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Guitar Hero publisher frowns on Warner Music's call for higher royalties
Leo Chan - Friday, August 15th, 2008 | 11:39AM (PT)


Activision Blizzard says there's plenty of rewards which music games will bring for artists with major labels outside of standard royalties

Warner Music Group CEO Edgar Bronfman raised some hairs with publishers of music games earlier this month when he lamented that the producers and distributors of such enterprising entertainment aren't paying what they should for the licensed music tracks which keep their titles afloat. Bronfman suggested that the music industry should receive higher royalties from the gaming industry for use of music from artists under major record labels.

Guitar Hero publisher Activision Blizzard is one of the first companies which wouldn't take WMG's suggestion sitting down. It sorta helps that Activision Blizzard is has French media conglomerate Vivendi SA as a majority shareholder; Vivendi in turn owns Universal Music Group, the largest group of labels in the recording industry and one of WMG's rivals. Criticizing Bronfman's comments as "one-sided", Activision Blizzard CEO Robert A. Kotick explains that music games bring more value to artists outside of the business models hawked by labels. As many of you will have already guessed, a real benefit for artists having their works in music games is increased exposure. Kotick further confirms that the publisher will continue to work with labels which do "recognize and appreciate how much we can add value to their artists."

"I think his view was ... that [Warner Music] should be compensated the way they might for a performance on iTunes," said Mr Kotick. "But this is an entirely different business that is very technically complex.

"We're introducing a whole new group of artists to new audiences that is resulting in their iTunes downloads being exponentially higher than they would otherwise be, [as well as] new album sales and new merchandising opportunities."

Kotick stresses that "capital and resources" must still be invested into the production of music games to ensure that artists' tracks are quite simply, fun to play in-game. So once again it's a whole different kettle of fish when it comes to value of licensed music tracks in rhythm action games.

WMG has since clarified that it has "enormous respect" for the gaming industry, and more importantly its contribution to increasing exposure for the music industry. According to a WMG spokesperson:

We hope that our partners in the gaming space appreciate not only the value of their own contributions but also those of the recording artists, songwriters, record labels and music publishers on which their games are significantly based.

Guitar Hero publisher frowns on Warner Music's call for higher royalties Image 1

Source: Financial Times

Section: Console Games

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