Another Ray of Hope for Record Companies & Artists

What we know about the record business is this: the legal digital download market, while growing, is not growing fast enough to negate or offset either the downward turn in CD sales or the illegal downloading market.  Labels are in deep trouble.

And while the labels are now busy making all their tracks DRM-free for certain online retail partners such as Amazon, it's ironic that two of the industry's new cash cows relies on closed systems: the popular video games Rock Star and Guitar Hero.  Both games offer the user the abvility to upload additional tracks to the game... and the results are phenomenal:

In the two months since MTV Networks and Harmonix released the music-based videogame "Rock Band," players have purchased and downloaded more than 2.5 million additional songs made available after the game's initial distribution.

Activision, meanwhile, said it has sold more than 5 million new songs via download for "Guitar Hero III: Legends of Rock" since it began adding downloadable content in early November.

Now Aerosmith has upped the ante for artist involvement amidst this robust environment for interactive music video games.  My question is why every other major guitar-centric rock band of the past 4 decades isn't doing the exact same thing?  Led Zeppelin.  Lynyrd Skynyrd.  Black Sabbath.  KISS.  Bon Jovi.  Ozzy Osbourne.  Etc...

It's so typical that a band which specializes in resurrecting its career over and over again gets the big picture - an artist's masters and copyrights are assets, and those assets need to provide continuous income or lose value.  And why have one's tracks appear on Guitar Hero via generic game characters when they could appear with the band's own iconic images and patented stage moves?  THIS is how a band introduces new generations of fans to its music while not alienating core, older fans.  And THIS is how to initiate and execute a brand extension properly.  This partnership doesn't mess with the soul of the band or the brand.  It enhances both (as opposed to, licensing "Dream On" for a Buick TV commercial after doing a killer automotive deal with Dodge just a few years earlier).

These games are important to the industry not only because of the obvious licensing revenue and digital track upload potential, but because the downloads take place via a closed system; the tracks work on the games, not your mobile device or digital library/service of choice.  No free downloads here.  This is mostly good news, but it also means the labels are going to look at this and say: "Instead of releasing new music or licensing our catalogs via the Internet, we will now seek to also develop solid revenue streams via closed systems where we have more control, and consumers need to buy music to obtain it."