Should Luxury Brands Tune Into Virtual Concerts?

Key Takeaways: Livestream concerts started as a way to combat COVID-19 restrictions, but one year on they have evolved into extravagant shows with multi-million dollar budgets, attracting millions of viewers worldwide. Global shopping platform Lyst has seen direct increases in specific items worn by musical artists such as Billie Eilish and Dua Lipa following their viral digital performances. Brand sponsorships, fashionable gaming skins and virtual merchandise are all routes for brands to tap into this thriving entertainment trend. It’s impossible for a physical concert venue to host 45 million people at once, but that was the audience for Travis Scott’s groundbreaking performance on the video game Fortnite last year, even if it lasted just 10 minutes. As the coronavirus pandemic forced event cancellations worldwide, Scott’s virtual gig as an avatar in April 2020 was refreshingly innovative among the overflow of Instagram “lives” during the early days of the outbreak. One year later, online performances are still the only widely available option for many artists, giving rise to a variety of virtual concert formats, from elaborate livestreamed events such as Dua Lipa’s Studio 2054 in November 2020, which required five months of planning and a budget of $1.5 million, to The Weeknd’s interactive XR concert on TikTok in August 2020, which saw him performing as an avatar and drew two million viewers. Livestreamed shows have evolved to incorporate mesmerizingly artistic content with the potential for immense reach, making the concert industry more inclusive and accessible following years of ever-rising ticket prices for real-world shows. According to research service MIDiA, ticket revenues from livestreamed concerts reached $600 million in 2020, and the company's latest report found that overall revenues during the pandemic (including tickets, virtual goods, tips and badges from in-game gigs) surpassed $774 million. And as with in-person events, online shows offer lucrative opportunities for brand marketing. For example, Dua Lipa and her dancers were clad in Puma sportswear as part of the brand’s sponsorship of Studio 2054, triggering a 38 percent jump in page views for women’s Puma sneakers on global shopping platform Lyst within the 48 hours following the broadcast. According to Lyst, Billie Eilish’s immersive XR-enhanced Where Do We Go? livestream in October 2020 drove a spike in searches for Gucci goods, in particular the brand’s logoed products (+90 percent) and oversized t-shirts (+77 percent). “With most of the past year spent indoors, virtual concerts have become a powerful source of inspiration for shoppers,” Lyst Data Editor Morgane Le Caer told Jing Daily. “As more and more artists partner up with fashion designers, virtual concerts have become a powerful bridge between brands and consumers.” Even video game avatar performances have the power to influence spending – there’s a reason Travis Scott’s Fortnite character was wearing sneakers from Nike, a brand partner of both the rapper and Fortnite developer Riot Games. And on Grand Theft Auto, German DJ-trio Keinemusik’s gig gave a global boost to MISBHV, the Polish streetwear label sported by the group’s avatars, which saw its searches up 233 percent in January 2021, weeks after the announcement. According to the latest media trends survey from Deloitte, American Gen Z respondents most often selected playing video games as their favorite form of entertainment (26 percent), followed by listening to music (14 percent), and the combination of the two holds a powerful appeal for younger consumers. Even though they’re proving extremely popular in the West, in-game concerts have yet to catch on in China, where performers are sticking with the dominant livestreaming technology that offers multiple payment systems, tipping and two-way interaction. However, a recent deal between Tencent Music Entertainment (TME) and the Los Angeles-based Wave (the company behind The Weeknd’s TikTok show) could soon change the equation as it aims to bring more immersive experiences to TME-owned platforms in China. Another vote of confidence in favor of virtual concerts came via Warner Music Group’s investment in youth-oriented gaming platform Roblox, where chart-topping musician Lil Nas X performed to 33 million viewers as a giant avatar at the end of 2020. Roblox VP and global head of music Jon Vlassopulos said that the concert generated seven-figure sales of virtual merch, and a recent Royal Blood performance also saw strong merch sales. According to online marketplace DMarket, virtual skins earn the gaming industry approximately $40 billion a year. “Our users love customizing their avatars so it is important for them to invest in the right merch that matches their personality and brand affinities, like music,” said Vlassopulos. “We have a quickly growing virtual fashion economy on the platform, with both fashion designers from the Roblox community creating and growing their own brands on the platform and major fashion brands launching on the platform.” Perhaps the next wave of online concert-goers will be sporting Gucci’s $12 virtual sneakers, which are available exclusively on Roblox and social platform VRChat, or the Italian luxury house could even develop its own music event on the platform, following up on the GucciFest film festival it hosted on its own website last year. Vlassopulos isn’t revealing much yet; “Artists and brands are already collaborating in the real world, which the metaverse closely reflects,” he said. “As the metaverse is quickly materializing on Roblox, we don’t see any limitation to how creatively artists and brands will approach establishing and expanding their presence on the platform.” Virtual concerts may have gained mainstream traction as a pandemic trend, yet the past year represents just the start of a new way of consuming content that can drive commerce. Even as restrictions start to lift and physical events come back in the coming months, brands can’t afford to ignore opportunities in online concerts across various platforms, with the chance to gain exposure to the millions of fans who will continue to engage with them.

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Should Luxury Brands Tune Into Virtual Concerts?