Activision CEO rebukes Warner Music exec

Following record company's call for more royalties, Kotick says comments were not "respectful of how much we've done to bring new audiences into the market."

As the third-largest record company in the world, Warner Music is used to getting its way when it comes to matters of licensing its music. It would seem, then, that Warner CEO Edgar Bronfman's comments last week expressing dissatisfaction over the amount paid to the music industry by game companies licensing songs for use in the nouveau rhythm genre would spell an imminent hike in prices.

Of course, when the largest company in Bronfman's crosshairs also happens to be allied with the world's biggest record label (Vivendi-owned Universal Music Group), it isn't quite a one-sided debate. Speaking with the Financial Times today, Activision Blizzard chief Bobby Kotick responded to Bronfman's calls for higher compensation, saying they were not "respectful of how much we've done to bring new audiences into the market."

"I think his view was...that [Warner Music] should be compensated the way they might for a performance on iTunes," Kotick told the FT. "But this is an entirely different business that is very technically complex...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."

Reversing the tables to emphasize the growing importance of the Guitar Hero brand to the music industry, Kotick continued, "We're going to favor those publishers that recognize and appreciate how much we can add value to their artists."

French media conglomerate Vivendi SA merged its games group with Guitar Hero makers Activision in July, simultaneously creating the world's largest third-party publisher and bringing such best-selling franchises as World of Warcraft, Call of Duty, Diablo, and Tony Hawk under one roof. Vivendi SA also owns in whole the world's largest music company, Universal Music Group, which counts among its represented artists such acts as The Rolling Stones, Guns N' Roses, Def Leppard, and Robert Plant of Led Zepplin fame, to name but a few.

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Discussion

76 comments
division_9
division_9

Because of GH Aerosmith im never touching another GH again.

killzone_gamer
killzone_gamer

[This message was deleted at the request of the original poster]

killzone_gamer
killzone_gamer

That would make Rock Band a Guitar Hero rip off.

-cyninja3-
-cyninja3-

This game is going to be a rock band rip off.

WardCleaver02
WardCleaver02

[This message was deleted at the request of the original poster]

WardCleaver02
WardCleaver02

Dr Corndog-Thank you for bringing logic to this issue.

Franke_51
Franke_51

I would happily agree to saying screw you warner, but they have the license to AC/DC and i wanna see that stuff on guitar hero so this sucks...

Dr_Corndog
Dr_Corndog

Hvac0120: This isn't a legal issue. The game companies had to agree to pay royalties to use this music, and they're paying. What Warner did last week, after the contracts had already been signed, was to whine that the game companies "should" pay them more. The fact that both parties agreed to pay less, however, is proof that the amount that "should" have been paid is exactly what was paid. If Warner had had a legitimate claim to more money, they would have made use of it before striking the deal. Edgar Bronfman apparently hopes that whoever reads his comments is too ignorant of basic economics to realize that.

Dr_Corndog
Dr_Corndog

Considering that you still have to play full price for a track download on Rock Band or Guitar Hero even if you've already bought the song on the album or iTunes, and that the downloaded video game track won't play on your iPod, forcing you to buy the mp3 version of the song if you just want to listen to it...yeah, I'd say someone in the music industry is getting plenty of our money.

Hvac0120
Hvac0120

I don't think this rebuttal will hold up in court. Yes, the games are resulting in additional sales in the form of iTunes downloads and CD sales. However, just because you make a company more money, doesn't mean that the content owner is not still entitled to the profits from YOUR product. So, in my opinion Warner Music has a point and should win. It's not like I want the prices to go up on the DLC. I just don't think that the Guitar Hero owners have much support for why they won't pay up. This is going to end bad for the consumer in the end...

necronaux
necronaux

They should be thankful they're making money, instead of demanding a bigger share of the profits. But, no. No matter what happens, in the end WE are going to be paying even more for our games and our music.

rabbids
rabbids

Does it really mattr at this point?

Lucavi_Zalera
Lucavi_Zalera

I know I'm being simple minded, but who gives a s*** about anything the music industry says these days? Plus, if the music industry demands more money it would mean that low budget games, like Katamari Damacy, might just disappear, and that makes me a sad panda.

Mush_Mouth
Mush_Mouth

Warner's just angry because the majority of their artists have left for better record deals with Live Nation. Just about all they have left at this point are Red Hot Chili Peppers and I'm sure it's a matter of time before they leave, too.

Atarii
Atarii

I understand both sides in this arguement, but in the end I honestly don't care.

Atarii
Atarii

I understand both sides in this arguement, but in the end I honestly don't care.

spears2k
spears2k

The comments made by Universal are right on. Rather than Warner coming out and demanding more payment for their music being in GH, it should be record companies seeing what they can do to get their music into the latest installment. There's some music that I've heard in GH that I wouldn't have heard otherwise. Plus, I just think that the folks that make games like GH and Rock Band are just geniuses. Providing a way to connect with huge hits on a level other than just hearing them is just awesome.

azafirster
azafirster

Money, money, money. Man, when it comes to profit, people couldn't care even if your promoting the music itself. Smart music execs Warner.

FrankenLife
FrankenLife

This is what I was hoping would happen. I Warner wants to try to gold dig for reasons of greed, then GH should leave them be. let them know that making decisions like that will result in a loss for Warner.

VenomRitual
VenomRitual

Kotick is right on. seriously. just go on itunes or look at the billboard charts a few weeks after a new GH comes out or Rock Band, and you can see songs from artists on there, sprouting up out of nowhere. Idk how that guy is CEO of Warner if he doesn't understand that he's getting paid to advertise his label's music, and than getting even more revenue from people who become fans of the artists.

