Steadman Makes Virtual Product Placement Sing

Last night, the band Steadman performed what may be the first live concert held in a virtual world. The event was held in 3-D virtual playground, an online destination where users can control digital avatars to move around and interact via chat. Increasingly, those digital avatars are moving around in a virtual world inhabited by brands, with Steadman just the latest example.

The English pop band is touring the U.S. to support its new album, Revive. On Sunday, November 16, it made a stop in Menlo Park to play a live concert in There’s offices. Engineering staffers created avatars that followed band members’ actions as the music streamed into a virtual concert hall. The live stream was also available at several other virtual cafes and bars in the world.

“I was hooked on There from the moment I joined in January,” said Simon Steadman, lead singer and founder of Steadman. “I love hanging out in There, and it was a great escape when I needed a break while on tour. Plus it was obvious to me that it would be a cool venue for us to reach fans that might not be able to make it to our shows.”

“The band has completely embraced the world of digital music,” said Annie Lai, director of new media for Elektra Records, the band’s label. Steadman also has recorded special sessions for exclusive sale on the Napster and Rhapsody digital music services. Aside from exposure to members inside the world, Lai said that the technology twist of a live concert in a virtual world is “definitely the type of thing that helps the visibility of an artist, especially one as savvy as Steadman.”

When There launched its limited access subscription-based digital destination in October, users raved about jetting around on hoverbots, decking their avatars in wild outfits and hanging out with each other. But the eponymous Menlo Park, Calif. company that created and hosts the virtual world makes it clear that the technology can do lots more. The company describes itself as an entertainment and communications platform, and went live with corporate sponsorship from Nike and Levi Strauss & Co. The clothing retailers created virtual merchandise that users can buy with Therebucks, the world’s currency. There plans to announce additional partnerships and distribution deals in the coming months.

Director of marketing Andy Donkin said has three revenue streams: sign-up fees of $19.95 plus a monthly subscription fee of $4.9, the purchase of Therebucks to use within the world, and sponsorships and promotions from brand advertisers. “The way you can create product placement in the world is so compelling that it makes for a good ad medium,” Donkin said. “Our product is about creating your identity, and in the real world you buy brands and wear clothes that say something about you.”

Advertisers can feel comfortable displaying their brands in the world because the technology allows no sex and no violence. Products placements are designed to attract members to integrate them into their activities. For example, when a user buys a pair of Nike shoes for his avatar, the avatar can run faster. “When a product placement adds value to the game, [members] like it,” Donkin said. “If we were putting things in There that added no value, they’d be pissed with us.”

Elektra’s Lai said that she would definitely consider doing more promotions inside, for example, hiring artists to create digital band t-shirts for sale there or producing in-world only recordings.

While users may be highly enthusiastic, it’s not a mass-market play. Users must have a fast graphics card in their computers and pass an automated computer check before they can join. As Lai said, “Right now, it’s a waiting game for people to catch up.”

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