Game, Music Industries Look To Beatles For 'Help!'

By: CNN
By: CNN

CNN) -- The fourth quarter of 2009 for the music and video game industries is shaping up to be all about the Beatles. And both could use some "Help!"

The band, which released its last full album of original music in 1970, is the focus of the simultaneous Wednesday release of "The Beatles: Rock Band" for the Rock Band video game franchise, as well as the digitally remastered box set of the Beatles 13-album discography by EMI. Analysts expect a spike in video game and CD sales, which have been declining through the year.

For audiophiles the release of the remastered CDs in mono and stereo is the first re-release of the Beatles catalogue since 1987.

"It's probably the biggest catalogue remaster that has ever happened," said Paul Bromby, EMI's senior marketing manager heading the re-release for the London-based company.

Given the state of CD sales, it may also be the last major event of its kind: Sales of CDs in the United States last year dropped 19 percent, according to entertainment market researcher the NDP Group, while purchases of digital downloads increased by 29 percent. Forrester Research estimates digital downloads will outstrip CD sales by 2012.

The remastered CDs are also a first step toward the Beatles catalogue eventual release for digital download. Allan Rouse, project coordinator on the reissue for EMI, told CNN the new masters are ready for digital download if and when EMI and Apple Corp. -- which represents surviving Beatles Paul McCartney and Ringo Star, and the estates of George Harrison and John Lennon -- make them available for release.

Still, the increase in the release of digital music -- which now accounts for a third of all sales, according to NDP -- isn't enough to make up for the total loss of sales. In 2008, there were 13 million fewer U.S. music buyers than the previous year. That is making video game releases by Rock Band and Guitar Hero, where players compete to strum in time on plastic guitars to original recordings, an increasingly important crossover player in the music industry.

"There's a lot of excitement (in the video game industry) because this is the first game since the Wii Fit that is aimed for a mass market," said Michael Pachter, a video game analyst for Wedbush Morgan Securities, who first tried his hand at The Beatles game with George Harrison's son, Dahni, at the E3 Expo, where the game debuted in June.

Like the Wii Fit -- an exercise-along Nintendo game that was a breakout hit since its global release in 2008 -- "The Beatles: Rock Band" is expected to attract game buyers beyond "hardcore gamers," Pachter said.

"Guitar Hero and Rock Band expanded gaming more to families, something that parents in their 40s could play along with their teenage girls," Pachter said. "But most of these compilations have bands that probably half the parents never heard of. Everyone knows the Beatles. You can't say that about many bands."

"The Beatles: Rock Band" will have 45 songs representing a cross-section of their career. Additional music from The Beatles catalogue will be made available for purchase and download including "Abbey Road," "Sgt. Pepper's Lonely Hearts Club Band" and "Rubber Soul," to be released in October, November and December, respectively -- giving a boost to the sale of Beatles songs through the end of the year.

Pachter estimates the video game will sell 5 million units globally by the end of the year, with prices ranging from more than $50 to $250 for a limited-edition package with Beatles guitar and drum set controllers.

Video games sales have dropped nearly 20 percent from last year. The Beatles release is expected to be a boon for music-based video games, which had U.S. revenues of $452 million the first half of this year, compared to $840 million during the same period last year, according to NDP.

Another industry closely watching the Beatles game release and the popularity of plastic fake guitars are the makers of real musical instruments. Sales of guitars exploded with the popularity of the Beatles in the 1960s. Will new Beatles fans via Rock Hero be inspired to buy the real thing?

While the guitar is still the most popular musical instrument, guitar sales in the U.S. -- which accounts for 42 percent of global sales -- dropped 6.6 percent to $1.6 billion last year, the largest drop in more than a decade, according to Music Trades.

"There has been some evidence of people crossing over to real guitars after playing the games, however, it's not large enough to be measurable," said Brian Majeski, editor of Music Trades.. "Most in the industry view it as a net positive -- making music is better than shooting bad guys."


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