Viacom chief wants to pay less for music in games

By | Published on Wednesday 17 February 2010

I think we all know that the rapid growth of the pretend-to-play games, like ‘Rock Star’ and ‘Guitar Hero’, that helped record companies earn some cash from the booming games market has peaked, and without transforming the music business in quite the way some predicted.

So, it’s perhaps no surprise that the gaming industry is now looking to reduce the costs of making future editions of such games, and of running the download stores that provide gamers with new tracks to pretend to play. This will be interesting, though, because that mainly involves negotiating lower rates with the record companies for using their music, and some label execs – Warner Music chief Edgar Bronfman Jr in particular – have previously said they feel the gaming companies have been underpaying for music to date.

Anyway, Viacom chief Philippe Duaman, who ultimately oversees ‘Rock Band’ through his company’s MTV Games and Harmonix divisions, last week told analysts that he hopes to pay less to the music industry for their involvement in the pretend-to-play franchise moving forward. Or, rather, he said that he was “looking to reduce the cost structure associated with ‘Rock Band’, being selective in the music titles that we choose for ‘Rock Band’ based on their cost – the music industry will assist with this category to make sure that it can continue on a profitable basis in the future”. But he meant what I said.

Moreover, you could infer that Duaman’s remarks are basically saying that if Bronfman Jr isn’t willing to do deals with the gaming firms at current or reduced rates – as he has indicated in the past – then Viacom don’t care, they will only do music deals when the terms are favourable. That sentiment may force the labels to accept cheaper deals. Especially as it increasingly seems Viacom’s rivals will be adopting a similar policy in future. Certainly ‘Guitar Hero’ publisher Activision expects to downsize its music-games release output this year.