From Video Games To The Music Industry: Guitar Hero's Effect

In my previous blog post entitled, "An Obsession Over Stars: Industry and Economy Booster", I mentioned how the music industry was benefiting financially from the obsession that the American public has with celebrities such as Britney Spears. This week I explored the blogosphere to find what others were saying about the music industry and how it could be saved. One of the blogs that I came upon is found in The New York Times, which was written by David Edery, a worldwide games portfolio manager for XBOX Live Arcade, a research affiliate of the M.I.T. Comparative Media Studies Program, and author. His blog entitled, "Can Guitar Hero Help Save the Music Industry? A guest Post", offers a lot of valuable information with hard evidence that he has found while doing his research for his book. Guitar Hero and Rock Band, which were both created by Harmonix, allow its users to "play" their favorite songs with different peripherals such as a guitar (see left), drum set, or a microphone. The games come preloaded with a wide range of songs from different times of the music scene. Mr. Edery mentioned that the president of Universal Media Group claims that songs that were included in Guitar Hero will sell two to three times better than average. Another example is when Guitar Hero: Aerosmith (see right, below) generated more revenue for Aerosmith than any of their individual albums. Mr. Edery also mentions the deal that has been developing between MTVN and the Beatles that would create an entirely new music game based on the Beatles' music. A product such as this one which is expected to be released for the 2009 holiday season will generate a lot of revenue for the music industry. My second article is found in USA Today, it is entitled, "Bands' sales are feeling the 'Guitar Hero' effect", and it is written by Mike Snider. Mr. Snider makes mention of the Guitar Hero effect, which is when a song appears on Guitar Hero and its digital downloads increase exponentially. One of the biggest genres that is being affected is classic rock, with artists such as Kansas seeing an increase of young teenagers in their shows. Guitar Hero has also recreated interest in old music tracks that no longer have had any marketing attached to them, which has created revenue that was and probably would no longer exist. In addition to posting my comments directly on these blogs, I have also posted my comments below.

Can Guitar Hero Help Save the Music Industry? A guest Post
Comment:
Mr. Edery,
First and foremost I would like to thank you for taking the time to write this very informative blog. In your post you have mentioned almost entire positive that have come out of having such a game as Guitar Hero. It is a fact that a lot of artists have seen their music sales increase after being included in Guitar Hero and other artists have gone as far as creating their own version of Guitar Hero. The biggest example being the Guitar Hero: Aerosmith game, which produced more revenue for them than any of the individual albums, as you mentioned. I was wondering if there were any negative outcomes, for artists or the music industry, that were coming out of video games such as Guitar Hero and Rockband. Has there been any backlash among fans? Maybe they feel like their favorite band has sold out to mainstream corporate America by allowing their music to appear in video games. You said that not only had digital download sales increased but also full album sales. Currently it appears that everyone is benefitting and generating revenue by Guitar Hero, but will there be a time when Guitar Hero's download sales will cannibalize the sales of digital downloads and full albums? I was wondering if in the future, the consumers would be willing to spend money on duplicate copies of the same song? For now it seems like the video game industry is the new medium to be used for distribution and marketing of new music. This can already be seen by the influx of copycat video games, will the music industry's record labels have to come together or will maybe each create their own video game to distribute their artists music? I believe that if this sort of thing happens, the novelty feeling will disappear for the consumer and such video games will become unpopular and obsolete. I hope to read your next blog post and see if how you expect the music industry to react to such technology and how it will change their business models for the long run.

Bands' sales are feeling the 'Guitar Hero' effect
Comment:
Hello Mike,
I wanted to say thank you for writing your article on such a current and popular trend that has hit the consumer and music industry by surprise. In your article you mentioned the Guitar Hero effect, which is the increase in sales for an artist after they appear on the Guitar Hero video game. I wanted to ask if you had come up with that term or if someone else created it? In your article you mentioned how some underground or not so well known bands had seen an increase in sales after the release of Guitar Hero III. I was wondering if the increase in sales was greater for groups that were well less known in comparison to mainstream popular artists? I was also wondering if you believe that all artists were seeing Guitar Hero as a platform they wanted to be on. I am not sure if solo artists such as Justin Timberlake or Kanye West would benefit from games such as Guitar Hero or Rockband, seeing as their band is usually not the most important part of their performances. You mentioned that only song had shown a drop in sales, was this due to the fact that the fans of that artist felt betrayed by their favorite song being commercialized for the whole general public? I cannot wait to see how the music industry reacts to such new technology and if these videos games do end up being the saviour to such a struggling industry. I hope you keep us updated on any new developments that occur.

