Soundtrack of the metaverse: hip-hop, games, ads, & air-dropping backstage passes to crypto wallets

metaverse audio ads

In this special episode of TechFirst, I’m sharing the on-stage Web Summit chat I had with Ghazi Shami, the Founder & CEO of EMPIRE, an innovative hip hop music label, and Wilfrid Obeng, the Co-founder & CTO of Audiomob.

We chat metaverse, gaming, NFTs that don’t suck, and what the tie-in is between a hip hop label and an audio ads company.

Both also chat about their metaverse plans … enjoy!

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Soundtrack of the metaverse: chatting with EMPIRE and AudioMob


Transcript: Web Summit chat with Ghazi Shami and Wilfrid Obeng


(This transcript has been lightly edited for length and clarity.)

John Koetsier: Hello and welcome to TechFirst. I’m not in my usual spot — I’m in a hotel in Austin, Texas. And I’m sharing something that’s also not too usual for TechFirst, for my TechFirst podcast. I was in Lisbon last week [November 1-4] at Web Summit and I did a couple interviews on stage that I want to share with you. 

This first one that I’m sharing is with a company called AudioMob and they do some interesting things in games, and I interviewed the CEO, Wilfrid Obeng, on stage with the CEO and founder of EMPIRE, which is a hip hop music label. What’s the connection? What’s interesting there? What’s the tie-in to metaverse, and Web3, and NFTs as well? All that stuff you’re gonna find out. Listen up.

John Koetsier: I can’t believe it, people actually came. You came like three kilometers all the way from the Altice Arena. Thank you. This is awesome. We’re gonna have some fun. We have some great people to chat with you. Why don’t we start with you, Ghazi? 30-second intro … you, your company. 

Ghazi Shami: My name is Ghazi. I’m from San Francisco. Company’s name is EMPIRE. We’re a full service music company, record label distributor and publisher, and very much entering the Web3 space as well.

John Koetsier: So low key for such a cool space, hip hop and Web3 and all that stuff. Wilfrid, 30 seconds… you, your company. 

Wilfrid Obeng: Yeah, so I’m Wilfrid. I’m co-founder of AudioMob.

We bring audio ads into mobile games. So, if anyone’s ever got annoyed by those video ads that block you, we basically replace those with audio ads that allow you to continue to play your game or interact with your app. 

John Koetsier: Now kick us off, Wilfrid. I mean, anybody who’s over 40 and has listened to radio knows that, hey, audio ads have been around for a while, maybe a hundred years or so. What’s cool, what’s new, what’s different right now about what you’re doing? 

Wilfrid Obeng: Yeah, like you said, John, audio advertising has been around since 1893. So they used to have like newspapers in Budapest where you could basically ring in and get interactive content. I think now the difference is two things. A lot of what you guys are very used to on radio is now moving digital. So I think that’s the first thing.

So, and now we’re actually able to track actually the effects of audio ads.

A lot of times before when you were on radio it was a lot of guesswork of who’s in the car, where they’re traveling to. Now we’re able to track like listen-through rates, so how much people are listening to, if they’re engaging with the actual ad content and clicking through onto it. 

And I think the second thing that’s really driving this whole audio change where you’re seeing all of these apps like Clubhouse and etc., is people are realizing audio doesn’t need as much intrusive data. So, a lot of what we do is privacy-first. A lot of audio companies are kind of used to not knowing every little detail about every one of you using stuff like device ID, so they’re able to use stuff like contextual targeting in place of that. So, I think those two things are the big driver as to why we’re seeing this new ecosystem. 

John Koetsier: Ghazi, what’s the connection with you? It’s kind of interesting, you run a hip hop label, you do some cool stuff — we’re gonna get into some of your business model stuff in a bit. What’s the connection between you and audio ads? 

Ghazi Shami: Well, there’s always been a big synergy between music and gaming.

And if I can run ads in-app or in the game, it’s a tremendous marketing tool for us. I was just meeting with someone else now where we were talking about doing audio ads in podcasts. And so there’s just a tremendous amount of leanback penetration that you can do with an audio ad.

John Koetsier: You have a different business model than a lot of music labels. Talk about that briefly? 

Ghazi Shami: Well, traditional record labels are primarily royalty-based deals and deals by which artists give up a significant amount of their ownership to the label. In our model, most of our deals are joint ventures. So they’re JVs where we have an equal rev share with the artists. And a lot of our deals are licensed-based, not ownership-based.

John Koetsier: Interesting. How’s that relevant to you, Wilfrid? 

Wilfrid Obeng: So, I think on our side, I always say internally, game development is art, but the monetization of it is science. Like, we all want to enjoy the art, all of this free-to-play content, but we also, these game developers and app developers in general need a way to monetize it. And I think for us, the important thing is not doing that in an annoying way.

