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Kotick: Maybe Record Labels Should Pay Us To License Songs
Kotick: Maybe Record Labels Should Pay Us To License Songs
September 26, 2008 | By Eric Caoili

September 26, 2008 | By Eric Caoili
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More: Console/PC



Activision Blizzard CEO Bobby Kotick wants music companies to take note of how video games help digital song downloads, instead of demanding an increase in licensed song royalties from game companies.

Kotick, whose long-term outlook for Activision depends to a considerable extent on the Guitar Hero franchise, even goes so far as to suggest record labels should actually pay game publishers, rather than the other way around.

Warner Music CEO Edgar Bronfman recently described the amount of money video game companies pay to the music industry for licensed songs as "far too small," considering that rhythm titles are "entirely dependent" on content controlled and provided by record labels.

"There's a misunderstanding of the value we bring to the catalog," Kotick says, discussing the issue with the Wall Street Journal.

"When you look at the impact it can have on an Aerosmith, Van Halen or Metallica, it's really significant, so much so that you sort of question whether or not, in the case of those kinds of products, you should be paying any money at all and whether it should be the reverse."

Kotick has responded to Bronfman's comments in the past, describing them as "one-sided and not "respectful of how much we’ve done to bring new audiences into the market."

To support his position, he has also noted that Activision's Guitar Hero: Aerosmith generated more revenue for the band than any individual Aerosmith album.

Universal Music Group president Zach Horowitz says that songs included in Guitar Hero sell two to three times more, and in some cases, the influence is much greater -- Weezer's "My Name is Jonas," originally from the group's 1994 debut album and featured in Guitar Hero III: Legends of Rock, saw a tenfold increase.

But is it the songs themselves that sell Guitar Hero and other rhythm titles? Says Kotick, "We have lots of music to choose from, lots of artists to choose from. A 12-year-old kid has no idea who Steven Tyler is or who Aerosmith is. The bulk of our consumers will tell you they're not purchasing the products based on the songs that are included. They're purchasing based on how fun the songs are to play when they're playing them."

Activision recently announced that it intends to triple the amount of its total released Guitar Hero games and content by 2010, and that it has no fewer than seven studios working on the franchise.


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Comments


Anonymous
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I find it awesome that someone can stand up to the music industry and say "No...*you* bend over".

Anonymous
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I'm sure the manufacturers in the games, like Line 6 and DW pay to be in the game. Why shouldn't it be the same for the record companies. The GH games give HUGE exposure of music to a new audience. You can't buy that sort of repetative advertising. I have bought individual songs on iTunes because of GH. I think Activision, and the GH series, have built up a lot of clout at this point, and they can basically tell the record companies to pay up, or their artists aren't going in the games, that simple.

Paul Lazenby
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Message to Edgar Bronfman - be thankful that our industry is helping generate cash for you, since you have done a miserable job of it yourself over the last decade. And maybe you should check to see who's driving the bus you're on... it's no longer you.

Allen Seitz
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""The bulk of our consumers will tell you they're not purchasing the products based on the songs that are included. They're purchasing based on how fun the songs are to play when they're playing them.""



I do believe this. I know I have my favorite musicians that I look for, but I discovered them from games in the first place.



The only time I think specific names of artists or songs actually do sell a game, is sequels. If a certain artist is in sequel #2, sequel #3, and sequel #4, and the fans always love the artist, then maybe they would expect to see him/them back in sequel #5.

Duane Decker
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The traditional record industry has collapsed because that old system is broken. But I have also watched as technology companies sell music hardware and software with no regard at all for the artists who created the music. I find that type of arrogance and greed to be just as offensive as any transgressions made by the record industry.



Before you join the gang mentality against the record industry, remember that artists need to be paid for their work. A doctor wouldn't be able to treat you without being able to pay his own bills. A plumber doesn't fix your sink for the fun of it. Without a revenue stream for musical artists, we will eventually end up without the music that brings such extraordinary entertainment into our lives.

Anonymous
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Perhaps the bands should cut the middle man (pimp) out and go straight to Games?



I'm sure they're all thinking about it now with the Aerosmith debut!

