TheWaveVR: Reimagining Live Music

TheWaveVR is revolutionizing how people experience music. It is “a [two-sided] platform for people who love music, enabling them to view, host, and socialize in shows world wide, anytime, anywhere.” On TheWaveVR, musicians use VR technology to create and show next level, immersive visuals of unrivaled intensity to supplement their music.

Started in February 2016, TheWaveVR has raised $6.5 million from top firms in two rounds (oversubscribed Seed funding). Investors include KPCB Edge, Greycroft, The Virtual Reality Fund, Upfront Ventures, etc., as well as angels (Mike Fischer, Joe Kraus, etc.) [1].

TheWaveVR tested its concept by hosting a “silent rave” at LA’s Exchange venue, where attendees and DJs wore headsets and headphones. Watch the video to get a sense of the experience:

https://www.youtube.com/watch?v=hc-9eqz_HHc

VR Magazine writer Paul Trowe claims that “[he’s] never experienced anything like this in the 30+ years I’ve been playing and making games.” [2]

Role of Visuals in Live Music:

Visuals play a key role in live music events: Electric Daisy Carnival spent $3M in 2016 just on its main stage display [3] (there were 10 stages total) and Ultra Miami allocates similar budgets for visual production. Some music festival attendees enjoy the visuals even more than the music, so there is huge potential for TheWaveVR to gain adoption and capture share of wallet with its solution that pushes boundaries of visuals.

 

TheWaveVR Value Creation:

Music creators have full control over the experience they create. “[They can] fully customize how their audience experiences the music – whether that’s by transforming the venue from a realistic nightclub to outer space or putting on the most unimaginable light show ever.” [4]

The platform is fully open, allowing any music artist to create “Wave Shows” and any user to attend such performances. Musicians must use HTC Vive and its controllers to DJ, but users can use any HMD including the $15 Google Cardboard [5], which allows easy trialbility of Wave Shows and widest access.

As the platform is still nascent, live “Wave Shows” only occur once a week. Attendees can interact with performers and other fans, dance, paint, and experience these shows in many other ways than feasible in real life. For example, fans can communicate with the onstage artist via gestures and motions, and musicians can react accordingly. Social is a core value proposition of the platform, counter to many other VR use cases.

Value creation for musicians – performers can reach a broader audience and “scale” themselves via TheWaveVR’s virtual venue. Artists can import tracks, create visuals, and share futuristic shows both live and as re-runs. Whereas musicians on tour can only feasibly perform at 3-4 shows a week, they can host multiple digital shows during a single night on TheWaveVR. Wave Shows also offer opportunities for more intimate interactions with fans (1:1 conversations, etc. not possible / safe in real life), increasing loyalty and engagement of fans.

Value creation for users – the platform drastically lowers barriers to attend concerts. Those who want the social experience of live music but can’t for any reason (don’t have time, don’t have money to travel and pay high entry fees, etc.) can now get a similar experience, virtually.

TheWaveVR Value Capture:

The company stated that one of its goals is to help create new revenue streams for music industry. However, since the venture is still in beta and focusing on growing users on both sides, it hasn’t started monetizing. The predicted market size for VR Live Events is $4.1Bn in 2025. Even if we assume live concerts is only 10%, it’s still a lucrative $400M market [6].

Below are a few ideas on future value capture.

Recommendations to Grow the Business:

User growth:
Direct network effects exist in such product because of its social elements, so it is important to quickly attract users. But how to attract users on both sides? Pure platforms always face the chicken and egg problem. We learned in class that the side with more potential to capture value is easier to attract first – musicians in this case. To attract musicians:

1. TheWaveVR should make DJ tools as simple to use and as similar to existing mixing / production software as possible to ease adoption curve for DJs.
2. Further, it should pitch its platform as a unique way for DJs to differentiate themselves, generating buzz and boosting their brands. Nowadays, DJs are expected to not only innovate on their music, but also live visual accompaniment. Those who do so successfully have better fan engagement, and can go viral via social media as fans share and engage in conversations about such novel “lightshows.” For example, Deadmau5 created the first 3D LED visual display dubbed Cube 1.0, and when he revealed a revamped version Cube 2.0 (costing $2M) [7], chatter about the creative visual experience exploded on Facebook. Above & Beyond is another group whose popularity soared after it started using visuals to bond with their fans, by typing inspirational, real-time messages [8].
   The company should partner with top ranked DJs (Martin Garrix, Tiesto) [9] and technologically-forward DJs (Deadmau5, Skrillex). Initially, TheWaveVR may have to pay the DJs to use the platform since there are few users and hence not much value for top artists. If TheWaveVR is able to secure a few big-name DJ partnerships, fans will quickly flock to platform as DJs advertise their Wave Shows on social media and other marketing outlets. To fight multi-homing, TheWaveVR can offer an exclusive repository of top DJs’ Wave shows only available for re-run on its own platform.

Monetization:

1. An obvious monetiziation opportunity is partnering with live event companies (Coachella, Ultra, Insomniac – company behind Electric Daisy Carnival) to provide complementary virtual livestream experiences, and charge attendees. Festival tickets cost $100+ per day, so Wave could experiment with multiple price points below $100.
   A potential risk is cannibalizing existing festival ticket sales. However, these festivals are often sold out, so demand exceeds supply. TheWaveVR could simply capture value from excess demand. Further, these events have been livestreamed in 2D for years with minimal revenue impact. Why not monetize those who don’t attend because of cost or ticket supply issues via a VR interactive experience?
2. Once the platform hits critical mass, Wave Shows can stop paying DJs to use the platform, and instead start charging both sides. Charging DJs a flat fee or revenue share (more likely given trend towards outcomes-based pricing trend) is justified as Wave Shows increase DJs’ global reach, letting them gain additional fans and incremental revenue. Charging fans to attend Wave Shows is a no-brainer especially since fans are already used to paying $50+ for live DJ sets.
   TheWaveVR can even segment pricing, charging higher fees for meet-and-greet / more interactions with the DJ, etc.
3. TheWaveVR can also re-run shows and charge lower entrance fees for access.

In Professor Zhu’s “Making Virtual Reality Real” note, an industry observer notes that the product that “takes advantage of everything you can do in VR, the social presence, the ability to talk to people, […] that will be a killer app.” TheWaveVR checks all 3 boxes and could very well be that killer app accelerating consumer VR adoption.

 

[1, 4] https://techcrunch.com/2016/08/05/thewavevr-raises-2-5m-from-kpcb-and-others-to-bring-the-concert-experience-into-vr/

[2] https://vrtodaymagazine.com/thewavevr/

[3] https://www.forbes.com/sites/ryanmac/2016/07/06/electric-daisy-carnivals-main-stage-rotella-edc-insomniac/#52d6b78352d6
“Biggest of the festival’s eight stages, the 440 feet wide, 700-ton design carried a $3 million price tag that was highlighted by a 90 foot, LED encrusted tree. The stage also featured custom fountains, 33 flame torches, and 1,400 lighting fixtures.”

[5] https://thump.vice.com/en_us/article/wave-virtual-reality-future

[6] http://www.statista.com/chart/4602/virtual-and-augmented-reality-software-revenue/

[7]

https://www.youtube.com/watch?v=W3zHBzv-rKs

[8] 

[9] https://djmag.com/top100djs