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Execs debate: should music games pay royalties to artists, or the other way around?

Posted Sep 26, 2008 at 7:59AM EST by QJ Staff

Listed in: Xbox 360, PS3, Wii Tags: Activision, Activision Blizzard, Blizzard, Edgar Bronfman, Robert Kotick

Activision - Image 1

It's a chicken-or-egg question: should music games like Guitar Hero and Rock Band pay royalties to music labels, or should it be the other way around? Well, music games wouldn't be as fun if they don't have songs from popular artists. But then, music labels wouldn't sell as many albums as they are now if it weren't for music games.

This issue is currently what execs of Activision Blizzard and Warner Music are debating over. Warner's chief Edgar Bronfman recently described royalties from game companies as "paltry." In fact, he adds that they should charge the music games more because they are "entirely dependent" on licensed music.

Activision Blizzard's CEO Robert Kotick, on the other hand, disagrees (of course). In case you didn't know, Activision is the company behind the hit Guitar Hero franchise. Kotick counters Warner by saying that music games boost sales of albums. He also adds that they are not entirely dependent on music labels, saying that:

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.

In fact, Kotick went so far as to say that music companies should consider paying game companies royalties:

When you look at the impact [Guitar Hero] 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.

So who owes who? Personally, I think that game companies should pay music labels royalties for the right to choose which songs to add to the game, while music labels should pay game companies if they want to plug certain songs or artists. But that's just my opinion. What's your take on it?

Via The Wall Street Journal

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Hard to say who benefits the most out of that relationship. It's win-win for everybody. Two solutions:

1. Somehow calculate who's profiting the most out of a deal and go from there.*

or

2. Nobody owes anyone anything and they both see profits anyway.

* It's probably close to impossible to determine this because of all the factors involved.

# not everybody.. — NeilR 2008-09-26 10:46

It's only a win-win for everybody if the artist gets his royalties.

The argument that artists wouldn't sell as well if it wasn't for music games is pretty weak; down right egotistical. I see it more like the music games wouldn't be selling as well as they are if it weren't for the music (popular music) they contain.

# Well... — Shatterdome 2008-09-26 10:50

out of 20 or so people that I know that play rockband/GH....none of them have gone out and bought any albums based on what they have heard in the game. However they have all bought ALOT of DLC based on which Artist it was and who they liked.....so they didn't have to play crappy songs of people they never heard before or liked....

So if you ask me, I think the games companies are benefiting much more then the music industry/artists....

They can say they don't need big names to sell their game...but ya, go ahead and try to release a title with songs no one has heard or like.....

Hell this was even a problem in early GH games because the songs were only covers....still recognizable songs but they were missing something because they were not genuine.....

# not a bad song — Nevers 2008-09-26 12:00

... just hate when songs can't get out of my head...

hrs later... still hearin' it... lol

# hmmm — Koru-Kun 2008-09-26 12:31

Since music games are, to put it bluntly, a grouping of all these different artists and their songs into one while you are able to play along with them. The video game developers already pay for the licensing to use their music and on top of that the artists get attention to their music out of the deal as well. It's a win-win situation for the music artists... but now, they also demand royalties? If the licensing deal with the individual artist didn't include that royalties be included into the licensing agreement, then there is no point in even arguing over it. I'm sure that the game developers can and will find other artists out there who will let them license their music sans-royalty inclusion.

The game developer has no right EITHER on demanding royalties from the artists just like the artists have no demand in receiving royalties from the game developers (or publisher or w/e) unless it was agreed upon by both parties in the licensing agreement. Tough luck for both of you money greedy bastards who are trying to over milk the cash cow!

# nuff — tanman37 2008-09-26 12:51

'nuff said.

# errr... — platon 2008-09-26 13:05

video games HAVE to pay royalties to the artist! it's a new way to make money for them, since there is always less people paying for music cds anyway

# C: None — pizzadad 2008-09-26 14:34

They should just make an original music game instead. I'm sick of Guitar Zero redefining the music genre.

# I guess Activision feels they aren't making enough money yet — pissteeth 2008-09-29 07:58

if game companies use this argument that they shouldn't have to pay because people buy their albums based on the game then anyone that uses an artist's music could make the same claim. I don't have to pay you for using your music on my movie, ad, television show because it helps your album sales for people to hear your song. I think it is clear that the game companies should pay royalties.

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Execs debate: should music games pay royalties to artists, or the other way around?

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