Fortnite is already leaning in this direction, most recently with the addition of Kratos from Gods of War, a video game franchise. Of course, copyright issues will inevitably increase, but once a common metaverse is established, no entertainment brand will be able to afford to make their IPs absent from these platforms, as the absence in future metaverse will destroy value and lead to oblivion.

Unlock fan creativity

Last but not least, the rise of the metaverse will allow fans to create their own narratives from existing intellectual property, taking things like fan fiction and fan modifications to a logical step in their evolution. The open world of the metaverse naturally encourages users to create new characters and stories, but it also invites users to engage with an existing IP through interactions or even role-playing, whether allowed or not.

Collaborating with fans can be a tricky task, given the need to moderate user-generated content, and most entertainment brands today naturally want to protect their franchises and brands. However, the nature of content creation has changed. With the rise of democratized digital creativity, the most popular content could come from anywhere – professional content studios and TikTok stars are on a level playing field to fight for attention. of the public, both at the mercy of algorithmic feeds and recommendations. Recently, TikTok users came together to create a participatory musicalbased on Pixar’s Ratatouille. Similar initiatives will inevitably appear in the metaverse, whether or not IP owners like it.

Therefore, it can become a foolish race to try to root out unauthorized fan creations in future metavers. Failure to tap this growing source of creativity can be a great missed opportunity. Brands may choose to refrain from monetizing user-generated content for brand safety reasons, but it might be a better approach to involve fandoms and grant access to IP assets, and to leverage said access to moderated user-generated content and experiences in the metaverse.

These principles of collaboration apply to other areas of the entertainment industry as well. Allowing sports fans to broadcast their own live commentary on a game to their subscribers or create their own video clips from multiple perspectives would boost engagement and build fan communities. For fans of virtual concerts, being able to submit their own merchandise creations or choreographic routine and receive a share of the resulting sales would be a game-changer in the way musical events interact with fans.

What entertainment brands can do today?

While there’s still some way to go before today’s “protoversy” turns into a full-fledged metaverse, that doesn’t mean entertainment brands can just drop it and come back later. The metaverse is a rapidly growing territory of innovation that smart brands should try to enter at ground level before it overflows with entertainment and event IPs. To prepare for this fast-approaching future, here are three things entertainment brands should consider today.

Experiment with virtual events

Today, most branded virtual events tend to happen on live streaming platforms. While tools like Instagram Live provide a great starting point for entertainment brands to try their hand at producing live events, they will also need to improve at creating virtual experiences in MMO games. One of the keys to success is to incorporate content with in-game experiences, with an emphasis on interactivity and immersion of experiences, rather than the IP content itself. Incorporating fan creations where appropriate can also help enrich the virtual experience.

Incorporate real-time data

Another key part of the virtual events puzzle is real-time data. For example, the NFL is working with Amazon on an analytics tool called Next Gen Stats, which provides teams with detailed player data to analyze player trends and performance. It is also used to enhance the fan experience in the stadium, online and during match broadcasts. In a way, the Madden NFL 21 game developed by EA Sports represents an early implementation of next generation stats in today’s game. Going forward, if the NFL were to create a metaverse match based on data from Next Gen Stats, it could map virtual players to their actual counterparts based on historical performance data and create a realistic match. It could even be used to virtually bring retired star players back in the future, opening up new possibilities for virtual sports matches.

Try out existing toolchains

To harness the metaverse’s global-building potential, entertainment brands will need to rethink their production process from scratch. 3D assets will be needed for MMOs, AR activations, and digital products, so it’s time to get them in order with each new production.

Most importantly, entertainment brands should consider a native digital approach to designing their sets, props, and costumes by embracing the existing toolchain for creating complex virtual experiences. For example, Disney is already using Epic Games’ Unreal Engine to power production of its hit show The Mandalorian, rendering sets of alien landscapes in real time and allowing cameras to shoot from all angles. Because the show is already produced on Unreal Engine – the same game engine that powers Fortnite and many other popular online games – it would be easy to replicate the world of The Mandalorian. in Fortnite, should Disney choose to do so.

Invest in the game as a strategic channel

Gaming is part of the entertainment industry by definition, and it is emerging as a key future growth engine for the entertainment ecosystem. Yet more often than not, this is still a blind spot for many entertainment brands. Even Disney couldn’t quite figure out how to incorporate video games into its vast IP flywheel and admitted that “licensing is the best model for Disney” in games. In contrast, Netflix announced that he would team up with game publisher Ubisoft to develop content based on the Assassin’s Creed franchise. As gaming continues to develop its cultural influence and generate bankable franchises, entertainment brands will need to reconsider their strategy and start investing in gaming as a distribution channel and strategic engagement. Testing and learning in today’s play space will be important in determining how to fit into the metaverse of the future.

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