Electronic Games Boost Licensing Revenue

Facing an industry-wide decline in mechanical royalties, music publishers and songwriters are increasingly turning to a new revenue source—videogames.

Original and licensed music from emerging and established acts "can command from $800 to $1,200 a minute, with a typical game using from 20 to 90 minutes," says Bob Rice, chief executive of Four Bars Intertainment.

Rice participated in the "Writing Music for Games" seminar sponsored by the Society of Composers & Lyricists (SCL) during last month's Electronic Entertainment Expo in Los Angeles.

"Once you're 'in' the medium, a composer can earn $250,000 or more a year from games," Rice says.

Richard Stumpf, VP for marketing and licensing at Cherry Lane Music Publishing, says most gaming companies traditionally look for a flat-fee buyout that can range from $1,500 for a song from a new artist to $20,000 for six songs from Elvis Presley.

"With some games selling up to 5 million or more copies, we've been pushing hard for royalties and advances, and we did work a royalty deal with Sony Computer Entertainment for its multi-artist PlayStation 2 game Frequency," he says.

Cherry Lane's game placements are with such leading developers as Electronic Arts (EA), Activision, Konami, THQ, Midway, and Buena Vista Games (formerly Disney Interactive).

They involve contemporary artists and draw primarily on partnerships with DreamWorks Publishing and World Wrestling Entertainment.

Cherry Lane and DreamWorks have a license out for Logan 7 tracks for EA's NHL 2004, and quotes are out for Powerman 5000 tracks on EA's NASCAR Thunder 2004 and NFL Gameday 2004. They are also seeking a Dr. Octagon track for Activision's Tony Hawk's Underground, among others.

But integrating music into games can be challenging, game music producer Eric Lundborg notes.

Lundborg worked on the Atari Enter the Matrix title that was released simultaneously with the Matrix Reloaded movie. "The game music had to merge seamlessly with the action movie footage," Lundborg says. "And we had to complete three hours of music in a very short time."

Rice points to Steven Spielberg's observation that music and sound represent 50% of the value of all his films: "Music is equally important to games associated with those films," he says.

Russ Brower, an audio director and composer at Novalogic, says two to three hours of game music can be used to create a 45-minute-plus CD as a pre-order bonus, a gift with purchase and for sale.

"If we can work more of these into the business plan, music can subsidize itself, and once the game is successful, a 'special-edition' release can include a bonus CD soundtrack," says Brower, who also was an SCL panelist.

Clearly, then, publishers and composers are in the videogame business.

"We are taking that responsibility [for original game music]—and it's our future," Rice says. "We will have a platinum-selling soundtrack of original game music within two years."

Greg O'Connor-Read, founder of the music4games.net Web service and an SCL moderator, says the American Federation of Musicians L.A. chapter's landmark videogame contract was used for the first time, involving 84 members of the Hollywood Studio Symphony. They signed for EA's new Medal of Honor: Rising Sun soundtrack.

Stumpf says, "We're actively seeking support within the publishing community to hold strong for [game] royalties and advances. We anticipate that gaming revenues will continue to rise for our clients."