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By Todd Gascon with Bruce Kaphan

Chapter 16: licensing music for video games
Over the past several years the computer and video game industry has changed dramatically. In a recent report published by the Entertainment Software Association (Siwek, Stephen E., Video Games in the 21st Century: The 2010 Report, Entertainment Software Association (2010)), U.S. sales of computer and video games have grown from $7 billion in 2005 to well over $10 billion in 2009. Unfortunately, the music industry has not been so fortunate. In 2009, the total revenue from U.S. music sales and licensing plunged to $6.3 billion, according to a recent report published by Forrester Research. This is less than half of the revenue earned by the music industry ten years ago! Given the recent growth in the sales of computer and video games, there are more opportunities today for independent artists to license their music for computer and video games. This is particularly true given the popularity of multi-player online games, social gaming and the emerging mobile market (i.e., apps sold for Apple and Android handsets). This article will provide you with an overview of the key terms in a license agreement when your music is used in a video game. Opportunities Before we begin, you may be thinking that popular video games are out of reach for an unsigned artist. While a majority of music placements in “A-title” games have been reserved for commercially successful artists, there are an increasing number of opportunities for independents. Take the Rock Band franchise as an example. Many of you may recall that some “legacy artists” released new recordings via Rock Band (e.g., “Shackler’s Revenge” by Guns n’ Roses and an alternate version of “Working Man” by Rush). However, there were also a number of independent artists whose music was not included in Rock Band but available in Rock Band song packs: previously released recordings specifically compiled for use in the Rock Band video game that a user could purchase and download. As we discussed in the last installment of It’s Your Music: Know Your Rights, when a third party wants to license pre-recorded music in an audiovisual work they will need to enter into two separate contracts— one contract for the song (called a “synchronization license”) and a second contract for the recording of said song (called a “master use license”). Although these contracts deal with two different copyrights, for purposes of this article we will focus on the synchronization license, as its key terms are also found in a master use license agreement. What to know (a) What is the term? When the video game industry was beginning (think video game publishers Activision, Atari, Electronic Arts, Lucas Arts, Microsoft, Nintendo, Sega and Sony), it wasn’t uncommon to
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have a license period of 3, 5 or 7 years, as it wasn’t clear how popular a game might become. When some games became very popular, software publishers found out that the licenses for outside music would expire unless the license agreement was extended or new music was licensed. As a result, in order to continue to use the music the license term had to be extended. Today, the term is often in perpetuity (forever), which is consistent with the licensing of music for motion pictures and television shows. (b) What is the scope of the license? One of the best ways to answer this question is to ask a fundamental question—how will the music be used in the video game? The use of music in video games varies wildly and is dependent upon the nature of the game. In the beginning, music was typically used in the background and was not thought of during the development of the game itself. This background use has expanded over time so that the user has some control as to what he or she hears. One unique way music has been used in a background context is in Grand Theft Auto. Activision, the software publisher of the Grand Theft Auto franchise, enhanced the game experience through the use of “radio stations”. For those of you who have not played this game, the player is given a variety of missions from the head of an organized crime family. In order to progress to higher levels in the game the user must complete these missions. While driving around in a fictional city, the user can select a radio station to listen to while committing various acts of carnage and mayhem. Surprisingly, the music on the radio stations is quite broad and covers a variety of music genres. Even if you haven’t played one of the Grand Theft Auto games, you get an understanding from the description above that the game experience is central and the music is secondary. As you might suspect, there are a number of games where this isn’t true and the music is an integral part of the gaming experience. The most recent example would be the Guitar Hero and Rock Band series. Given the importance of the song, fees for the use of music in a music-oriented game will require a higher fee as the gaming experience is focused on playing the song. (c) What is the format? Similar to licensing music for a motion picture, one of the provisions in the license agreement to pay attention to is the format provision. Assuming the video game is not the exclusive property of a software publisher (think Halo for Microsoft’s Xbox); the company will request rights for all of the current gaming platforms (i.e., Microsoft Xbox 360, Sony Playstation, Nintendo Wii, Sony PSP, and Nintendo DS). In addition, they will also require all computing platforms (e.g., desktop, laptop, net books) as well as digital downloads and “all formats now known or hereafter developed”. The ability to license the video game is extremely important, as new technologies are continuing to be developed which now includes tablets.

Recording - July 2011

Table of Contents for the Digital Edition of Recording - July 2011