So it’s a bit like an idea I can give is like if you’re at the Louvre and then every two seconds you’re trying to look at a painting someone’s sticking an ad in front of you, it’s quite annoying. But if you had something that was in the background where you can consume it, that’s a bit different.

So, I think for us it’s being able to advertise, we’ll never say like, “Oh, advertising is the best thing since sliced bread,” but we know it’s necessary for people to be able to generate money and for us to enjoy these free-to-play experiences.

John Koetsier: Ghazi, let’s talk a little bit about gaming and artists. You taught me something in our prep call, and you taught me something about artists and how they use gaming, and how they love gaming, and how that actually helps them connect with fans. 

Ghazi Shami: There’s always been a big synergy between gaming and artists. Most artists are big gamers, or a significant amount of artists are big gamers.

We have a Latin superstar named Jay Wheeler on our roster who is an avid gamer, and we just did a pretty big gaming tournament with him and 18 other big Latin gamers on Fortnite, and that was a few months ago.

So, there’s always been kind of like this synergy, especially within the sports games like John Madden Football, NBA 2K, and then things like Grand Theft Auto. There’s always been a big synergy between the music business and the gaming world, and we sync a lot of our records into a lot of those games.

John Koetsier: Well, that’s gotta be super cool, right? I mean, maybe if I like a game but I like an artist, there’s like two ways for me to kind of connect right there and just watch and see what they’re doing. Maybe laugh a little bit if they suck a little bit, but maybe they humanize themselves as well by just having…

Ghazi Shami: Well, we also see an uptick if a record is really prominent in a game, you see an uptick on the streaming side. So there’s definitely a synergy between the two. 

John Koetsier: Interesting. What’s the synergy with you? I mean, can you even play their music while they’re playing the game? 

Wilfrid Obeng: Yeah, so, for us, like we work with a number of brands who’ve worked with like McDonald’s, P&G, but then for someone that’s really interested and ever since the inception of our company has always been music. Because for the consumer, it’s one of the most, I guess, enjoyable experiences and the most enjoyable ads. And we see that in the results that you can at least see when it’s a music artist and people can hear their favorite artist.

So when people hear a Justin Bieber, when people hear a Nas, there’s way bigger engagement rate when they hear their voices. So, we see that in terms of that music and gaming connection in the actual results and in comparison to other ad campaigns we run. 

John Koetsier: I want to hit a bit of metaverse, Wilfred, because there’s something interesting in what you’re doing. Obviously you’re in gaming, you’re in mobile gaming, you’re in other spaces as well, but metaverse unlocks further opportunities, correct? 

Wilfrid Obeng: Yeah, so I think we’ve seen this, right? We’ve seen it with like Travis Scott and Fortnite. We’ve seen it with Zara Larsson and Roblox. Like, as Ghazi was saying, there is a clear synergy between when you marry music and gaming. But for us, it’s like, how can we do that in more interesting ways?

So when you’re in these 3D environments, how can we provide an experience where the user actually enjoys what they’re hearing, they’re able to discover an artist, and they’re not actually feeling like, “Oh, I’m just being advertised to, this is annoying.”

That’s something we call at AudioMob internally the “negative prior effect,” which basically means like, “I don’t really care about this ad if it’s basically interrupting me and annoying me. So whatever you are trying to sell to me is irrelevant now.” So, that’s why we’re trying to make it a bit more seamless, not interrupting, less annoying, something more relevant, and usually that starts with…and it’s more popular with artists, and hearing their favorite artists speak. 

John Koetsier: It’s like we have two Wilfrids here and Ghazi was looking up, where is … [laughing] there’s an echo … but we’re rolling with the punches. We’re rolling with the punches. We talked already about musicians and games, but musicians have always driven, artists have always driven new technology, right, Ghazi? 

Ghazi Shami: Sure. Yeah. I mean, creatives are always on the forefront of format change. 

John Koetsier: Mm-hmm. 

Ghazi Shami: And I’m assuming you’re alluding to Web3? 

John Koetsier: Yes. 

Ghazi Shami: And so, you know, we have a very popular metaverse artist named Teflon Sega, who’s been at the forefront of what’s going on in Web3 for almost four years now. 

John Koetsier: Wow. 

Ghazi Shami: He came to us about four years ago and said, “I don’t wanna be… the typical artist anymore.” And I said, “I don’t understand what you mean.”

He said, “I wanna become an avatar.” And, you know, the marketing team looked at him like he was crazy. But within just months, it was pretty evident to us that this man had a very solid understanding of where the world was headed. And now, three years later, he’s performing in the metaverse. He’s selling NFTs in the metaverse. He’s had over a hundred million streams on his music.

