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Analysis: Will Guitar Hero Save The Music Industry?
/ July 2, 2008 11:21 am

I’m the first to admit that the whole Guitar Hero thing took me off guard. Play music on a plastic toy guitar – come on! But then I went to Guitar Hero night at my local waterhole, Hyperion Tavern, in trendy Silver Lake (Thursdays for those of you that care, see picture to the right). It was so much fun that I was converted on the spot. Now in its third incarnation, Activision’s (NASD: ATVI) "Guitar Hero" game franchise is still the most popular entry in the music-based gaming genre that includes the newer hit "Rock Band" by Harmonix. Not only has the games sold millions of copies and is now available on other platforms such as mobile phones, the games have also become an invaluable marketing tools for bands (rock band Motley Crue was the first group to release a new single, "Saints of Los Angeles," for sale through the video game "Rock Band.") as well as increased interest in real guitar playing. And the trend of interactive music games that Guitar Hero started is just in its infancy.

Embedded below is a review of the new Guitar Hero Aerosmith edition and on October 27 Activision will release Guitar Hero IV.


Then we have Guitar Hero Metallica edition due in stores in early 2009. Activision has also affirmed plans to extend its Guitar Hero franchise beyond the guitar and bass to other instruments, a la rival music-based game Rock Band. And the competition has taken notice. MTV Games (NYSE: VIA) and Harmonix studio has announced that Rock Band 2, the sequel to their multimillion unit-selling music game with vocal, guitar and drum accessories, will be released to retailers in September. Then there is "Ultimate Band" which is a tweak on the format for the Nintendo Wii with a full-band concept aimed at kids and won’t require plastic instruments. To be released later this year. Then we have "Guitar Rising" which is said to combine the game play of Guitar Hero with actual guitar playing.

The link between virtual and real guitar playing is particularly noteworthy. Not only do these games open up new marketing opportunities for musicians, they open up an important virtual point of sales for the digital music industry (which is why the game publishers now are starting record labels) as well as drive sales of merchandise and real musical instruments (read yesterday’s article about how U.K. record company revenues outside direct sales of music – such as licensing, and other areas outside the recording copyright – increased by 13.8% to $242 million in 2007).

The gaming experience takes the music medium from being something that is passively enjoyed to something that is actively enjoyed as well as allow a merger between the recorded music experience with the live music experience (and the game console, the TV and the stereo).All of a sudden, the Millennial generation is provided with a 360 music entertainment experience that is compatible with their digital lifestyle.

Think about where the music industry would be today if they spent their time supporting innovative new interactive music experiences like Guitar Hero instead of messing around with "protecting" CD-sales, DRM and suing kids? But I can’t say that I blame them all together, the Guitar Hero phenomenon took me off guard too, but at least I just needed one night at Hyperion Tavern to come around. I believe that the music industry (at least parts of it) is still not being experimental enough with licensing music to creative new media outlets and coming up with new ways of monetizing music. I’m sure that there are many more Guitar Hero phenomenon out there waiting to be discovered so that the music industry can be a flourishing one again…

Jay Baage

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