Rock Band & Guitar Hero Rocket Music Sales

Rock Band & Guitar Hero has fueled ailing music sales by raking in $2.3 billion in the last three years. This is a needed boost where holiday revenues from conventional music sales dropped 19 percent from the previous year.

Look at Aerosmith where they have acknowledged that sales from Guitar hero: Aerosmith has exceeded any single album sales in the band's history.

Despite of this ongoing trend, the Music industry wants more as they contend penny earnings from games. Warner music group CEO Edgar Bronfman has previously noted: "The amount being paid to the music industry, even though these games are entirely dependent on the content we own and control is far too small".

Paging Bronfman, your earnings may be too small but consider this, you didn't spend billions of dollars on R&D that rocketed console games to success. You are getting vertical earnings for spending nothing.

Maybe Bronfman is jealous with the NLF league who collects 30 percent of revenues from Electronic Arts Madden game.

History has it that Warner Music holds little control on their licenses. Apple calls the shot on iTunes, MTV runaway with $690 million dollars when it was sold leveraging the free videos they have in their inventory.

Bronfman instead of insisting on making traditional income from licenses should look into vertical markets and adopt to the changing landscape of the business. He could follow the footsteps of visionary Universal Music Group who quickly understood the landscape and instead of loathing over music licenses, went on and bought Activision, publisher of Guitar Hero.

Bronfman has started to fight more with licenses and royalty fees by making bands sign to 360-deals where the artists pay the label on everything they sell from ringtones, concert tickets, merchandise, etc. Is that vision sustainable? It would take years to see the effect of this move, and companies like Universal Music Group might take this chance to prepare and position themselves for better growth going into the future.

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