Ian Hall
English 110
Professor Turner
20 November, 2008
Videogames: The Future Of The Music Industry
Around the world, millions of casual and hardcore gamers rock out with plastic guitar and drum peripherals, interacting with the music they love. The first Guitar Hero caught on quickly when it was released in 2005, and it has become a social phenomenon. Videogames such as Guitar Hero, Rock Band, Karaoke Revolution, and Singstar are revitalizing an industry that has been slowly dying. An estimated one billion songs are illegally downloaded every month through peer-to-peer networks (Bruno). Piracy is plaguing the music industry, and CD sales have been steadily declining. As a result, record companies and artists are relying on other sources of income, while the most profitable option for them is to utilize interactive music videogames and expand the library of songs available through these games.
These interactive music games are now bringing a new form of income to record companies and musicians, known by many gamers as downloadable content (DLC). Harmonix, the developers of Rock Band, have been releasing songs as DLC on a weekly basis since the game was first released in November of last year, and plans to have over 500 total songs available by the end of this year (rockband.com). This is significant, as it marks the beginning of an era in which a person could find almost any song in a music videogame. Harmonix and its employees have repeatedly stated that Rock Band is not just a videogame—it's a platform (Kay). What this means is that any song (or DLC) that is purchased for Rock Band will work across all future Rock Band titles. The potential for a massive music library within this platform grows steadily every week. Unfortunately, it is not as simple as merely obtaining a license to a song; the developers must go through a lengthy and regimented process for each song they want to add to the game. However, as the market for interactive music videogames grows, companies such as Harmonix will be able to hire more developers, which will enable them to add even more songs every week.
Interactive music videogames are popular because they allow anyone, even those without any musical talent, to feel like they are playing the music as a real musician would. It is a new way to experience music that many would agree is simply more fun and more interesting than listening to an MP3, which is why there is a large population of people who are more willing to pay for DLC than for MP3s. The plastic guitars may not be realistic at all, but with Rock Band's introduction of the drum set to these types of games, realism is not so far away. Somebody who has never played the drums before can start playing the Rock Band drums, get really good at it, and then move on to playing real drums. Some people even go as far as hooking up an electronic drum set and use Rock Band as a fun way of practicing songs.
Before Guitar Hero was released, most people were only aware of one way to experience music digitally, which was by listening to it through speakers or headphones. Advancing technology has always been important to the music industry, and Guitar Hero is a good example of a new way for the music industry to take advantage of that. But in some cases technology has been detrimental, especially since the advent of cassette tapes and floppy disks allowed people to easily make copies of music or computer data. Before there were digital means of storing data, most things were stored in an analog fashion. The problem with copying analog data is that it degrades every time it is copied, and the quality of it goes down, so things were rarely copied back then. But when digital technology began to take over, piracy did too. The convenience and the speed of the Internet made illegal stealing of music extremely easy, and therefore, highly tempting. When Napster, one of the first peer-to-peer file-sharing services, was forced to shut down in 2001, it had seventy million subscribers (Fisher 4). With that many people stealing music, there is no doubt that record companies and musicians would be losing money. If each of the seventy million subscribers pirated at least one song, then the music industry would have lost at least seventy million dollars. In 2001 and 2002, sales of blank CDs in the U.S. were higher than sales of prerecorded CDs, and sales of record albums decreased by about 9 percent (Fisher 5). More people started to use blank CDs to make copies of music albums for friends and burn copies of music they pirated as an alternative to purchasing albums. Trends have continued, and while many people illegally download music, record companies and musicians lose money. Susan Butler states that, as a result of online piracy, “the U.S. economy loses $12.5 billion in total output annually (i.e., revenue and related economic performance) and 71,060 jobs, U.S. workers lose $2.7 billion in earnings annually, and U.S. federal, state and local governments lose a minimum of $422 million in tax revenue annually.” The problem is that it is usually easier, faster, and cheaper to obtain music by pirating it.
Due to these losses, the music industry has been looking for new ways to make money. It is in record companies' and musicians' best interest to come up with a product that cannot be stolen easily, so that they will not lose money from it. Some companies are already coming up with new ways to try to accomplish this. Nokia has teamed up with Universal Music, Sony BMG, EMI and Warner Music in order to produce a cell phone in which consumers can download as many songs as they want for one year, and then they have to purchase another phone if they want to continue downloading more songs (Sabbagh). Stephen Bryan, the senior vice president at Warner Music, says that “We think [subscription services] will help tempt people away from illegal music and keep them in a legal music service” (Sabbagh). Subscription services such as this have been done before, but have never been tied to a cell phone. They can be a great deal for both the consumer and the companies involved in making it. For example, person A, who really loves music, might want to download anything that sounds interesting, and will save lots of money because he is paying a fixed yearly fee. Person B, who has the same subscription, might only care to download a few songs, which will result in the music companies gaining more money. When there are thousands of customers paying for a subscription such as this, the amount of “person B”'s will add up and the music companies will reap the rewards. Some suggest that this subscription strategy should be applied as an internet tax of $5, to be paid to Internet Service Providers (Ingram). It would be a simple, effective solution to the music industry's internet piracy losses, but the people who are not pirating music would not be happy about paying for something that they are not a part of.
Another way in which record companies are trying to make more money is by forming contracts with artists in which they get a portion of the money earned from merchandise sales and ticket sales (“Digital Entertainment: Full Circle”). Even though CD sales have been declining, fans are just as willing as ever to purchase tickets to see their favorite band. Antony Bruno, a writer for Billboard.com, makes a strong point about the touring industry in his article titled “Digital Entertainment: Full Circle.”:
"The ace up the touring industry's sleeve is the cold hard truth that a concert can't be pirated. You can't steal a live show. You can't send it to millions of other users with the press of the button. Sure, maybe some can distribute a bootlegged recording of a live show or post cell phone videos on YouTube. But ticket sales, merch sales, concession sales, sponsorship dollars -- those are pirate-free."
