Musicians Test Charging Facebook Credits for Pay-Per-View Concert Streams

Musicians have begun allowing fans to exchange Facebook Credits for access to pay-per-view streams of concerts, and the standard price seems to be 50 Credits per show, the equivalent of $5. American jam band Widespread Panic has launched a Facebook app in partnership with ecommerce platform Milyoni’s Social Theater to process Credits payments, while English singer/songwriter David Gray is working with European telecom O2 to accept Facebook Credits, PayPal, and credit card payments.

Initially designed for payment of virtual goods in social games, Facebook Credits have recently been used as a payment system for some digital media including film rentals. Now the music business is experimenting to see whether Facebook’s virtual currency, built-in audience, and communication features can help it grow pay-per-view concerts as a revenue stream.

Despite the lack of a native Facebook music playing app, musicians and Facebook have started to depend on each in several ways over the past few years. With the decline of Myspace, hundreds of thousands of musicians now stream their music from third-party applications such as RootMusic’s BandPage and ReverbNation’s BandProfile, which they host as tab apps on their Facebook Pages. The Pages act as a portal to purchasing concert tickets, merchandise, and MP3s, as well as a place to launch new singles.

Facebook benefits from musicians as well, as nearly half of the most popular Facebook Pages are music related. Fans spend time on the site to consume music news, stream music, discuss their favorite artists, and post photos and check-ins from concerts they attend. Facebook recently revived its official “Music on Facebook” Page, which it uses to share useful tips for musicians, venues, industry professionals, and listeners.

Links about concerts posted on Facebook drive up to $5.30 in ticket sales each, and social shares have been shown to generate significant amounts of MP3 sales. However most of these sales occur off-site, such as on iTunes, where Facebook doesn’t get a cut, and the connection between social media efforts and profits is less clear. The new experiments with charging users Facebook Credits to watch concerts through Facebook apps could change this, earning money for the social network through its 30% tax on Credits and demonstrating Facebook’s importance to the industry.

Pages of both Widespread Panic and David Gray feature tab applications through which users can pay 50 Facebook Credits for access to live and rebroadcasted streams of a concert. The artists promote the applications in posts to their Facebook fans and to their websites.

The purchasing experience for David Gray’s concert is simple, and once Credits are transferred, the app reloads to display the streaming player. The option to pay with credit card or PayPal and watch on David Gray’s website expands the accessibility of the pay-per-view experience, but also permits fans to watch in an environment with less viral potential. While the Widespread Panic shows to be streamed don’t occur until next week, the purchase process is somewhat clumsy, as it’s difficult to tell if one has successfully paid, which could lead users to accidentally make redundant purchases.

Those who pay can watch David Gray’s concert which is occurring right now in Dublin, or view rebroadcasts later this evening and tomorrow. The audio quality is pretty good, as is the video minus the occasional short lag or choppiness.

His streaming app wisely allows users to post comments to a discussion feed while watching, with the comments defaulting to being posted to a commenter’s friends via the news feed. This drives more traffic back to the app, stimulating sales. The app also displays a Like Box social plugin encouraging users to Like the O2 Blue Room music division’s Page. These social features resolve our primary complaint with the Warner Bros film studios’ experiment with streaming films such as The Dark Knight for Facebook Credits — namely that it wasn’t inherently social, with no way to discuss the film with other viewers nor invite friends without interrupting the viewing experience.

Musicians that are already filming their concerts, and especially those offering pay-per-view off of Facebook, should consider syndicating their shows through a Facebook app in exchange for Credits. The site’s viral channels can draw in new customers, its Pages offer strong fan retention and communication opportunities, and Facebook Credits makes it easy to accept payments. Success of these early experiments could help Facebook Credits pay-per-view concerts emerge as way for musicians as well as their record labels and management to generate a direct return on investment on building and engaging a Facebook fan base.