02 March 2009

How to Make Money from Music

Someone's managed:

it was recently revealed that rock gods Aerosmith have made more money off of their crummy co-branded version of Guitar Hero (I say crummy because reviews of the game have been lackluster) then they have on any album that the band has released to date. The revelation recently came from Activision chief executive Bobby Kotick and it unscores a number of really interesting points. First off, Guitar Hero: Aerosmith is nothing more than a "greatest hits" montage for the band, with a bunch of indy band songs sprinkled in for variety. Putting out the game cost Aerosmith nothing more than their signature, agreeing to allow Activision to use their music. Secondly, it proves the consumer is still interested in paying for music. They just don't want to buy CDs or single tracks anymore. They want interactivity, add-ons, special content and video games. According Microsoft gaming chief Robbie Bach, more than 60 million tracks were downloaded for Rockband, Guitar Hero and Lips over Xbox Live in 2008.

The second point is crucial: you've just got to offer stuff in the form that punters want. Is that so hard to understand for the music business?


Composing said...

Arguably ... if you cross-reference with what Shirky says ( http://www.shirky.com/weblog/2009/02/why-small-payments-wont-save-publishers/ ) about ringtones ... isn't the difference between Guitar Hero and CDs that Microsoft still control the distribution on the XBox? I'd guess you *can't* put a bunch of MP3s downloaded from the web directly into Rockband. If and when you can, that difference will vanish.

Glyn Moody said...

Indeed, and the corollary of that is that media companies could make money by handling the distribution of such content if they worked with rather than against the times.

Jamie said...

I think this is a sign of change evident in the world as we enter 21st century, and quite frankly, it's about time! Almost every other industry has had to diversify to integrate with and use technology to their gains, and music should be no different. Releasing albums and sitting waiting for royalties to roll in has been the business model since the 1950s.

Ozzy Osbourne recently commented that album sales and royalties don't really cut it for him, and he has to tour most of the year to make decent money. Fancy that, actually having to work for a living. Life's hard, hey Ozzy?

If popular consensus is to be believed, artists themselves don't make money out of album sales anyway, the record companies do (which is probably why they litigate filesharers so much). It appears artists make most of their money from touring and merchandise, and from sponsorship, endorsements and interviews, if they are sufficiently popular.

If not, they tour and record in their spare time, and work regular joe jobs like normal people. I know heaps of popular local artists who do labouring, run building businesses, or drive courier trucks, in between releasing albums and touring Australia, Europe and America.

Glyn Moody said...

Excellent points.

Anonymous said...

This isn't very serprising to be honest, although the band Aerosmith have sold millions of albums world wide, the game has obviously sold more because it's one of the most popular games with it's unique design.

Glyn Moody said...

still, it's a good example of what can be done.