The key word here is “pirate-free.” A pirate-free product is what the recording industry desperately needs. That is why the record companies want to get some of the revenue from ticket sales, as it helps make up for their piracy losses. However, this is not helping the artists. Prince said that he “made more money selling 100,000 copies of The Crystal Ball, which he released himself online (only in 1998), than he did from sales of seven million copies of his breakthrough album, Purple Rain, under Warner” (Ho). Record companies are continuing to squeeze more and more money out of contracts, and artists are making less money.
As a result, some artists are steering clear of record labels, and have been handling their music independently. Trent Reznor, the man behind Nine Inch Nails, has been saying for a while now that the recording industry needs to change, and has been releasing albums for free on the Nine Inch Nails website ever since his last recording contract ended (“Nine Inch Nails: 'We're free agents'”). Nine Inch Nails is not the only band giving away their music for free. Radiohead was the first to do so with their album “In Rainbows,” in which they let the consumer choose how much they wanted to pay (Harding). Also, Prince gave away three million copies of his 2007 album, “Planet Earth,” about a week before it was officially released (Ho). For some artists, such as Prince, it is more important to get their music out to as many people as possible so that they get more people to come to their live performances. The best way to do that is by giving the music away for free, and to encourage everyone to share the music and spread the word.
Rather than digging more holes into artists' wallets and taking their concert revenue, record companies and artists should release songs as DLC for interactive music videogames, which are as close to pirate-free as anything could be to ticket sales. Piracy is a large reason why the industry needs to turn to videogames, as DLC in videogames cannot be pirated easily by the general public. Ordinary MP3s, however, can be stolen easily by anyone, making it less likely that they will purchase them. The problem with pirating DLC from Guitar Hero and Rock Band is that, in order to use it within these games, one would have to “mod” their console, rip all the data from the game disc onto a computer, modify the data on the disc so that it incorporates the DLC into it, and finally burn it to a DVD. This is, as one might expect, a long and complicated process. Even with the detailed customization guides that can be found on the ScoreHero forums (a Guitar Hero and Rock Band fan site), one would be hard-pressed to try it (Scorehero.com). On the other hand, DLC can be used within various Guitar Hero and Rock Band imitations for the computer. These are not hard to obtain, as they are freely available for download on their own websites. However, if one chooses to play DLC on these games rather than the game that the DLC is meant for, he/she is also choosing to use an inferior product. One Guitar Hero imitation, called Frets On Fire, is one in which players are supposed to use a keyboard to play the guitar (Saltzman). Frets On Fire does not have any official leaderboards, online modes, active 3D band members playing in the background, and a number of other features that Rock Band and Guitar Hero have. Also, it can be a hassle just getting the game to work, assuming that the person trying to play it even has a decent enough computer to run it. These two methods of using illegally obtained DLC, by modifying a disc or using a PC clone, are either too complicated or too inferior for most people to bother with. Therefore, it is crucial for the music industry to make the move of putting more music in videogames, as the pricing of DLC ($1.99 or 99 cents for each song) is very similar to the pricing of MP3's sold on iTunes (99 cents for each song), and yet the difference between the amount of piracy of DLC and the amount of piracy of MP3s is huge.
Both Rock Band and Guitar Hero have proven to be great promotional tools for any artist, leading to boosts of online sales, despite the fact that internet piracy is abundant. One article states that Activision, makers of Guitar Hero III and Guitar Hero: World Tour, said that “bands whose songs are included in the game can expect online sales of their music to increase by an average of 300% as a result” (“Playing Along; Videogames and Music”). Dragonforce's song, “Through The Fire and Flames,” was included in Guitar Hero 3, and went from having sold 55,000 copies online before Guitar Hero 3 was released to having sold around 624,000 copies today (“Playing Along; Videogames and Music”). The fame that comes out of putting a song onto these games is immense, and artists should be clamoring to get their songs in these games.
Not only that, but Rock Band's DLC tends to sell better than ordinary online retailers such as iTunes. Bruno states in his article, “Digital Entertainment: Game Theory,” that a new Motley Crue single, “Saints of Los Angeles,” sold “more than 47,000 times via the Xbox 360 version of the game alone in the first week after it became available,” while it only sold about 10,000 copies through other online retailers. Bruno also mentions that six weeks after Black Tide's single, “Shockwave,” was released as Rock Band DLC, it had sold about 10 times more there than it did elsewhere. These statistics are good examples of how these videogames can even be helpful for new music, and new upcoming bands such as Black Tide. It's not just the well-known bands that sell well in these videogames. According to Sergio Pimentel, music licensing manager of Sony Computer Entertainment Europe, SingStar has resulted in £28 million in royalties being paid to the music industry (Masson). In October, Harmonix announced that “the Rock Band online music store recently surpassed 21 million paid downloads since the game’s launch” (rockband.com). All signs point towards these games being more successful and more profitable than any other digital form of selling music.
With each new technological advancement, there has been a change in the way music is presented and sold. Being the most profitable new way for musicians and record companies to make money, interactive music videogames will take the music industry into a new direction in the same way that vinyl records, cassette tapes, and compact discs did. With the increase in sales at online retailers, and the huge sales of the DLC itself, the music industry will, without a doubt, take advantage of the opportunities interactive music videogames have to offer. Soon, everyone will be talking about how fun it is to play a song, as opposed to how good it sounds. Record companies and artists will both profit immensely from this new era of music videogames, but they must first embrace it.