He’s done quite well for himself. 

John Koetsier: Are you kidding me? Four years ago he said…

Ghazi Shami: Yes.

John Koetsier: … to you, “I want to be an avatar. I want to be in the metaver– I’m not sure I was thinking about metaverse four years ago. That’s impressive.

Ghazi Shami: It was impressive, more impressive to see him roll it out and execute it. 

John Koetsier: You know what’s really interesting about that, Ghazi, when you are an avatar — whether it’s a totally artificial one, we’ve seen that in Japan, we’ve seen that in other places as well, or whether you create an avatar of yourself — you can have personalized experiences, to some degree, with fans on an individual basis, perhaps with some AI.

Is that where maybe he’s heading next? 

Ghazi Shami: So, he’s already in that space. He’s purchased the suits that they use for the gaming world and he uses it to project his avatar. And he shoots a lot of music videos in New York in a place called Zero Space where he can create alternate worlds and insert himself into those worlds.

And we did a Spotify meeting with the marketing team in Spotify, and he actually showed up on the Zoom call as the avatar. [John laughing]. And it was really interesting to see him because he never broke character. You know, they said, “So how long have you been doing this?” and he said, “I don’t understand. I’ve always been…” 

John Koetsier: [Laughing] I was born four years ago.

Ghazi Shami: Yeah. So it was really interesting to see it and to see the interaction and to see people buy into the authenticity of the way he presented it. 

John Koetsier: Wilfrid, when you’re hearing this stuff and you’re hearing, you know, “My avatar can be a star that just connects with you personally, and you personally,” what opportunities come to your mind for your technology?

Wilfrid Obeng: I think one thing we’ve… and there’s a reason why we’ve always been called AudioMob and not Audio & Gaming, and the reason for that is we’ve always, like, before when the initial idea of the company was streaming music into these games.

So, for us, like these kind of artists that are coming up now make a lot of sense around these two worlds, and I think in the future, and we’re already in talks with a number of different streaming platforms around how they can basically use us as an extension arm for music discovery.

And I think that’s where it gets really interesting, where an artist that might be unknown can potentially blow up and be known across all of these different games. And that actually becomes a really cool thing where they then, to go on Ghazi what they’re doing at EMPIRE, you retain your ownership, but then it’s also a more cost-effective way of you being discovered without needing so much support behind you.

John Koetsier: There’s a lot of dots connecting here because Ghazi started off saying, “Hey, we’re working with artists, they retain ownership.” You’re saying, “Hey, if they’re connecting to their audience, we can be a part of that.”

It’s really interesting because if you think about it, a lot of ways that people connect with their audience right now — influencer wise, whether artists or not — is subscription-based, right? And that works for a certain number, but obviously there’s people who can’t do that, and you’re not gonna do that for 50 artists that you follow or whatever the number might be.

You could have personalized audio ads read in the voice of the avatar, personalized for the person who has signed up for that. There’s a whole new world of opportunity there. 

Wilfrid, talk a little bit about results. If you’re doing ads, people want results. People want to know what the … I don’t even know, click-through rate, tap-through rate, listen-through rate is? 

Wilfrid Obeng: Yeah. 

John Koetsier: What are the results that you’re seeing?

Wilfrid Obeng: Yeah, so with audio advertising, there’s like two forms of spend.

There’s usually like the branding advertising, which I’m sure everyone’s aware of, and what you’re looking for there is usually listen-through rates. So, that basically just means how far into the ad did someone listen into, basically. So, how engaged is that user in that ad?

And what we usually see in a lot of our rewarded audio games is it’s usually like 92%. So, users are literally following, listening to this ad. And you might ask like, “Do they really actually ingest or digest this ad?” And so we’ve done a lot of research — we actually have a white paper around this. And there’s some, a few interesting things about this.

So, one, there’s a reason why I can remember half the lyrics to Drake “God’s Plan.” There’s also a reason why we can all remember the Netflix “da-dun” and we also immediately go, “Okay, someone in the house is watching Netflix.” And it’s the sonic branding piece. And in our white paper, there’s a lot of information around this, around how people actually connect with these audio cues and these audio signals.

So, I think there is a lot of synergies there in terms of how you measure it. So, there’s first edition free rates. And then the second point I was going to make is that there’s also the performance piece. So, we actually, and when we’re working with EMPIRE, was actually driving streams to the actual, what we call in music the DSP, so like Apple to Spotify.

And we did a campaign with Vito, an artist on EMPIRE, and what we found was there’s around 10 times the click-through rate than when you’re using just traditional banner images. And that’s because people can hear the artists, they get a clip of the song, and then they can then go, “Oh, that’s actually quite a cool song. Let me actually click through to it.”

