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Photo credit: http://bit.ly/1crjCq1

Photo credit: http://bit.ly/1crjCq1

As the music industry moves forward, revenue streams are expanding into territories we would never have imagined. The live show can now be streamed over the internet, music fans can listen to any song they want with streaming services like Spotify, lifestyle companies like Red Bull and Converse are getting into the record label business, and new publishing opportunities are popping up everyday.

One industry that just keeps growing is the gaming industry, and its presenting more and more opportunities for musicians. Rock Band and Guitar Hero really started the ball going for customizable game music, and since then, many platforms have been integrating in their own streaming or local music players. This definitely presents a great way forward for music. Integration with Spotify could mean more paying customers, and in-game purchases could evolve to include music packages. I really think this segment of the music industry is wide open for innovation.

Last week, Steam announced the beta of Steam Music. Check out the article below from Billboard for more information.

Steam, which passed its tenth birthday last year, operates as both an online marketplace and a media hub for video game players worldwide, keeping their game libraries in a central location and storing game information and their purchases in the cloud. Similar to iTunes with music, Steam makes money the same way, taking a 30% cut of purchases. That structure keeps Steam’s marketplace a click away and Valve’s brand ever-present. While most video games are too complex to be played without having their files stored on a local device, Steam users are able to install the client on a new computer and bring their software with them, along with save game files and similar information. As of last October, Valve put the number of Steam accounts at over 65 million.

As it stands now, Steam Music simply allows its users to listen to tracks from their local digital libraries while simultaneously playing video games — as long as they are in “Big Picture Mode,” a user interface designed to mimic the living room-based functionality of the Xbox and PlayStation’s operating systems. But what if the service integrated a streaming service like Spotify? The result could be a boon for that streaming service as well as music rightsholders; recent revenue gains in Norway’s music industry have been directly attributable to streaming services’ pervasive scale in that country, accounting for 65.3% of recorded music revenues and driving industry-wide growth.

But there are strong indications that Spotify could eventually arrive on Steam. Martin Benjamins, one of two people behind the website SteamDB, a website — unaffiliated with Valve or Steam — dedicated solely to investigating the underlying code of Steam and its attendant programs, found something interesting inside Steam’s guts. “Valve has already done quite a bit of work on Spotify integration in the Steam client, and appear to be using… Spotify’s official API for [placing] Spotify functionality into third party applications.” If you need a translation: Steam is already testing integration with Spotify into Steam Music. Benjamins says that it appears as if Spotify Premium users would be able to utilize the feature.” It’s important to note that, while such digital sleuthing is a worthwhile exercise, unreleased or unactivated code doesn’t mean that a feature will see the light of day.

Valve declined to comment on upcoming or requested features, and Spotify did not respond to a request for comment at press time.

Steam Music’s beta page does state that “we see an opportunity to broaden Steam as an entertainment platform, which includes music alongside games and other forms of media.” The company has taken significant steps to this end recently, developing SteamOS which allows users to all but replace their gaming consoles with a home-built computer intended to be always connected to the living room television, as well as Steam Machines, a prefab console intended to serve the same purpose.

Neither Xbox or the Playstation have a Spotify app available on their platforms, each preferring to push its own products — Sony’s paid Music Unlimited and Microsoft’s Xbox Music., which, like Spotify, offers a free and paid tiers.

As far as their plans to sell music, the company says, alluringly, on its site that “Steam currently offers a number of game soundtracks for sale. Your feedback will help guide where we take things next.” It’s also emblematic of a company well-respected by its customers, largely on how closely it listens to user feedback.

A quick glance at the Steam users online at the time of this writing showed 6.5 million — about 500,000 more than currently pay for a Spotify subscription. If 10% of Steam’s 65 million-strong user base subscribed to Spotify as a result of a trial or bundle deal, it would raise Spotify’s paid subscriber base by over 100%. Playing with games may just mean serious business for music.”

What do you think? Do video games present a huge opportunity for the music industry?

 

We discuss music placement in video games in the New Artist Model online course, but you can also get access to some free lessons by signing up for the mailing list

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.

Do you think gaming platforms are a good path forward for the music industry? Share your thoughts in the comment section below!