“Why the Music Industry Hates Guitar Hero”
Ryan VeerkampSergio Cirinas
Neil Potter
By Jeff Howe, Wired Magazine
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Overview• Current State of the Music Industry• New Trend: Music Videogames– Threat or Opportunity?
• Industry’s Reaction and Perspective• Positives for the Industry• What should Warner Do?• Past precedents
Current State of the Music Industry• Album sales fell by
19 percent this past holiday season
• ITunes number one music store, recently passing Wal-Mart
• Industry still plagued by pirating
New Trend: Music Videogames
• Guitar Hero and Rock Band have made $2.3 billion over the past three years
• Cultural phenomena: bars, karaoke, etc.• Three versions of Guitar Hero released• Good thing for the music industry?
Industry’s Reaction
• Whining over licensing fees– Games are entirely dependent on content the record labels own
• Rock Band boycotting Warner Music/Artists
•A fight that no one can win
Industry’s Perspective• Warner Music believes that record labels have been
ripped off too many times in the past
– MTV sold in 1985 for $690 million on the strength of videos it received for free
– Apple denied record labels control over pricing on ITunes
Positives for the Industry• New channel for advertising• Consumers relate to bands and their music
• Breathing new life into old bands• Aerosmith, has earned
more from Guitar Hero: Aerosmith than any single album in the band’s history
• Both record companies and retailers have seen sales of songs and groups increase 200 to 300% after their inclusion in Guitar Hero
• 76% of people who play Guitar Hero actually buy music based on their video game play
Positives for the Industry
What Should Warner Do?
• Push for more Warner titles and integrate them into promotional strategies
• Music videogames could eventually become online music retail channel that could rival ITunes
• Game for turntable artists, provide songs and let users mix their own versions, while Warner could sell back mixes to customers (Wii-Mix)
Past Precedents• Music Industry needs to see this increase in
popularity of music as an opportunity not a threat
Fought pirating vigorously instead of adapting to
online outlets
Hollywood turned the VCR, a potential threat, into a revenue source,
building customer loyalty in the process
Threat Opportunity
Conclusion• Whining over licensing fees is a fight that won’t
be won
• Fighting game makers will not solve the industry’s problems
• Music videogames and their rising popularity should be treated by record labels as an opportunity and not a threat