Vivendi games licence income staunches UMG losses

This blog has previously noted the potentially positive impact of video game licensing for owners of music copyright portfolios. Today's Telegraph contains a further example when it reports that rising income from video games has offset declining music sales at entertainment group Vivendi, according to its second quarter reporting. This has given it the opportunity to cancel what seemed an inevitable rights issue. Vivendi, which controls the works of artists such as Amy Winehouse and the Rolling Stones through its Universal Music Group, showed a 5.3% fall in recordings sales, but its Vivendi Games, mobile phone operator SFR and France's Canal Plus divisions all recorded sales increases over the same period.

Warner threatens to say "no" to games makers

The Financial Times ("Warner Music aims for video game royalties", by Andrew Edgecliffe-Johnson, New York) reports on the efforts being made by Warner Music to extract higher royalties from video games like Guitar Hero and Rock Star, as record labels and music publishers seek to avoid repeating mistakes made when MTV and the iPod came out. Warner CEO Edgar Bronfman is quoted as saying:

"The amount being paid to the music industry, even though their games are entirely dependent on the content we own and control, is far too small".

He made it plain that Warner would simply refuse to license its music to video games if royalty rates remained far below what Warner believes to be their true value.

The interesting question is whether Warner will keep its nerve, and its resolve, if other owners of music copyright portfolios seek to fill the vacuum at rates that may well be a good deal lower than those sought by Warner but still worth collecting in the hope that they may prove to be a springboard to a stronger relationship with the games makers