December 21, 2008
Music Video Games Boost Artists Popularity, Sales
All across America, teenagers are discussing and praising the complexity of Aerosmith's "Train Kept a Rolling." They are mentioning how difficult The Rolling Stone's "Gimme Shelter" is to play on the guitar.
Confused? Don't be! These are songs on the "Rock Band 2," and "Guitar Hero" games that are being played across the country.
And happily for the original artists, these songs' sales have increased twice as much after they were made available on the games. Well-known bands have begun clamoring to put their new music on the new games. As compact disc sales continue to decline, record labels are becoming more involved in the manufacture of these products.
For now, the Recording Industry Association of America targeted its U.S. members' sales at $10.4 billion in 2007, decreased from 11.8 percent last year, with a bigger decline anticipated for 2008. Comparatively, music video game sales have doubled this year alone, striking $1.9 billion this year, say the NPD Group.
Aerosmith had a bigger profit on the release of "Guitar Hero: Aerosmith" than its last two albums combined, said Kai Huang, co-founder of RedOctane, which first created "Guitar Hero."
"The kind of exposure that artists can get through the Guitar Hero platform is huge," said Huang.
Even though Warner Music Group Chief Executive Edgar Bronfman Jr. complained over the "very paltry" licensing fees record labels receive from game manufacturers in August, the labels keeps sending their music to game makers.
It is because the companies lack leverage. Even Universal Music Group only controls a third of the U.S. market, announced Wedbush Morgan entertainment analyst Michael Pachter.
"There are literally probably 2 million songs out there, and fewer than a 1,000 were used in these two games combined in these last two years," Pachter said. "If Warner wants to say we'll take our 20 percent of the market and go away, a lot of bands are going to leave the label if they think they can get better exposure by being on these games."
Artists like Nirvana and the Red Hot Chili Peppers saw their music sales increase dramatically after being released on the games. There are also special editions, like Aerosmith on "Guitar Hero" and, soon, The Beatles with MTV Games.
"It's a way to save the music industry," said Grant Lau, a 40-year-old bar worker who started the play-along night at the Hyperion three years ago for a friend who owns the bar.
Lau adds that the games guard artists and recording companies from piracy since buyers must own the console equipment to listen to any new music, which must be bought on sanctioned game sites or on special game-formatted discs.
"You actually have to buy the music," he said. "You can't just rip it and put it on (file-sharing site) Limewire."
The interactive play-along games are a marriage of karaoke and open-mike night. "As soon as you play it, you like it a lot more, and then you buy it," said Tan Doan, a 26-year-old Web developer from Long Beach.
A new characteristic on October's "Guitar Hero: World Tour" lets users to generate new songs, creating a place to find music, as well as compose it.
Since more than 65,000 original songs have already been uploaded, RedOctane's Huang thinks that music video games will "become the biggest platform for music distribution in the world."
"We still have great relationships with most of the (music) industry. We continue to really benefit each other," he said. "At the end of the day it's about creating a great game for the users. We'll figure this stuff out."
22 million units of "Guitar Hero" have been sold in the U.S. since October 2005, with 5 million units sold of "Rock Band" since 2007, says the NPD Group. The newest "Guitar Hero" is twice as expensive as last year's version because it has a drum set and a microphone.
"They're selling out," said Cowen & Co. analyst Doug Creutz. "In the U.S., supply is a lot tighter than they were anticipating."
The games' appeal is obvious for the amateur who secretly desires to be a rock star in the comfort of their living rooms.
Alex Morsy says the games satisfy his love of playing music notwithstanding his lack of talent.
"I'm tone deaf," he laughs. "I tried learning piano one year but I totally sucked at it. I'm not very musically inclined, so this is fun."
On the Net:
- Recording Industry Association of America
- Guitar Hero: Aerosmith
- Warner Music Group
- Universal Music Group
- Wedbush Morgan