A music-focused social network called iLike recently launched the iLike Challenge, a trivia game that asks users to identify tracks and compete with friends to earn points. The game’s interface makes it easy to purchase tracks while playing or add them to a wish list for later. ILike has also struck advertising deals with music labels, inserting certain artists’ songs into the game as paid promotions. During a panel at the Web conference South by Southwest Interactive in Texas last month, iLike CEO Ali Partovi noted that, though it’s hard to determine which promotions affect a song’s popularity, all of the songs promoted on iLike so far have debuted near the top of the charts on iTunes.
The makers of these games still have to strike licensing deals, a problematic reality for many online music businesses. Internet radio companies such as Pandora have struggled to get access to music for a rate they can afford. But games have a stronger bargaining position than Internet radio, according to Decrem, since they don’t need to license large quantities of music to create a worthwhile product. Radio stations usually need to have a deal with every major label and want to access most of those labels’ back catalog. Games, on the other hand, can get by with a few hits and a smaller catalog of quality songs from independent bands. Decrem says that Tapulous aims to include one big hit per month to help attract users, but already offers plenty of independent music and older songs. ILike pays licensing fees for the clips it uses in its trivia game, even though each song plays for no more than 30 seconds (Partovi said that, though it might be considered fair use, the company prefers not to take a risk).
While the games’ creators believe their impact on the music industry is positive, some observers say that the demand is not yet big enough to justify the optimism. Forrester analyst Sonal Gandhi, who follows the music industry, says that the impact of games on music sales is “dwarfed by the impact of radio.” Although radio has declined in recent years, she says that people still discover about 60 percent of the new songs they buy through the radio. Gandhi adds that licensing fees obtained via games will be an important source of revenue, but says games aren’t going to serve as the major way to promote artists in the near future.
That’s not what the many makers believe. They argue that games offer the advantages of radio and music-video channels, but can also be personalized for different users. “Games have the power to be the new MTV,” Partovi said at South by Southwest. “And I think that they already are.”