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Nobody expected the number-one-with-a-bullet rise of the music videogame—least of all the music industry. Armed with little more than crappy graphics, plastic guitars, and epic hooks, play-along titles like Guitar Hero and Rock Band have become an industry in their own right, raking in more than $2.3 billion over the past three years. Album sales fell 19 percent this past holiday season, but the thrill isn't gone—it just moved to a different platform.
The success of these games is good news for the music biz. They're breathing new life into old bands (Weezer, anyone?) and helping popularize new ones. They're even becoming a significant distribution outlet for new releases. So the record labels ought to be ecstatic, right? Nope. They're whining over licensing fees.
"The amount being paid to the music industry, even though [these] games are entirely dependent on the content we own and control, is far too small," Warner Music Group CEO Edgar Bronfman told analysts last summer. The money Warner receives for the use of its songs is "paltry," he said, and if the gamemakers don't pony up more cash, "we will not license to those games." In response, Rock Band publisher MTV Games is now boycotting Warner artists, according to a source close to the negotiations.
This is a fight no one can win. Putting the brakes on music gaming would hurt everyone in the ailing music industry. Instead of demanding greater profit participation, Warner should be angling for creative participation. Thirty years ago, Hollywood took a similar threat—the VCR—and turned it into a new source of revenue, building customer loyalty in the process. The music industry could use new games the same way—but its track record suggests that it won't.
Read the whole article here.
The success of these games is good news for the music biz. They're breathing new life into old bands (Weezer, anyone?) and helping popularize new ones. They're even becoming a significant distribution outlet for new releases. So the record labels ought to be ecstatic, right? Nope. They're whining over licensing fees.
"The amount being paid to the music industry, even though [these] games are entirely dependent on the content we own and control, is far too small," Warner Music Group CEO Edgar Bronfman told analysts last summer. The money Warner receives for the use of its songs is "paltry," he said, and if the gamemakers don't pony up more cash, "we will not license to those games." In response, Rock Band publisher MTV Games is now boycotting Warner artists, according to a source close to the negotiations.
This is a fight no one can win. Putting the brakes on music gaming would hurt everyone in the ailing music industry. Instead of demanding greater profit participation, Warner should be angling for creative participation. Thirty years ago, Hollywood took a similar threat—the VCR—and turned it into a new source of revenue, building customer loyalty in the process. The music industry could use new games the same way—but its track record suggests that it won't.
Read the whole article here.
