http://www.gamasutra.com/php-bin/news_index.php?story=20418

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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It seems to me that this a two-way street the gaming and music industries have set up. While rhythm games are often very dependent on licensed songs to sell copies, and should therefore pony up some cash, Activision is right that songs featured in those games often see increased sales, so asking for more money seems crass, tasteless, and ultimately self-defeating.

Although we must keep in mind that this is the same music industry that just got radio stations to pay them to advertise their songs, and that Wall Street has proven that thinking about the day after tomorrow isn't the average executive's strong suit, so this move isn't really all that surprising.

What do you guys think? Should publishers pay more to license music, should we keep the status quo, or should record labels think of games like Guitar Hero et. al. as free, lucrative advertising?

Damn right ...Kotick u tell those bloodsucking music publishers ...

I can see where he is coming from. I know I have gotten into a few new bands just because I liked their songs on Guitar Hero.

Asking the greedy record companies to pay you? HAHAHAHA nice one, Kotick.

it was also Kotick who said that all 3 next-gen consoles should be priced at $199 so they can sell more software. Looks like Mr Kotick only worries about his own pocket. Not that the record labels are holy themselves.

If they start charging music companies for them to put there music on GH/RB I want a cheaper game. Why should they get paid twice, once by us and once by the artist.

There's a better chance at getting more music on the disc than getting a cheaper game. However, the digital downloads may end up being cheaper because of this, but it's doubtful.

They'll never get the labels to pay them to put music in their game, even though all parties involved would benefit. As was pointed out, most executives fail to understand how things impact the day after tomorrow.

I don't know if they should pay Activision, but at least the record labels shouldn't demand royalties, the increased publicity the game gives to the songs pays for itself. Go ask Dragonforce

The executive did raise that point, and while I'm loathe to see record labels gouge other people even more (personal rant omitted), I do have to disagree about not demanding royalties. While it's true that having your music in such a game only benefits you in the long run, something in me rebels at the thought of giving away your property without getting some direct compensation in return (hypocritically, this only applies for me in areas where not doing so is not traditional: I was happier when radio stations didn't have to pay royalties, because they never had to pay them before...).

More to the point, few games are Guitar Hero, or even Rock Band. Most rhythm games are going to be more along the lines of Rock Revolution in popularity, i.e. they won't spread far beyond a small niche. In those cases, giving away your music would probably not pay for itself. And if you only let Guitar Hero/Rock Band get away with using your music sans royalties, you're favoring Goliath and punishing David.

Personally, I say keep the status quo, but whatever you do, Record Executives, do NOT kill this goose, please. For all of us.