The music industry's inevitable battle with the videogame industry begins

When one media company comes out with a successful product that uses another media company's content, you can bet a fight over compensation is coming soon -- especially if the latter media company is a music label.

So just as the music industry went after MTV and peer-to-peer networks and streaming Internet sites and then YouTube, it's now after the videogame industry.

Thus we have Warner Music CEO Edgar Bronfman recently telling Reuters: ""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."

How did Activision Blizzard CEO Bobby Kotick, whose company publishes "Guitar Hero," respond? "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."

Take the word "games" out of Bronfman's statement and he could easily be talking about musicvideos on MTV or online, songs being used in YouTube clips, streaming Internet radio, etc. It was the same argument over and over. And Kotick's response, essentially that his products are helping to boost music sales by exposing artists to new audiences, is exactly how MTV and Internet companies always responded in the past.

It's worth remembering that the music industry has largely won in the past, either through corporate pressure or lawsuits. On the other hand, the music biz is in really dire straits these days and I think it's pretty undeniable that "Guitar Hero," "Rock Band," etc. are boosting downloads and album sales at least somewhat.

Nonetheless, music labels see a potentially lucrative source of revenue growth at a time when their traditional business is slumping and you can bet they'll be going after a bigger chunk of it aggressively. Especially with more music games coming out in the future ("Lips," "Ultimate Band," a million "Guitar Hero" spin-offs, etc.) you can bet this fight is only getting warmed up.