The music industry attacks video games?

The music industry's inevitable battle with the videogame industry begins when one media company comes out with a successful product that uses another media company's content, you can bet a fight over compensation is coming soon -- especially if the latter media company is a music label.

So just as the music industry went after MTV and peer-to-peer networks and streaming Internet sites and then YouTube, it's now after the videogame industry.

Thus we have Warner Music CEO Edgar Bronfman recently telling Reuters: ""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."

How did Activision Blizzard CEO Bobby Kotick, whose company publishes "Guitar Hero," respond? "We're introducing a whole new group of artists to new audiences that is resulting in their iTunes downloads being exponentially higher than they would otherwise be, [as well as] new album sales and new merchandising opportunities."

Take the word "games" out of Bronfman's statement and he could easily be talking about musicvideos on MTV or online, songs being used in YouTube clips, streaming Internet radio, etc. It was the same argument over and over. And Kotick's response, essentially that his products are helping to boost music sales by exposing artists to new audiences, is exactly how MTV and Internet companies always responded in the past.

It's worth remembering that the music industry has largely won in the past, either through corporate pressure or lawsuits. On the other hand, the music biz is in really dire straits these days and I think it's pretty undeniable that "Guitar Hero," "Rock Band," etc. are boosting downloads and album sales at least somewhat.

Nonetheless, music labels see a potentially lucrative source of revenue growth at a time when their traditional business is slumping and you can bet they'll be going after a bigger chunk of it aggressively. Especially with more music games coming out in the future ("Lips," "Ultimate Band," a million "Guitar Hero" spin-offs, etc.) you can bet this fight is only getting warmed up.

Personally, I find this to be a sticky subject. Music and rythem based games are all the rage right now as Guitar Hero and Rock Band have paved the way for a whole new generation of fans to enjoy classic songs. Not only are these games played by avid gamers but go to your local pub on a friday night and chances are there will be a Guitar Hero tournament in progress. This feeds into the theory that the music industry should be properly compensated for the mass appeal of these types of games, but they also aren't in the position to be making demands.

Hopefully this is an issue that will be resolved soon as there is a possibility of WMG pulling its catalog from the upcoming RockBand/GH games as well as the online downloadable songs. This would be a major blow to the future of these types of games and much like when Napster was shut down there really will be no winner in the end. The music industry needs to stop being so short sighted and realize this could be the beginning of a successful new business model for them in the digital age. Record companies already dropped the ball big time with their witch hunt against file sharer's and this could be even more catastrophic to their future.