Gaming Consoles: A Path Forward for Music

Gaming platforms are not just for gaming anymore. More and more people are using platforms like Xbox and Playstation to access music. Increased competition for the top-selling game has pushed game developers to really focus on creating a great sound track. Game developers are licensing more music than ever before and now fans can even purchase the tracks from the game without ever leaving the console. In addition, game consoles are incorporating online streaming and other music services, allowing fans to listen to their music from the central point of most homes – the TV.

This article was originally published on Billboard by Alex Pham. Here’s a short excerpt explaining how gaming consoles stand to benefit the music industry and musicians.

This [surge in game console popularity and competition] matters to the music industry for three reasons, and all of them are good. The first is that these new devices represent absolute growth in the number of paths for digital music services to enter the living room.

“For content owners, this can be an opportunity,” Robert W. Baird & Co. analyst Colin Sebastian says. “These are exciting new platforms for music and other digitally delivered content.”

Companies like Vevo, Rhapsody, BandPage, Slacker and TuneIn have actively pursued distribution deals with over-the-top distribution services with the belief that to succeed, they need to go where the audience is.

Accessing music through a TV is no longer considered odd, especially since many living room TVs are often hooked up to the best audio system in the house. About 30% of Americans have listened this year to music through TVs that were connected to the Internet, either by game consoles or other means, according to a report by Edison Research.

Music services say consoles represent an opportunity to expand their footprint in the living room.

SoundCloud chief executive Alex Ljung points out that consoles have become one of the main routes to “smart” TVs, building a bridge for Internet services to the living room. “In some ways, game consoles were the first and still by far the largest user base for smart TVs. It’s a way to take a screen and connect it to the Web,” he says. “In that sense, the console enables us to get to the TV.”

The second reason why consoles matter lies in the calculation of royalties. Music delivered through ­Internet-based services has historically generated higher absolute royalties in aggregate than music delivered by cable and satellite TV companies. While per-stream rates established by the Copyright Royalty Board for cable, satellite and Internet conduits aren’t directly comparable to one another, it’s well-known that Pandora, an Internet-based service, is the largest single contributor to SoundExchange, which collects music royalties under statutory licensing. Should listening to Internet music on TVs in a home environment become as popular as mobile, rights holders stand to gain.

The third opportunity for music, albeit a smaller one than during the heyday of “Rock Band” and “Guitar Hero,” games themselves represent a vehicle for licensing and distribution. This year and next, a handful of titles will incorporate music as a central feature in their experiences, including Ubisoft Entertainment’s “Just Dance 2014” and “Rocksmith 2” and Harmonix’s “Fantasia.” As with movies, games require increasingly sophisticated scores and soundtracks, particularly for console titles that heavily emphasize cinematic environments and character development.

Perhaps the best source of licensing revenue this year will come from “Grand Theft Auto V,” which licensed 240 tracks and commissioned original songs from A$AP Rocky, Flying Lotus, Twin Shadow, Neon Indian, Yeasayer, OFF! and Tyler, the Creator, among others. The game, which has so far generated more than $1.3 billion in retail revenue since its release on Sept. 17, also features 15 in-game radio stations hosted by well-known DJs, including Bootsy Collins.

Inspired by the “GTA” radio feature, some streaming music providers including Rhapsody have explored the possibility of integrating their services into gaming worlds. Gamers spend about four hours per week on average playing, according to a 2012 survey by PricewaterhouseCoopers. Some even turn off the game’s sound to pipe in their own musical selections.

To read the full article, visit Billboard.com.

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