More Wave and Warner Form Strategic Partnership for Celebrity Virtual Concerts
Wave, a virtual entertainment firm, has partnered with Warner Music Group (WMG) on content and investment, according to Rolling Stone. The deal gives WMG a minority stake in Wave and access to more virtual concert experiences for its customers, as well as artists and resources from one of the world's three largest music companies.
Wave founder and CEO Adam Arrigo tells Rolling Stone, "We're excited to partner with Warner as the industry evolves to ensure we're optimizing value for artists and rights holders." “Warner has been incredibly astute about how they've embraced startup innovation and made a range of investments in the space, including ours. The music industry has always had a tumultuous relationship with disruption and technology. When I see Warner making early investments in technology companies or signing deals as important as the one we just signed, I think it's historic.”
The alliance between Wave and WMG is the result of a long-standing relationship between the two firms. When Wave was just a virtual reality (VR) business in 2016, Arrigo gave demonstrations to WMG's corporate team, giving WMG CEO Steve Cooper his first VR experience, according to Arrigo. Since then, the companies have communicated regularly and formed a new strategic alliance to produce large-scale shows rather than one-off events.
WMG and Wave declined to provide financial details on the investment, other than to say that it is a "major" minority offer. In addition to the monetary exchange, Warner will send talent from its flagship labels to Wave for more virtual concerts, including Atlantic, Warner Records, Elektra, and Parlophone.
The companies haven't revealed who will perform at Wave events, but they say it will be a combination of up-and-coming and well-known artists. Lizzo, Ed Sheeran, Bruno Mars, Roddy Ricch, and Panic! At The Disco are among the artists signed to WMG's labels. Wave and WMG are still figuring out the show's financials, such as whether it will be free or ticketed, and what kinds of in-concert sponsorships and microtransactions will be eligible.
Although virtual-concert platforms like Wave saw a surge of interest from the music industry during the year of quarantine, Arrigo believes that immersive streaming platforms like Wave would survive the pandemic because artists will continue to seek new ways to connect with fans and promote their music.
WMG's chief digital officer and executive vice president of business growth, Oana Ruxandra, agrees, telling Rolling Stone that the company's label heads and marketing executives, as well as Warner's publishing team, are working together to schedule shows. In the short term, Ruxandra says, “it'll be really digging in to learn what works and what doesn't for our artists, Wave, and the audience.” “As time goes on, in nine months to a year, I want to be in a position where we can consistently produce virtual shows, concerts, and events at scale.”
In recent years, the wave has accelerated, especially in the pandemic. Wave raised $30 million in funding last year, with participation from celebrities such as the Weeknd, Justin Bieber, and J Balvin, as well as music labels such as Top Dawg Entertainment. In a separate round, Chinese music giant Tencent Music Entertainment invested in the business.
WMG, for one, has made a number of significant investments in digital experiences in recent months. Along with Wave, the music company invested in a $520 million round in Roblox, which has expanded its focus on music by hosting virtual concerts like the one for Lil Nas X last year. Spirit Bomb, an experimental label that creates virtual music artists, was also a WMG investment. WMG revealed a collaboration with Genies, a technology firm, last Friday to convert its artists into digital Avatars that can be sold as non-fungible tokens.
As technology continues to transform music consuming practices, Ruxandra says Warner will continue to invest in and experiment with the companies pioneering new digital experiences.
“For a long time, the music industry has been based on songs and singles, and this was due to the technology available at the time. We still believe that songs and albums are extremely relevant, but technology and how people think about and interact with music are evolving,” Ruxandra says. “We want to make sure we're making the best music product and content for the right site, because music is everywhere.”
Ruxandra says Warner will continue to invest in and experiment with companies that are exploring new digital experiences as technology continues to change music consumption habits.
“Songs and singles have dominated the music industry for a long time, owing to the technology available at the time. “We still believe that songs and albums are incredibly relevant,” Ruxandra says, “but technology and how people think about and engage with music are evolving.” “Because music is everywhere, we want to make sure we're making the best music product and content for the right site.”