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Spotify and Roblox Created an Inventive Metaverse Partnership

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The plan is to work together on a long-term basis.

Over the past year, there have been several interesting collaborations in the metaverse. In this video clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on May 3, contributors Jose Najarro, Travis Hoium, and Demitri Kalogeropoulos discuss a recent one between Spotify (SPOT -0.62%) and Roblox (RBLX 1.30%) that could be quite beneficial for both companies.

Jose Najarro: Yes, a new company is entering the metaverse per se, and that is going to be Spotify. Earlier today, they announced that they are partnering up with Roblox to create this experience on their platform. I do want to say that we've seen a lot of companies do Roblox experience before.

But I want to say this is probably my favorite out of all of them. I feel like every other Roblox experience has just been a one-time event. Chipotle (CMG -2.63%) did their Roblox experience where you can go make some burritos and then if you work hard enough, I think on their experience, you can go and get a discount on a real-life burrito.

But Spotify is doing something different, they're making it a little bit more reoccurring. And I think this is great news. Spotify, obviously, they have a lot of artists behind them. They're trying to make this experience where every week or maybe every month, they work with an artist. The artist is either able to interact in Roblox with their fans, they're able to either create digital merchandise, where if they create digital merchandise and they're sold online, Roblox, Spotify, and the artists will all get some form of split revenue here. 

Again, I think this is really impressive because this is going to be more of a reoccurring experience where it's not just one item. This upcoming week, I think they're doing a K-park within their Roblox experience, where it's going to be focused on a lot of K-pop bands, and two popular K-pop bands are going to be selling merchandise on their Roblox experience, and they're also going to be able to, who knows, they might do a live concert.

I want to say, as probably the months progress, we might start seeing other names enter as well. They create other experiences, maybe a rock band experience, maybe a hip-hop experience. I think this is probably one of my first times that I've seen a big company enter Roblox or any of these platforms and made it more of a long-term strategy. While most of them probably seem like a short-term strategy where they're just using it for small advertisements, it seems like Spotify wants to do this for long-term repetitive, which I think is great news for Spotify and Roblox.

Travis Hoium: I like that they are building on somebody else's platform, and not trying to build their own too. [laughs] I feel like that's a mistake that a lot of companies make is just saying the metaverse, we're going to go build their own. I thought that was encouraging.

Najarro: I think this bodes well for Roblox because we've seen Fortnite, I believe they do a lot of concerts and stuff like that. With Roblox, I think we've seen a bit. But now with them partnering up a little bit with Spotify like we know they have a huge list of artists, the amount of digital concerts we might see this year might increase compared to what we saw last year.

Demitri Kalogeropoulos: For sure. Then again, Roblox is also reporting earnings in a couple of days. I believe it's about a week from now too. That's a real interesting one. That stock has been down, brutally hit in the past year or so, I think it's down 60-ish percent on fears of a growth slowdown.

But impressive business though their last report showed a lot of great engagement, a lot of hours of entertainment, a lot of people are really into that stuff, and I think concerts and things like that, they've proven that people enjoy interacting digitally in their platform, so there's a lot of exciting places they can go with that and Spotify, I'm sure.

Demitri Kalogeropoulos has positions in Chipotle Mexican Grill. Jose Najarro has positions in Roblox Corporation and Spotify Technology. Travis Hoium has positions in Chipotle Mexican Grill and Spotify Technology. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Roblox Corporation, and Spotify Technology. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Spotify Stock Quote
$86.30 (-0.62%) $0.54
Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
$1,502.76 (-2.63%) $-40.59
Roblox Corporation Stock Quote
Roblox Corporation
$35.84 (1.30%) $0.46

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