Hitting all the Right Notes

More music-related musings from TW regular Rob Palmer, who’s been pondering the multimillion pound business of back catalogue sales… 

Sting has become the latest artist to sell his back catalogue, with Universal Music paying the former Police front man £220m. He joins a very large list of artists that are benefitting from a streaming-fuelled recovery for the music business.

David Bowie’s estate sold to Warner for $250m, Bruce Springsteen’s to Sony for $500m and Bob Dylan’s to Universal for $400m. The benefit for living artists (most are in their dotage), is the ability to cash in their intellectual rights and simplify their financial affairs, preventing their heirs from squabbling about the possible exploitation of the rights. By selling their catalogue while alive, it reduces any conflict over the distribution of the estate and obviates the need to allocate the music rights to the benefactors of their wills, who may be scattered all over the place.

The purchasers paying these eye-watering sums are doing so with the assumption they will be repaid several times over, following the increasing growth of digital music consumption. The ubiquitous Alexa is being asked, millions of times a day, and globally, to play these songs on demand, with Facebook, Instagram, YouTube and TikTok providing platforms for increased consumption.

It isn’t just the usual suspects within the music industry that are buying these rights; many private equity companies are spending billions, believing it will provide healthy returns long into the future. In the last four years, Hipgnosis, a public listed company, has spent over $2billion on rights catalogues, including the recent purchase of 50% of
Neil Young’s back catalogue for $150m.  

All these purchasers of back catalogues have recognised the revival of the music industry over recent years with a continual rise in profits from music rights since the advent of streaming. This recovery follows the widely predicted death of the music industry, following the demise of CD sales and the widespread illegal downloading. 

Industry experts suggest that the Covid-19 pandemic has contributed to the huge rise in streaming and vinyl sales, increasing the confidence that music rights are a safe long-term investment.

Much of the music being purchased was recorded up to 50 years ago. The durability of the music is borne out by the confidence that those paying these large sums believe they have at least another 50 years of being listened to.

I wonder which of today’s fledgling acts will be the recipients of millions of dollars for their body of work…?

Rob Palmer is the owner of Roan Records,

12 Church Road, Teddington TW11 8PB.


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