Video Games Negotiations 101

"Video games are poised to eclipse all other forms of entertainment in the decade ahead.”

So said Activision President and CEO Mike Griffith during his 2009 Consumer Electronics Show keynote speech in Las Vegas. He cited market statistics showing that between 2003 and 2007, the cumulative number of movie ticket sales and hours of television watched fell by 6%, music sales fell 12% and DVD purchases remained flat. Over the same four-year period, the gaming business grew by 40%.

Unequivocally, video games are a new element in the recording marketplace. In response, the AFM has come out with another sparse video game agreement, with the usual lack of input from affected musicians, and the usual gaping holes in basic protections. For example, from page 2 of the agreement, on use-and-reuse: the work of professional recording musicians may be used "in any new medium with no additional payment obligations."

Dave Pomeroy, the President of Local 257 Nashville, wrote a calm and measured letter revealing the AFM's closed-door policy of avoidance in creating the agreement. Sam Folio responded* in a hostile fashion; his centerpiece argument was that "Pomeroy, who represents himself as chair of the RMA Video Game recording session has provided no evidence that he has ever played on a video game recording session."

Mr. Folio, how many video games have you played on? What about Tom Lee? Skolnik? Parente, McGrew, Hair, Price, or Linneman? Our IEB, along with negotiators, fact finders and others, ran the gamut from the experienced recording musician Vice-President Bradley, to the non-musician Shaffner, but none of them have the experience that Sam Folio deems necessary.

Tom Lee's administration says his new naked video game agreement is necessary to capture work that otherwise would go elsewhere. But this claim is totally speculative. Why should our musicians give away real compensation for Tom Lee's promise of increased work in the future?

How do we know that the use-and-reuse funds are "real compensation?" Well, Tom Lee knows that use-and-reuse can turn into a lot of money. He and his IEB are now engaged in begging musicians who received over $82,000,000 last year alone from the Film Musicians Secondary Markets Fund to volunteer a share of it. That is use-and-reuse compensation. Musicians are entitled to it, and the industry will pay it.

So why was use-and-reuse specifically omitted in the video game agreement, even though Tom Lee knows it means that musicians are giving up real compensation for his speculative promise of more work in the future? Whether it's incompetence or something worse, Tom Lee has given away the store.

All of this comes on the eve of a hearing on the AFM's motion for summary judgment in the Parmeter case. Initial reports suggest that the hearing seemed to go better for the AFM than the plaintiff musicians. If the AFM prevails, Tom Lee's power grab will be anointed and he will become uncontrollable and dangerous to all. We await the judge's decision.

* Dave Pomeroy later clarified the sourcing of his letter, and noted that what the Committee called "Sam Folio's response" was actually originally written and signed by Tom Lee himself.