Tapulous partnering with labels for a new business model

iPhone games have gotten so hot so fast that traditional media is now partnering with the hottest of the bunch.

The super popular rythm title "Tap Tap Revenge," which was recently ranked as the #1 free game in Apple's app store, has garnered around 3 million downloads and over 100,000 active players per day. As Bart Decrem, CEO of publisher Tapulous, told me when we met earlier this week, it was originally a game from the "jailbroken" scene, where users hacked their iPhones to put in non-Apple approved applications. But Tapulous bought it, along with several other applications, once Apple came out with a legal store for distributing them in June. "Tap Tap Revenge" has since become not just the company's biggest hit, but it defining product (thus the corporate name).

The only revenue it's currently generating, however, comes from small ads on the bottom on the bottom of the screen (served to those who are online, which explains why people like me who only play on airplanes have never seen them). Tapulous has managed to add new song downloads for the game every week, but they've all come from artists/labels/publishers willing to provide their music purely for promotional purposes, for free.

But of course Tapulous needs more than little ads to build a business. It needs players to pay. Which means it needs better content. Which means it needs to start sharing revenue. And it needs to do all that without disrupting the free "Tap Tap Revenge" model that has proven so successful.

Decrem's solution is two spinoffs, both of which are being released this week. The first, "Tap Tap Dance" is a partnership with EMI that features ten dance tracks from the Chemical Brothers, Moby and others. The second is "Christmas with Weezer," which has six traditional Christmas songs recorded by the band, along with two "bonus tracks." They both feature the same basic gameplay as "Tap Tap Revenge," but with totally different graphics that match their content (the Weezer version also has a new, can't fail, "kids" setting). Both cost $4.99, with that money being divided between Apple, Tapulous, the labels and publishers.

It's a real sign of how much Apple's app store has grown, and how fast, that Tapulous is already in a position to sign deals with major labels and artists. The obvious choice would be to start charging for track downloads, as "Guitar Hero" and "Rock Band" do. But given how easy it is to produce these small mobile spin-offs, perhaps the "Guitar Hero: Aerosmith" model makes more sense, especially if there continue to be more bands willing to provide free tracks to the core game (an update to "Revenge" coming this winter will allow Tapulous to delete tracks after a while, thus encouraging labels to circulate them into the game for promotional windows).

If the spin-offs are a hit, it will demonstrate that Apple's app store is big enough to not only launch successful games, but successful brands. Which will make it an even more powerful force in the franchise-obsessed videogame biz.