Activision’s stance on royalties may have caused The Beatles to go with Harmonix

Back in August, Warner Music CEO Edgar Bronfman lashed out at the videogame industry, saying that the royalties being paid to record companies for the use of their music in games like Guitar Hero and Rock Band were “far too small.” Activision CEO Bobby Kotick retaliated in September by claiming just the opposite. His argument was that because these games offer a brand new way for people to experience an artist’s music, if any money is going to change hands, it should be the videogame publishers and developers who get paid.

Now there’s word from Reuters that Activision’s stance may have caused the companies who control The Beatles’ recordings — Apple Corps, Sony/ATV, and EMI — to choose Harmonix and MTV to develop the upcoming Beatles-exclusive videogame that was announced last week. The specific terms of the deal (i.e., how much MTV/Harmonix shelled out) haven’t been discussed, but Reuters’ sources “hinted” that Activision’s inflexibility regarding royalties — namely, that the music industry should be paying them for the right to be included in Guitar Hero — helped make the decision to go with MTV/Harmonix easier:

“It was presented as if they were doing the music business a favor,” Sony/ATV CEO Martin Bandier said. “It’s true you can choose other types of music, and somewhere along the line someone’s going to do it for free for the exposure … When it comes to the Beatles, the leverage changes. We’re very happy with the terms of our arrangement with MTV.”

Apple Corps CEO Jeff Jones also noted last week during the conference call announcing the deal that “MTV was clearly the innovator in offering a full-band experience.” Frankly, I was happy to find out that MTV and Harmonix will be the people behind the exclusive Beatles game, but that excitement was tempered by the revelation that the songs may not ever be usable outside of that title (i.e., in Rock Band). Still, it seems to me that Activision should’ve realized they’d have to pay up — and in a big way — to score The Beatles’ music for an exclusive game. What say you, Dtoiders?

[Via Reuters by way of Gamasutra — thanks, Jonathan!]