The Next Verse: Challenges for Mechanical Licensing in the Metaverse

Imraan Farukhi

Syracuse University

Abstract

The COVID-19 pandemic catalyzed a paradigm shift in the music industry, compelling live music promoters and consumers to explore novel avenues for artist engagement. The emergence of remote-accessible online interactions laid the groundwork for a symbiotic evolution of consumer technology and the music industry. Livestream concerts, hosted in the burgeoning realm of the metaverse, offered a unique and shared music experience, transcending physical boundaries. Simultaneously, the surge in demand for exclusive content fueled the popularity of non-fungible tokens (NFTs) in 2021. As shared virtual environments become intertwined with music delivery, questions arise regarding the applicability of existing U.S. copyright law to music content in the metaverse, particularly mechanical licensing pursuant to Section 115. This paper scrutinizes the current mechanical licensing framework’s adequacy in addressing the reproduction and delivery of music in the metaverse. The paper delves into the debate over the interactive nature of metaverse concerts, questioning their classification as “interactive.” It explores the lack of legal precedent regarding mechanical reproductions in NFT minting and distribution, raising uncertainties about Section 115’s applicability. The discussion underscores the need for potential revisions to Section 115 or the creation of a new exclusive right specific to the metaverse. The paper concludes with reflections on the challenges posed by compulsory mechanical licenses for NFT records and the evolving market standards required for NFT transactions within the metaverse. In the era of Web3.0, where metaverse experiences redefine the music industry landscape, this paper advocates for a nuanced approach to copyright law that aligns with the dynamic and decentralized nature of the emerging digital frontier.

Keywords: metaverse, livestream concerts, non-fungible token, NFT, music copyright, Section 115, mechanical licensing

Farukhi, Imraan. “The Next Verse: Challenges for Mechanical Licensing in the Metaverse." Journal of the Music and Entertainment Industry Educators Association 23, no. 1 (2023): 157-180. https://doi.org/10.25101/23.5.

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