An Obsession Over Stars: Industry and Economy Booster

In my previous posts I have written about how the music industry is affected by online music services such as iTunes, Amazon Music, and Wal-Mart's MP3 Store. This week I decided to write about the obsession that the American people have with celebrities, as it can be seen lately with Britney Spears new album, and how those obsessions translate into money not only helping the music industry but also the economy as a whole. During these hard times any money that comes into the economy is good no matter where it comes from, but can we really stand by and do nothing while these people's lives are being destroyed? Artists have an understanding when they start their careers that at some point in their careers their life will no longer belong to just themselves, it will become public domain but I tend to disagree on how much of their lives should be available to the public. Although everyone seems to be benefiting from these current events, we will have to wait and see how long before a big incident occurs and makes us think twice about the real cost about obsessing over celebrities lives.

One of the celebrities that has the biggest following has been Britney Spears (see left), and her crazy life has caused an even bigger interest in what she does every minute of her life. A report on the Daily News says that Ms. Spears has helped boost the economy by $110 million to $120 million a year, apart from her music sales. The music industry, which includes her record company, promoters, and others have raked in up to $40 million. Although law enforcement and the judicial system has benefited with the publics obsession over Ms. Spears, by paying overtime to its police officers and court officers to protect her. The general has not benefited at all, in fact they are the ones who will have to pay for all these expenditures with their taxes. This obsession over her life has caused her to go crazy and in return more money keeps getting made off her life, this trend is a vicious circle that does not stop. The fact that she has children now has not made the public back off, her own managers seem to be informing the paparazzi on where she is going to be during specific times of the day. The money being generated of course helps a lot of people but at the cost of an individual's life. This is where I have to disagree with the music industry and the way in which they use their artists.

This entire obsession over celebrities and artists has caused a change in who has power in the music industry. Hundreds and thousands of blogs have been created on the Internet, which deal with music gossip and celebrity gossip. One of the biggest and most popular is PerezHilton.com (see right), which is maintained by no other than Perez Hilton himself. His status on the blogosphere has become so big that the music industry has started to give him a lot of power in regards to upcoming artists that he thinks are worthy of getting attention by the public. This article mentions how not only does Perez Hilton write about gossip but he has also been credited for boosting an artist's sales and image profile by writing about them in his blog. The article also says, "Warner Bros. Records was in negotiations to give Perez Hilton a development deal that would make him an executive on the label", which would be a huge change that demonstrates how the music industry sees the future of doing business. Managers want their artists to be featured on such blogs to increase their presence in the media, even though that press might not always be positive. This overexposure tends to help with sales of music albums and concert tickets but this raises the question again of how far managers will go to make a dollar, without taking into consideration how their clients, the artist will be affected.

Not everyone agrees with the power that celebrity gossip blogs and their authors are receiving, and it is to no surprise that the biggest opposition are artists themselves. Artists are saying that they are not sure if they want their careers in the hands of people who making a living on writing about gossip stories. Artists also understand that if gossip writers start joining the executive boards of record labels, this trend of having their personal lives on display for the whole public will never end. Even within the artist community, there is no consensus about how they feel about gossip blogs and their creators. For example the group N.E.R.D. likes the fact that there are bloggers such as Perez Hilton because they feel like their demographics go hand in hand with each other, and that any information being posted on those blogs only helps expand their fan base size.

In an industry where money has become the main objective, unconventional ways of generating revenue will keep coming up. Without disregard to their artists and their lives, record labels will keep using them until they are of no more value to them and then the record labels will move on to the next big thing, artist, that will generate more money. This trend that has set itself as the norm cannot stay intact forever. I believe that artists will unite and demand from their managers more respect when it comes to their personal lives. Artists will stop performing nonstop and will use their demand from fans and their celebrity status as a bargaining tool in order to get better treatment from their management teams, but as long as the American people want their gossip and record labels receive their money, I see no end in sight to the maltreatment and abuse of artists by their labels and managers.

