Reed Smith Guide to the Metaverse

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The metaverse will provide new opportunities for content creation, consumption, and exploitation. However, the successful monetization of such content presents new challenges for stakeholders. In short, rights holders who are creating and licensing content will want robust protection to ensure that they are fairly remunerated for each new use case. In contrast, licensees who are using and exploiting content will want licenses sufficiently broad to adapt to the evolving use cases. End users’ interests will be primarily focused on the user experience, but their interests may also overlap with rights holders and licensees, subject to whether they are participating in content creation or consumption of content. Regardless, it is almost certain that the metaverse will drastically change the way we think about content licensing.

Key challenges

While the terms of any license will vary depending on the content and use case, among other factors, there are several terms that are commonly found in content licenses that will need to be carefully considered when licensing content for use in the metaverse, as further set out below.

Key challenges of content licensing in the metaverse 

The above is by no means an exhaustive list of the challenges the metaverse will bring to content licensing, but it represents some of the key commercial and legal issues that will need to be considered by licensees and licensors alike. Flowing from these overarching considerations are other challenges that will also need to be assessed, such as usage tracking, file format standardization, delivery and ingestion of content, scope of warranties and indemnities, and conduct of claims for infringing use, among others.

Key takeaways
  • Monetization of metaverse-generated content presents new challenges for stakeholders
  • Several terms commonly found in content licenses need to be carefully considered when licensing content for use in the metaverse
  • New entrants will need to prepare bespoke agreements for how content is licensed
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