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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

Hit games like Guitar Hero and Rock Band are creating a subtle put profound shift in the way music is experienced, heard, interacted with and purchased. In these environments music is not listened to passively, it becomes an immersive and engaging experience that is changing the nature of the relationship between the hard-core fan and the artist, pulling them closer together in ways that have never been done before.

In the past six months, the number of songs downloaded to the “Rock Band” game has surpassed 10 million tracks, according to MTV Networks, while song downloads from “Guitar Hero” passed 15 million, according to Activision. With more than 100 songs available for download via the “Rock Band” platform, that’s an average of 100,000 downloads per song sold through the game.

The songs that are selling via these video games are a heavy mix of classic rock and metal tracks that account for approximately 80% of sales, but also include new tracks by known and unknown artists trying to break new ground. One example is new metal act Black Tide. When its “Light From Above” CD was released in November, the single “Shockwave” sold only a few hundred copies per week.. The week before being featured as a downloadable song on “Rock Band”, the single sold 1,000 downloads. Two weeks later, download sales doubled. Yet sales on “Rock Band” were 10 times that of those on iTunes and other stores. In the six weeks following the “Rock Band” debut, “Shockwave” sold 6,000 digital downloads via online retailers, compared with an estimated 60,000 downloads via the game.

This is just one example of the way that music is finding new ways to reach an audience – with or without record labels – rising to fill the opportunity. Keep your eyes on the video game space to see how it evolves further as a catalyst for music exploration, discovery and distribution.

Check out this Wikipedia page on the songs available in Rock Band.