Digital Music Distribution: The Music Industry's Future

In my previous blog posts I have mentioned how the music industry has been struggling to generate revenue with the continuous decline in CD sales. In my post entitled, "MySpace Music: The Music Industry's Saviour?", I mentioned how this new service had generated about $800 million dollars on paper already for the music industry. This week I explored the blogosphere to discover the other services that could generate revenue for the music industry. Recently Wal-Mart came back into the news by relaunching its MP3 store. The addition of Wal-Mart's MP3 store (see right) add competition to the digital music distribution mix, it allows consumers the ability to be able to buy music from other companies besides Amazon and iTunes. Wal-Mart is also introducing their service with lower prices for individual songs, $0.74 and $0.94 compared to the usual $0.99. This new pricing strategy that Wal-Mart might become beneficial to not only the labels but also the consumers. The lower prices set by Wal-Mart might cause Apple and Amazon to also lower their prices to maintain their current market share and be able to compete with the lower priced songs. If lower priced songs cause more consumers to legally buy songs instead of downloading them illegally, the music industry might see an increase in revenue. I searched and found the following two blogs that gave me an insight into what the current trend and future is for the music industry, regarding digital distribution. The first blog that I found was entitled "Wal-Mart MP3 store relaunches", and it is part of CNET's Digital Noise blog. The author is Matt Rosoff, a well-regarded blogger who specializes in how technology affects music. The other blog post that I found is entitled, "Outsourced Distribution Makes Perfect Sense", it is found on coolfer blog site. This blog offers analysis on the music industry and is a well respected and widely read source of analysis and news. In addition to posting my comments directly on these blogs, I have also posted my comments below.

Wal-Mart MP3 store relaunches
Comment:
Thank you for such a concise and informative post. I appreciate the fact that you reported on such a current and relevant issue that affects the way the consumers are able to obtain their music in today's digital music age. You decided to write about the relaunch of Wal-Mart's MP3 store, which in the past used to be one of the biggest music stores available to the consumer. Not until recently when they decided to close their online store, did consumers learn about the negative aspects of owning digital songs as opposed to actual CD's. When Wal-Mart decided to close their MP3 store, they decided to keep their DRM system in place for a couple of months but within the last 2 months they decided to turn off that system which would mean that thousands of songs that consumers had bought would become useless. This caused a huge uproar and Wal-Mart later decided to not turn off that DRM system to allow users to had legally bought those songs to keep them and still be working. Do you believe that after Wal-Mart received all that negative publicity and all those letters from the consumers, they realized how big of a market digital music sales really is, and is that the reason they decided to relaunch their MP3 store? In your post you also mentioned that they are offering top hits at only 74 cents per song but standard pricing would be 94 cents, which is still cheaper than most other online stores. Do you believe that they are doing this in order to steer customers away from the iTunes music store and Amazon music store? And how do you think iTunes and Amazon will react to this new pricing strategy introduced by Wal-Mart? You made a very clear point when you mentioned that AC/DC's new album was exclusive being distributed by Wal-Mart, yet their new album was not available in their online store. Do you believe that this is the cause of AC/DC's own management ideas or Wal-Mart prefers to keep those highly anticipated albums in their brick and mortar stores only to increase foot traffic. Wal-Mart also tends to have a very negative image among many people because of how they have made small business go bankrupt and their use of cheap labor in other countries. Would this negative image keep consumers from using their new online store even though it's cheaper? I would like to see a follow up post that shows if Wal-Mart's new music store is successful and how it compares to the other big online music stores.

Outsourced Distribution Makes Perfect Sense
Comment:
First of all, I want to thank you for keeping your readers up to date on current trends in the music industry and for compiling information from various sources and putting it together in nice and informative posts. You mentioned in your post that digital distribution has been getting all the attention but the physical world needs a huge overhaul in how business is conducted. I agree that labels and distribution companies no longer need to manufacture and distribute the same amount of CD's as before because of the sharp decline in music CD sales. I was wondering why I had not heard anything about these companies making changes to adapt to the present trends in consumer shopping. You mentioned how EMI is seeking to outsource (see left, above) its operations to reduce costs, but do you believe that in the long run this is going to be the right way to go? As CD sales keep dropping, the number being manufactured will also keep dropping, but this will cause a higher cost per individual CD because the fixed costs will not be spread over a larger number of CD's. Will this trend in fact make prices to go up for CD's, and if so, will customers just stop buying CD's altogether. I do like your idea that labels will have to come together and join their operations to reduce costs and increase efficiency but that as you mentioned that does raise a lot of questions regarding employee loyalty and even artist loyalty. In the end I believe that the way for the labels to go is full digital distribution but many hardcore music fans might not appreciate the fact that they will no longer be able to hold a hardcopy of their favorite music. Only time will tell when and if music CD's become obsolete.