So, something interesting happened in 2023 in the global music industry:
- Justin Bieber agreed to a $200-million deal that would transfer ownership of his music to Hipgnosis Song Management, a Blackstone-backed investment company. He sold to Hipgnosis his share of the master recordings, publishing copyrights and neighbouring rights for his complete back catalogue. The deal includes over 290 titles released by the end of 2021.
- Justin Timberlake and Shakira also recently sold majority stakes in their IP library, to Hipgnosis.
Further, in 2022, the following IP-rights sales happened:
- Sony Music Entertainment bought Bruce Springsteen’s entire catalogue for an incredible $550 million.
- Universal Music purchased Bob Dylan’s entire songwriting catalogue of more than 600 songs in a deal estimated at more than $300 million.
- Singer and songwriter Stevie Nicks sold her music catalogue to Primary Wave Music for $100 million.
- Tina Turner sold her music rights to BMG for $100 million.
- OneRepublic’s Ryan Tedder sold his music catalogue to investment company KKR for $200 million.
- Sting, Paul Simon, Motley Crue, The Red Hot Chili Peppers the estates of David Bowie and Leonard Cohen have also sold their entire IP libraries.
While most of these artists are legacy artists and not really putting out significant new content so I can understand them wanting to cash out their IP while the demand is high, someone like Bieber is still very active and will definitely have many more songs & albums coming out in the future. So do Timberlake & Shakira.
So why are all these bulk sales happening?
In my opinion, it is because of 3 things:
- the streaming market has really picked up globally with Spotify, Amazon Music, YouTube Music, Apple Music and hundreds of country-specific platforms which are able to put up serious cash as well as generate decent revshare through SAOD and AAOD models. Music is being treated as a product as, with the advent of subscription-based-streaming models, it’s easier to make financial projections on a catalog based on the probability of streaming revenues.
- The movie Bohemian Rhapsody revitalised interest in Queen for a whole new generation. I’m sure the same happened with Whitney Houston’s music after ‘I Wanna Dance with somebody’ (though not as much in India). The same is also potentially possible for many such legacy artists whose lives are ripe for biographies. This will ensure continuing royalties even after the generations of the original-fans of their music have passed on.
- the spectrum (and hence monetisation) of where music is being used has widened significantly – with Fitness Apps, Gaming, Instagram, TikTok and hundreds of such platforms across the world where creators are able to lay music under the video or image content they create / post. And these are only going to grow.
Because of all these, serious funds are getting interested in owning these IPs as they see long tail monetisation for them.
Every artist is not going the same way though.
Taylor Swift is actually going the other way. She has dropped her regular label from her next 6 albums and will be recording, publishing, marketing & monetising them herself.
With her SUPER-SUCCESSFUL Eras Tour and then the movie thereafter, she probably wants to build a label around herself and then eventually acquire / syndicate content from other artists and generate enough critical mass to become a label herself and move further up the business pipeline of the music industry.
It has been done in the past by other artists and it would be interesting to see how Taylor Swift does. If she is able to pull it off (and there are no indications to the contrary as of now), it will be a case study worth documenting in the Music business world.
It would also be interesting to see how annual royalties for catalogues go up over the next decade and how this evolving situation changes the music industry. I have a feeling, it will enable the industry to grow significantly, which is much needed as it recovers from decades of piracy-affected losses.