August 15, 2008 1:16 am

Warner chief slammed in ‘Guitar Hero’ row

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The chief executive of the company behind the Guitar Hero video game franchise has hit out at Warner Music after the label said higher royalties should be paid for use of its songs.

In a sign of increasing tensions between the two companies, Robert Kotick, chief executive of Activision Blizzard, said Warner Music had failed to acknowledge the benefits to music sales from Guitar Hero . The game has sold close to 20m units and generated $1bn in revenues but has also boosted sales of the artists it features.

Mr Kotick told the Financial Times that Edgar Bronfman, Warner Music’s chief executive, had made “one-sided comments” that were not “respectful of how much we’ve done to bring new audiences into the market”.

Mr Bronfman said last week that the amount being paid to the music industry from music-based games was “far too small”. But Mr Kotick said Activison had to invest “capital and resources” in its games to make the songs “fun to play”.

“I think his view was ... that [Warner Music] should be compensated the way they might for a performance on iTunes,” said Mr Kotick. “But this is an entirely different business that is very technically complex. We’re going to favour those publishers that recognise and appreciate how much we can add value to their artists.”

Activision recently merged with Vivendi’s games unit. Vivendi owns Universal Music, the world’s largest music publisher.

Mr Kotick said there was a direct link between artists featured in Guitar Hero and sales of their music. “We’re introducing a whole new group of artists to new audiences that is resulting in their iTunes downloads being exponentially higher than they would otherwise be, [as well as] new album sales and new merchandising opportunities.”

Guitar Hero has spawned two sequels and an Aerosmith spin-off but Mr Kotick also revealed a desire to see the music of Led Zeppelin added to the game. “Their music would really appeal to this new generation,” he said.

Activision moved from Silicon Valley to Santa Monica several years ago with the aim of tapping into Hollywood’s creative talent. Mr Kotick said he expected future video games to take on “some of the characteristics of linear media ... the production values will get higher, the storylines will become more important”.

A Warner Music spokesman said the company had “enormous respect” for the investment and creativity game-publishers had brought to the music-gaming business.

He added: “We hope that our partners in the gaming space appreciate not only the value of their own contributions but also those of the recording artists, songwriters, record labels and music publishers on which their games are significantly based.”

Additional reporting by Andrew Edgecliff-Johnson

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