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“Why the Music Industry Hates Guitar Hero”

“Why the Music Industry Hates Guitar Hero”. By Jeff Howe, Wired Magazine. Ryan Veerkamp Sergio Cirinas Neil Potter. Article Link. Overview. Current State of the Music Industry New Trend: Music Videogames Threat or Opportunity? Industry’s Reaction and Perspective

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“Why the Music Industry Hates Guitar Hero”

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  1. “Why the Music Industry Hates Guitar Hero” By Jeff Howe, Wired Magazine Ryan Veerkamp Sergio Cirinas Neil Potter Article Link

  2. Overview • Current State of the Music Industry • New Trend: Music Videogames • Threat or Opportunity? • Industry’s Reaction and Perspective • Positives for the Industry • What should Warner Do? • Past precedents

  3. Current State of the Music Industry • Album sales fell by 19 percent this past holiday season • ITunes number one music store, recently passing Wal-Mart • Industry still plagued by pirating

  4. New Trend: Music Videogames • Guitar Hero and Rock Band have made $2.3 billion over the past three years • Cultural phenomena: bars, karaoke, etc. • Three versions of Guitar Hero released • Good thing for the music industry?

  5. Industry’s Reaction • Whining over licensing fees • Games are entirely dependent on content the record labels own • Rock Band boycotting Warner Music/Artists • A fight that no one can win

  6. Industry’s Perspective • Warner Music believes that record labels have been ripped off too many times in the past • MTV sold in 1985 for $690 million on the strength of videos it received for free • Apple denied record labels control over pricing on ITunes

  7. Positives for the Industry • New channel for advertising • Consumers relate to bands and their music • Breathing new life into old bands • Aerosmith, has earned more from Guitar Hero: Aerosmith than any single album in the band’s history

  8. Positives for the Industry • Both record companies and retailers have seen sales of songs and groups increase 200 to 300% after their inclusion in Guitar Hero • 76% of people who play Guitar Hero actually buy music based on their video game play

  9. What Should Warner Do? • Push for more Warner titles and integrate them into promotional strategies • Music videogames could eventually become online music retail channel that could rival ITunes • Game for turntable artists, provide songs and let users mix their own versions, while Warner could sell back mixes to customers (Wii-Mix)

  10. Past Precedents • Music Industry needs to see this increase in popularity of music as an opportunity not a threat Threat Opportunity • Hollywood turned the VCR, a potential threat, into a revenue source, building customer loyalty in the process • Fought pirating vigorously instead of adapting to online outlets

  11. Conclusion • Whining over licensing fees is a fight that won’t be won • Fighting game makers will not solve the industry’s problems • Music videogames and their rising popularity should be treated by record labels as an opportunity and not a threat

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