Many music industry executives facing a CD sales slump love the sound of Guitar Hero and Rock Band.
The video games have millions of followers who memorize every note of songs so they can jam along -- and they often buy the original version of their favorites. In addition to the publicity, the record labels get licensing fees from the game publishers.
But not all music industry executives are singing "Hallelujah."
Edgar Bronfman Jr., chairman and chief executive of Warner Music Group, recently grumbled that the record labels deserved a bigger piece of the spoils from the games' success.
"The amount being paid to the industry, even though their games are entirely dependent on the content that we own and control, is far too small," he said during an Aug. 7 earnings call.
Bronfman suggested that he wanted Warner to be less a supplier than a partner. "If that does not become the case, as far as Warner Music is concerned, we will not license to those games," he said.
The recording industry has long complained that it doesn't receive its fair share of the proceeds from successful businesses built on music, such as MTV, the iPod and the iTunes store.
Apple Inc.'s products and MTV were "ecosystems [from which] people other than the recording industry have derived the majority of value created," Bronfman said.
Such tensions often arise when new business models sprout in the digital world, said Colin Sebastian, an analyst with Lazard Capital Markets.
"Music publishers see music-based games as a growth opportunity in an otherwise struggling music business, and they're trying to grab as much of that growth as they can," he said.
There is a lot of money at stake. Sales of music-themed games should hit $1.5 billion this year and grow as much as 35% next year, according to analysts' estimates.
But there are a lot of hands in the cookie jar, including those of game console makers such as Microsoft Corp. and Sony Corp.
Guitar Hero, which costs $50 to $100, is published by Santa Monica-based Activision Blizzard Inc. Since its debut in 2005, the game has sold 20 million copies and generated more than $1 billion in retail sales.
MTV Networks published Rock Band in 2007. The $170 game comes with a guitar controller, drum kit and microphone.
Both games involve mastering "playing" a song before moving to the next level.
