Bobby Kotick Responds To Warner Music

Activision CEO Bobby Kotick has fired back at Warner Music over recent comments by CEO Edgar Bronfman suggesting the videogame industry wasn’t paying enough for licensed music used in games like Guitar Hero and Rock Band.

Early in August, Bronfman claimed the royalties being paid to the music industry by videogame producers was “far too small,” particularly in light of the phenomenal success of games like Guitar Hero, which Bronfman said were “entirely dependent on the content we own and control.” He went on to threaten game publishers with the potential loss of licensed music from Warner if they didn’t pony up to his satisfaction.

But Kotick is apparently having none of it. Speaking to the Financial Times, he described Bronfman’s criticism as not “respectful to how much we’ve done to bring new audiences to the market.” He added that Activision had to invest significantly to make the songs “fun to play,” despite Bronfman’s statement that the games are “entirely dependent” on the music, and also pointed out that Warner is reaping benefits beyond simple royalty payments for the use of its music.

“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,” he said.

Warner Music appeared to take a step back from Bronfman’s confrontational statements, saying it had “enormous respect” for the contribution of the videogame industry to the development of music-based games. Typically, however, the company was unable to let the matter go without attempting to slip in the last word, adding, “We hope that our partners in the gaming space appreciate not only the value of their own contributions but also those of the recording artists, songwriters, record labels and music publishers on which their games are significantly based.”

Despite previous protestations, Bronfman’s bleating is evidence that the music industry – or at least his little piece of it – is still desperately holding on to the fading revenue models from pre-digital days. Setting aside for a moment the fact that Warner should honor the licensing deals it apparently had no problem signing when Activision first approached, Kotick is very correct to point out that the explosive popularity of games like Guitar Hero produce numerous intangible benefits for the music industry. And in this particular case, at least, Kotick can afford to take a hard line: While Bronfman’s Warner Music is the industry’s third-largest record label, Activision’s recent merger with Vivendi aligns them directly with Vivendi-owned Universal Music Group – the biggest in the world.