Gabe Carter
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I get the mentality behind reversing the flow of money here, but it would be terrible for the games. If that happened, it would turn into a bidding war for who can manage to pay Activision or Harmonix the most money to get their song into GH or RB.



Do you really have so much faith in Activision that they would turn down twice as much money for a crappier song?



I don't.

Brice Morrison
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This has also been an issue for Madden. Getting your track on a Madden game is a big enough deal that EA can sit back and choose.

Anonymous
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I've bought music on itunes only because I was exposed to it in Rock Band.

Jason Brau
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It's a partnership. Games need headliner bands/tracks to draw in the audience. Labels need the games as a new avenue to generate interest and sales.



For either side to pronouce itself master of the relationship is naive.

David Tarris
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The record industry seems to be full of nothing but old codgers who don't know what decade it is. You can't fight piracy with lawsuits, and you can't muscle around the games industry (as I've seen them do in the past) for more money. As others have said, if anything the record companies need Guitar Hero, not the other way around.



I think the days of the "middleman" with music are on the way out anyways. Any creative person with a couple creative friends and $500 in the bank can create a grade-a album, so really all you're getting from a label is publicity. There are, or at least will be, better outlets of exposure, and video games are just one of them.

Anonymous
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Record labels as they exist in the "Major Label" sense are pretty much worthless. Artists used to exist as a service to labels (work for hire and such) and its finally starting to change so that the labels exist as a service for artists. Digital Recording gear and Digital distribution have pretty much eliminated the need for their capital and their distribution networks as they are being replaced by a PC/Mac and myspace music.

Anonymous
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the last point is very valid...but since when has atvi given a crap about integrity of the art of games. they are the sequel and license hoarders, not innovators.

Scott Muir
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Payola was a disaster for radio, so why introduce it into the gaming industry? Sync licensing is one of the better ways for artists to make money without getting reamed by a label. It'd be a shame if that changed.

Brian White
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Just on the basis of having read this one article, I didn't think Mr Kotick's comment was necessarily put out there as a serious proposal, but more to make a point about how beneficial it is for artists, and for whatever labels they may or may not be associated with, to have their music worked into games like GH.



He may indeed be serious, but I can also see this just being a kind of reactive rhetoric in response to calls for bumping up royalties.

Jamie Mann
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It's a bit premature for either EA or the music industry to be making big noises around revenue sharing. The market is currently in it's infancy, with huge amounts of demand and limited supply: as a result, new releases get huge publicity, which helps to increase public awareness of the artists behind the media.



As supply grows, the level of free publicity associated with each release will drop - indeed, oversupply may well lead to a loss of revenue as people fail to find what they're looking for - XBLA is a prime example of this and Rock Band is on it's way to a similar fate: there's approximately 300 DLC songs available, which can only be managed via a fairly crude interface. XBLA has undergone a major restructure (and the threat of a games cull) to try and address this: Activision and Harmonix don't have the same level of flexibility due to their cross-platform architectures.



Of course, the statements from both sides are essentially intended to try and extract maximum value from the initial "free publicity" bubble - I doubt anyone seriously expects the current financial curves to continue into the future.

Anonymous
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would the game be as fun if the tunes were generic annoymous backing tracks... most ppl dont dance to tunes they dont know...



would anyone suggest that tony hawk, madden, any one of the personalities in sports games to pay in order to appear in the game...



even if they decided to have the songs written/played/and recorded in house they would still have to pay some kind of royalties or saleries for the writers and players

norb rozek
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>>Before you join the gang mentality against the record industry, remember that artists need to be paid for their work.



HAHAHAHAHAHAHHA...you'll have a much easier time finding a musician who DIDN'T get their money from their record label than one who actually got what was owed them...

Duane Decker
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Hi Norb,

I'd love to discuss your views regarding the record industry and the music industry in general. Please contact me at DDMusic@comcast.net. I'd love to hear your story and why you feel this way.

All the best,

Duane

Scott Muir
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A decent breakdown of the process can be found here: http://www.arancidamoeba.com/mrr/problemwithmusic.html



"Record deal" is somewhat of an oxymoron...


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