Record labels eye mobile music games

Three neon bars, a cascade of fast-moving dots, and a bumptious pop soundtrack, piped through an undersized speaker or a pair of headphones. That’s the spare formula behind Tap Tap Revenge, a video game for the iPhone and iPod touch, which has become in recent months one of the most popular applications ever distributed through Apple’s online iTunes store.

According to figures provided to the Monitor by Tapulous, the Palo Alto, Calif.-based creator of Tap Tap Revenge, the game has been downloaded by more than 6 million unique users. (Approximately 100,000 “paid” versions of “Tap Tap Revenge” have been sold, the company says.) It’s a stunning number for a relatively simple rhythm game – the gameplay is similar to that of the Guitar Hero and Rock Band franchises – and bodes well for the burgeoning mobile game market.

But more important, say many analysts, music games such as Tap Tap Revenge are a bow-tied, brightly colored gift to the ailing record industry, which has struggled in recent years to adapt to the realities of the digital landscape. Even as CD sales slump – the 2008 holiday season was the worst in recent memory – users have flocked to cheap or free downloadable mobile content.

For the savvy label executives, it’s a no-brainer: the relatively low cost of licensing music for a mobile platform is offset by the promise of tremendous media exposure. Tapulous, for instance, runs a weekly showcase, where gamers can download tracks free of charge from a new or established artist. If they like the material, they can click a link and buy the song from iTunes.

Tim O’Brien, head of business development at Tapulous pointed to a recent track by Katy Perry, the chart-topping American pop singer. More than 250,000 users loaded “Hot N Cold,” Mr. O’Brien says, and of that number, 56,000 ended up purchasing the song from iTunes.

Even if gamers don’t make a purchase, the reasoning goes, some modicum of brand recognition has already been achieved. Thus far, dozens of marquee acts have signed up, from the Kaiser Chiefs to geek-rock gods Weezer.

“There’s a big revenue stream here, certainly,” says Windsor Holden, the principal analyst at Juniper Research, a telecommunications firm that specializes in mobile technology. “Initially, labels were very, very wary of entering this space. There were issues of [digital rights management], and even then, the labels wanted such a cut of the revenue, that the [mobile] operators weren’t interested. Eventually, they came to realize that the mobile is a very attractive platform for their music.”

Last year, Juniper published a much-hyped report that estimated mobile content could drive revenue up to $47.5 billion by 2010. Dr. Holden now says the state of the global economy has tempered his original forecast, and that the mobile market might still be hit by a drop in discretionary spending. Still, he says, as the industry “moves away from simple ring tones, and towards applications, there’s an opportunity for some quite sophisticated mobile music games.”

One of the biggest catalysts here is Apple’s policy on external content for its iPod line and the iPhone. Whereas in the past phone companies and providers made it prohibitively expensive for companies to develop mobile content, Apple has opened its doors wide. Bart Decrem, the CEO of Tapulous, says that the cost of developing and distributing content for the Apple platforms is relatively low, and the potential payoff huge. “The friction is removed from the system,” Mr. Decrem says. “We can develop very sophisticated [applications] at a fraction of the cost it would take before.”

Kasson Crooker, a project leader at the Cambridge, Mass.-based video-game company Harmonix, says that there’s a “huge opening right now for developers. Bands and musicians have a whole new way of marketing their music, and fans enjoy music a lot more when they can interact with it. It’s a different level of appreciation.”

Harmonix, the creator of the original Guitar Hero and the Rock Band franchise, has also marketed a mobile music game called Phase, which is available for Apple’s Nano, Classic, and fifth generation iPods. (It cannot be downloaded to the iPod touch or iPhone.) Phase arrives with a suite of songs – including “Pop Music Is Not a Crime” by Freezepop – and allows users to add material from their own libraries.

One of the biggest acts to benefit from the surge in mobile music gaming is Anberlin, a popular alternative rock band from Winter Haven, Fla. In 2008, Tapulous made Anberlin anthem “The Feel Good Drag” available for Tap Tap Revenge. Thousands of fans eventually downloaded the track, and more than a few took to their blogs or YouTube to chronicle their achievements.

“It’s not just watching a video on TV, or hearing a tune on the radio,” says Nate Young, the drummer for Anberlin. “Fans become a part of the music by playing it. They get a more intense feeling for the song.”