Record Labels Want to be Paid for Their Songs

Video game makers have utilized royalty free music in several ways for years. Soundtracks for video games have been used free of charge since The Legend of Zelda. However, music labels see it differently if they own the copyrights. Games using the most famous songs of the ’80s and ’90s should come at a price.

Similar to the iTunes arrangement, music labels think that whenever music is used or downloaded, the consumer should pay for it. While the promotion to have some of Metallica’s songs on Guitar Hero or Rock Band may be an excellent promotion, record companies like Warner Music still want to be compensated, just as they are in relation to Apple and MTV when they use or sample music. As a result, the debate has gone on for some time as to how much, or even if, music labels should be paid by game developers to use their products for games.

iTunes: Makes labels happy.

There have been many accounts as to why music labels feel they should be paid for use of their artists’ music. And why game developers feel they shouldn’t, and why, in some cases, it should be the reverse. According to EDGE magazine, Warner Music CEO, Edgar Bronfman, is very displeased with the way the label is being compensated for its music: “The amount being paid to the music industry, even though their games are entirely dependent on the content we own and control, is far too small,” Bronfman said.

But Activision CEO, Bobby Kotick, disagrees. He says music-based video games have an impact on bands that are very significant. These games, he said, can increase song downloads and increase ticket sales. “We compensate artists and publishers extremely well. There are millions and millions of dollars that are being made and paid,” Kotick said. “There’s a misunderstanding of the value we bring to the catalog. When you look at the impact it can have on a Van Halen or Metallica, it’s so significant that you sort of question whether or not… you should be paying any money at all and whether it should be the reverse.”

One obvious problem coming from music labels not being “significantly” paid relates heavily to the fact that album sales have been low and are sinking with each released album, thanks in part to the current trend of downloading. It’s true that artists and labels are getting a share of the profits, but in comparison to the video games industry, music labels aren’t nearly as successful.

Entertainment executives and video game makers have been at odds for some time over royalty and revenue rights. In this past June, Anthony Puzo, son of The Godfather author, Mario Puzo, filed a lawsuit against Paramount Pictures for breach of contract over the popular movie-turned video game: The Godfather: The Game. The son claimed that the Puzo family is owed more than $1 million in unpaid revenue after an agreement formed in 1992 said Mario Puzo was to receive a “significant share in the revenue of all embodying elements of The Godfather,” reports TMZ.com. 

There’s no doubt that the video game industry has become the powerhouse of entertainment. According to the New York Times and Harmonix Music System Inc., AC/DC Live: Rock Band Track Pack will be released as a disc only game exclusively at Wal-Mart. And we all know that anytime a business, company, or music label wants to make the most off an upcoming release of a “hot” product, they sell it exclusively at Wal-Mart. The agreement was reached between the retailer MTV and AC/DC’s label, Columbia Records. Both the label and the band will be compensated for sale of the discs, which will be priced at $40, compared to the normal $60.

Tension between video game makers and music labels has been evident as labels like Warner Music maintain relationships with many of the bands involved in Activision’s franchise. And what may be worse, some albums, such as Metallica’s “Death Magnetic,” may even sound better to fans on Guitar Hero than on CD. 

Furthermore, the GH version of “Death Magnet” features extended solos from Metallica front-men James Hetfield and Kirk Hammett. They are available within the game as $18 downloads. Which brings us back to the original question: will Warner Music be paid extra?

So, as the war of words goes on, one thing is certain: music artists and gamers are benefiting the most from this ongoing feud. Whether music labels are paid or not, artists seem to be getting the money, and gamers seem to be the ones getting the most for their buck.