The Metaverse is where it's at. According to a recent New Yorker article, even Mark Zuckerberg plans to transition Facebook from a social media company to a "Metaverse company" in the coming years.

WTF is the Metaverse, you ask? The term was coined by science fiction writer Neal Stephenson in his 1992 novel, Snow Crash. Today, Wikipedia defines it as the "concept of a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe." According to Alexander Lee in Digiday, the Metaverse is primed to radically change consumer behavior. He writes:

"[The Metaverse] will allow users to generate their own content and distribute it freely throughout a widely accessible digital world. Unlike the modern internet, Metaverse users will experience changes in real-time by all users. If a user makes any kind of change to the Metaverse, that change will be permanent and immediately visible to everyone else. The persistence and interoperability of the Metaverse will afford users increased continuity of identity and experience compared to the modern internet. In the Metaverse, users won't need to have separate Twitter profiles, 'Fortnite' characters and Reddit accounts — they'll simply be themselves across all channels. This continuity of identity will be a core factor behind how users purchase and consume content in the Metaverse."

WHAT DOES DISCORD HAVE TO DO WITH IT?

Cue Discord, the social media platform founded in 2015, but increasingly popularized in recent months as normies (many of whom have become more digitally engaged during the pandemic) have started to participate in the Metaverse with frequency, including through virtual gaming, non-fungible tokens (NFTs) and other previously niche experiences.

Discord allows users to create invite-only topic-based spaces, called servers, which are made up of text channels and voice channels, and have cool features, like the ability to create custom emoji. Discord's text channels function much like on Slack, where users can organize conversations into separate topical discussion threads and even send and receive files. Its voice channels allow users to speak to one another, video chat, share screens, livestream (including to a particular audience), and use a Spotify plugin to listen to music together. There is even the promise of using the service as a way to obtain virtual currency and virtual goods.

Moderation is particularly interesting on the platform. After living through the Trump years, we've all become increasingly familiar with issues around social media platform moderation. And, as with many of the other major social networks, Discord has a lot of discretion as to who can remain on its platform, reserving the right to suspend or remove accounts that may be in violation of its terms. In other words, their backyard = their rules. On Discord, however Moderation also sits directly in the hands of users. Settings permit chosen members to have admin power over a server, allowing them to set moderation levels and control who joins. This user moderation capability not only raises legal issues (e.g. would a brand lose immunity under Section 230 of the Communications Decency Act if it carefully curated who can speak or what is said on its Discord server?), and brand safety issues (e.g. how can a brand effectively monitor all of the content posted on a service this broad?), but also raises critical social justice questions. How do we know that chosen moderators are equipped to handle issues like silencing, hate speech or dangerous conduct or content? 

What's notable about the service, though, is that a significant amount of content moderation is performed by bots. Discords Bots (essentially software coded to perform automated tasks) actually perform a lot of functions on the platform, including welcoming members with a canned message, filtering out SPAM, translating, and more!  And when it comes to moderation, Discord Bots can sanction and even ban users who violate community or server guidelines. Welcome to the future!

ADVERTISING ON DISCORD?

Given its newfound popularity, brands are now taking notice and action. While paid advertising on Discord is, at this point, non-existent, and there are limited analytics tools available, advertisers have still found amazing ways to engage organically with consumers using the platform. For example, as recently reported by Garrett Sloane in Ad Age, Jack In The Box uses Discord as a place to hold fan parties, launch new menu items, hold giveaways for collectibles, have its mascot chat directly with consumers, and even livestream concerts (which it recently did in partnership with the band, Aquabats).

WHAT'S NEXT?

Discord's star continues to rise, with 150 million users and $7 billion valuation. Not too shabby. It will be interesting, however, to see whether Discord can maintain its status as more tech giants enter its sphere, and whether household brands will continue to engage with it, and other platforms, promising to carry us (and our purchasing power) into the future.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.