Fiotwo
Fiotwo

This was only a move by Warner to try and keep the top spot in regards to music vs games. They still want to be the dominant industry, and don't want to believe what video games can do and the fan base behind it.

RoboWizard
RoboWizard

I think most every gamer is on the same page here (judging from the comments). The people who developed and published these games are already taking a hit most companies can avoid by shelling out cash for licensing, and now Warner Music says it wants more money simply because it went through the trouble of saying, "yeah, we'll go dig up the master recordings and you can use them in your game (if even)"? One could argue that Warner should be paying Vivendi for all the promotion these bands are getting. What a joke.

missonrs
missonrs

I don't like activsion that much, but they deserve a pat on the back for this statment. kotick did the right thing. Those warner brothers got what they deserve.

sdkingsht
sdkingsht

next question Warner? when you try to be a bully on the playground make sure you're the biggest kid in the sandbox first.

Sheik_Yerbouti_
Sheik_Yerbouti_

"How much money is enough for the music labels?" I doubt any amount would satisfy these bloated institutions at this point. But as you pointed out, they're refusing to get with the times. In the end, it'll cost them much more than any minor losses from lower royalty fees.

ebonyflame
ebonyflame

Just another example of the music industry not getting with the times. There have been three instances of me buying music I have heard in a game which has resulted in me being a big fan of those artists and similar artists thus separating me from my hard earned money for new album sales on both iTunes and cd's. How much money is enough for the music labels?

ebonyflame
ebonyflame

Just another example of the music industry not getting with the times. There have been three instances of me buying music I have heard in a game which has resulted in me being a big fan of those artists and similar artists thus separating me from my hard earned money for new album sales on both iTunes and cd's. How much money is enough for the music labels?

MichaeltheCM
MichaeltheCM

and the fight begins/continues. glad to see that the gaming industry wont be pushed around so easily

vaejas
vaejas

@thibbledorfP: Your points are almost relevant but not quite on track. The crux of this story with Bronfman is specifically referring to rhythm games, where music is the CENTRAL part, not just a component as you say. Also it is not true that a musician hired to produce a game's music will automatically be paid more than a licensee. I guarantee you Led Zepplin will charge more for Kashmir than if you pulled a guy off YouTube to record some covers. The voice actor debate will carry on for as long as there is bad voice acting. But you cannot undervalue the voice of Niko Bellic for making GTA4 what it is. Imagine if that game was text-boxes only. The personality and character dripping from the radio, and the variety of Niko's nuanced conversations, take that game from whatever nebulous quality range we saw in the screenshots and nail it to the wall as an example for the next 4 years, in my opinion. GTA4 is Games as Cinema, not a deliberately cheesy fighter. The industry is too wide now to generalize. We can't talk about music or graphics or voices like everyone has the same budget or even the same goal.

conformist
conformist

If only someone from Napster had said this to Metallica.

SteveTwo
SteveTwo

Headshot! Winner, Kotic!

CharlieFubar
CharlieFubar

[This message was deleted at the request of the original poster]

cdodder
cdodder

JCDenton has it right on. This guy from Warner can go roll in his money and wish that it would make him cool.

clayron
clayron

Vivendi owns Universal......did not know that.

zintarr
zintarr

Slap the Warner CEO down!

RorshachV
RorshachV

This reminds me of the Godfather when the Don (clearly Vivendi) scolds Sonny (Warner) for being too greedy.

ps3thabest
ps3thabest

hahaha, o well it's a funny headline.

ps3thabest
ps3thabest

hahaha, o well it's a funny headline.

guppieface
guppieface

The record exec does not care about intangibles, he thinks of more money in royalties right now. i read something about the gibson guitar guy getting mad too, i guess they should have thought about making a game first. if they demanded the royalties before they licensed the products they wouldnt sound so greedy and annoying, but now that the games are successful they want more money.

arc_salvo
arc_salvo

Bobby Kotick's right. Without video games to help promote them, a lot of new artists and even existing artists wouldn't get the attention they'd need to be successful (or more successful in the case of established artists). I haven't played Guitar Hero yet, but I've gotten into artists I've never heard of before because their songs were in the Dance Dance Revolution games.

thibbledorfP
thibbledorfP

Musicians do not deserve more money than they are getting for letting games use their music. Music is one important factor in a game, but not the most important. Get real Warner. People play games for the gameplay, the desginers/programmers/writers who spend three years slaving away to make the game are the ones who deserve most of the money. You get decent royalties and publicity on top of that, that's enough. Musicians who develop music specifically for games, and professional voice actors, deserve more than licensing artists, but still they do not deserve most of the money. They deserve a good amount of money, but still the people who develop the actual game deserve most of it. What is even worse is when celebrity voice actors demand millions for lending their voice to a game. You sit down for two hours, give a few unenthusiastic lines, and then you think you deserve more money than designers who have been working 14hr days for 4 years. Bah.

JCDenton
JCDenton

Video Game = $60 GH3 has 73 tracks. At $1 a piece that brings us to $133 NOT INCLUDING THE GUITAR. Nice try Warner. Sit down, shut up, and count your money.

norabbitnofun
norabbitnofun

Fortunately, we have sensitive people at Activision-Blizzard. It will take quite some time until the technical costs are vastly outweighted by the cost to produce just the music, and even then there will still be special added value to the titles that make it on Guitar Hero or Rock Band.

MrQuest77
MrQuest77

nice to see someone in a position to respond actually do so

Smoov_B
Smoov_B

Warner is trying to make it sound like Apple makes any money off of iTunes. Labels take everything spent on iTunes. Apple makes money on iPods - not iTunes songs. Sounds to me like Warner wants the same kind of percentage from GH and RB.