And 61% of people who are playing mobile games are also listening to audio. So, that whole synergy marries through when they just flip open that app and they stream in Spotify, and then they just go back to their game and they’re consuming that ad or that content.

John Koetsier: It’s kind of good timing for you because with Apple’s App Tracking Transparency, and the third-party cookies going away, the Google Ad identifiers going away, people … marketers, advertisers are turning to media mix modeling or other probabilistic ways of determining effectiveness, which, guess what?

Kind of works pretty well for what you’re doing.

There’s also, I hear, sometimes interesting things like shake your phone to click or to go to a website or something like that. So there’s cool things.

Ghazi, let’s come back to you. I want to hit the Web3 stuff again. We talked about the avatar and that was super, super cool. But you’ve also talked about doing something sort of NBA Top Shots type of thing with artists. Talk about that a little bit. 

Ghazi Shami: Yeah, that’s more on the NFT side. We’ve built an NFT minting platform internally. And we’ve talked about maybe minting artist moments where we take, if an artist gets a gold plaque or a platinum plaque, then we can mint it and distribute it to their fans and maybe distribute it to key tastemakers.

And then maybe a certain amount that you mint may have a physical component, right, where we say, “Okay, we minted 500 NFTs for a gold record, we minted a thousand for a platinum record, but maybe we’ll mint five real plaques, physical ones, and send them out to the fans, and maybe put some type of certificate of authenticity built into the plaque itself.”

And so you can marry a physical product to a digital product, but there’s a lot of stuff that we’ve been doing in the NFT space with artists. I’ve been kind of dabbling… trial and error. 

John Koetsier: That’s the way to do it. 

Ghazi Shami: Yeah. 

John Koetsier: It’s so much more interesting to me than NFTs that just are randomly created, and randomly flipped, and randomly traded — an NFT that you care about, that is of somebody that you care about, is maybe of a moment that you remember from a concert or something like that.

That’s incredible because that’s the original collectible, right? That’s the trading card. That’s the souvenir that you bought. That’s interesting to me. Very cool. Wilfrid, what comes up when you think about that? 

Wilfrid Obeng: Yeah, so some of the things we … so we actually got our experimental lab in Abu Dhabi under twofour54, which is a gaming media entertainment hub. And what we’re doing there is a lot of the things people are talking about and what Ghazi is also talking about is around what we wanna look at. And as you said, in gaming, I think that’s one area where NFTs actually make a lot of sense.

So, it’s like what we wanna do is stuff to play-to-earn. So rather than you listen to audio you get a reward, maybe you get an NFT in the game, so you actually get a collectible. And then there’s actually a moment that actually people can use and then you can actually trade that, or you can then grow that particular character within a game. 

So it actually has some actual value, rather than, as you said, the people just buying a lot of things and then flipping them on exchanges. So those are the kind of cool things where we look at play-to-earn with crypto. And then also looking at some of the marketing companies being able to pay us in crypto as well, which is also another interesting thing we want to explore as well.

John Koetsier: And just imagine one of those NFTs that you actually earn is actually a ticket to a concert, or a special backstage pass or something like that. I mean, I don’t know if you can beat Ticketmaster at its own game or something like that, but there’s interesting things to think about there. 

Ghazi Shami: We’ve actually done backstage passes with NFTs. 

John Koetsier: Nice. 

Ghazi Shami: Yeah, so we actually minted an NFT for an artist that was linked to a physical piece of merchandise that we shipped, and the physical piece of merchandise had the QR code stitched into the hoodie. So every hoodie was one-of-one. But then what we did was when the artist went out on tour, since we had everybody’s Ethereum addresses, we just airdropped a flyer that said … 

John Koetsier: Get outta here.

Ghazi Shami: “If this is your market, and you happen to be in market, bring this flyer to the show and you’ll get a free meet and greet.”

John Koetsier: So you’re actually doing Web3 marketing, as well as delivering product there. 

Ghazi Shami: Right, because when you have all those addresses, these people have basically, you know that they’re a superfan and they’ve bought into the artist, and you can continue to send them things. We’ve also done an airdrop recently where we sent a free song that was never out anywhere else in the world, just only in their wallets.

John Koetsier: Amazing. Because an NFT can be anything. It can be a little game, it can be an audio file, it could be a lot of different things. So cool. Our time is out here. 30 seconds… future of audio ads and gaming, Wilfrid? 

Wilfrid Obeng: Oh, I think the future’s gonna be game takeovers where you’ll have an artist being able to take over a whole mobile game or a whole actual console game.

John Koetsier: Wow. Very cool. Thank you so much for making the trek out to this stage and thank you guys for a wonderful…

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