Money makes the virtual world go round too

Using music to make people aware of amenities is a shrewd marketing strategy.  But any situation where more money goes out than comes in, can’t continue indefinitely.  The future of virtually live music performances depends greatly on how this situation is addressed. By Teddi Shamrock

Profit is not a bad thing.  In fact it’s pretty important—whether you are managing a physical music venue, or a virtual one.

I was pleased to get to spend some time recently with Kalli Birman, who is the community manager for Solace Beach, a residential and commercial land estate made up of more than 60 sims in Second Life.  I was excited to learn Solace Beach had recently increased their live music format to include events five times a week.  That’s quite a commitment to virtual music, so I wanted to learn more about Solace Beach, and about the challenges and opportunities of hosting virtual music performances from the venue perspective.

Solace Beach is a virtual real estate development that has been operating for a year and a half.  In addition to live music, they also host DJ events at the Pele Lounge, and movies at Black Pearl Beach.  Entertainment options are offered as part of their quest to create community.  “We want people to feel like they aren’t just buying a parcel of land, but belong to something bigger,” she said.  “Also, bringing in musicians that have their own following, increases awareness of Solace.”

Using music to drive traffic to make people aware of the amenities at Solace Beach is a shrewd marketing strategy.  While Solace Beach is not in the music business per se—they hope to create a thriving residential and business community across the sims that make up the virtual estate, and entertainment—including virtually live music—is a way to bring in prospective residents.

As a physical venue owner, I try to do the same:  offer music to draw new guests to my pub.  I’m not in the music business either, but music is a fun way to help meet my objectives—which is to sell my guests food and drinks during their visit.  I don’t charge a cover because I am able to recoup the costs for musicians from the revenue I bring in during the performance.

The profit question for a virtual venue is much more complex.  Unlike their physical cousins, they can’t make up the cost spent on live music with added food or drink sales.  Using live music to help create awareness is smart.  The staff at Solace Beach is especially savvy, in that they also try to measure and track whether using music this way is working to grow the community.  “It is challenging,” Kalli said, “basically, it comes down to traffic and land sales, as well as resident retention.”

Scheduling and promotion is far more complex for a virtual venue compared to a physical venue too.  Solace schedules events at different times to try and respond to a global audience.  Creating awareness with such a diverse audience even with time zone sensitive scheduling is tough.  “SL promotions are limited.  We have to rely on group notices, word of mouth, blogs and the like; whereas, with a physical venue, there are other promotional options as well.”

As far as finding musicians to perform at Solace Beach, Kalli has a well developed network of performers and peer venue operators.  “I feel like we have had, and will have, some of the very best in Second Life play here,” she said.  “I have gone out to other venues scouting to find people, but I also rely on referrals from musicians I know that are good, and from other venue managers too.”  She looks for talent, as well as people who are easy to work with.  “If someone is particularly difficult,” she shared, “it makes it not fun for everyone.”

Another difference between a physical and virtual venue is how music licensing is handled.  At my pub, the licensing agencies assess a fee to the house for copyrighted music to compensate the artist/owner for cover music played at my venue.  Kalli shared Solace Beach expects the person doing the streaming to be responsible—be it a musician or DJ.  “I think it should be up to the musician to cover anything like that.”  Kalli noted, “As they are the ones performing covers.”

Solace Beach takes music seriously and does pay their musicians.  But that brings me back to the profit question.  It is tougher with a virtual venue, absent something akin to a cover charge, or food and beverage revenues to offset the cost of top notch talent.  This is an area Kalli expects to see considerable development over the next several years.  She would like to see the virtual venue operators collaborate on solutions.  “I think that we can work through this challenge if everyone works together.”  Kalli sees music as a loss leader—sold below cost in an effort to stimulate real estate sales.

The cost of virtually live performers is not offset by tip jar donations.  She fears that venues will be lost on this question, “because they cannot afford to keep the very good musicians.”  As this situation develops more fully, it is likely to result in cost sensitivity by venues that will challenge all virtually live musicians.  While a cover charge is one way to address this growing financial imbalance, if all the operators don’t do it, Kalli sees a risk for the few who try.

Any situation where more money goes out than comes in, can’t continue indefinitely.  The future of virtually live music performances depends greatly on how this situation is addressed.

Venue operators, like Solace Beach, are working to crack the code on what will work for the venues, audiences and artists alike.  Having recently subscribed to public radio, I recognize I am willing to pay for content that satisfies me, and I am eager to see how venues and artists work through this challenge.  Perhaps venues will start to sell tickets for virtually live music performances?  Or maybe music listening subscriptions akin to NPR.

In the meantime, as virtually live, or VL, music fans, we have tremendous opportunity to participate in virtual events.  By actively following our favorite digital musicians, and sharing with friends about terrific artists and great venues, like Solace Beach, fans can actually help offset the profit challenge because that simple conversation helps promote events.  The resulting increased awareness benefits music fans and artists, but also the venues that are making the investment to host these events, which further helps develop the VL music scene.

The performers I saw at Solace Beach were outstanding—I’ll be following up with them as part of my ongoing artist features in a future column.