With the pandemic curtailing live performance and new acts scarce to emerge, listeners turning to classics by rock artists like Bob Dylan and Taylor Swift have fueled investor interest in song copyrights and catalogues.
Notable music sales in recent weeks include Dylan’s 600 songs for a figure said to be close to $400 million and the rights to the master recordings of the first six albums by Taylor Swift, arguably the most commercially popular artist today, which went to a private equity firm for $300 million.
“Investors see music royalties as a relatively safe, stable asset amid current market volatility,” reports the Wall Street Journal. “Low interest rates combined with an asset that produces yields largely untethered from the broader economy are making music an attractive investment.”
The volume of transactions for borrowing against, buying and selling music rights and royalty streams has taken off. It appears that David Bowie really was ahead of his time (see IP CloseUp). He was right about selling a portion of his future royalties in the 1990s, but wrong about the value of copyrights in the face of new technology. To his credit, he did not sell his copyright, only a portion of their projected cash flow.
Second Tier Success
Some important but less well known artists also have been able to cash in, too. Stevie Nicks recently sold a majority stake in her songwriting catalog for an estimated $80 million to Primary Wave Music, an independent publisher and marketing company, reports the New York Times. Hipgnosis Songs Fund, a British company that has made a rapid run in the market in just two and a half years, recently disclosed that it had spent about $670 million from March to September acquiring rights in more than 44,000 songs by Blondie, Rick James, Barry Manilow, Chrissie Hynde of the Pretenders and others.
Classic Over Contemporary
In a separate article WSJ states that pop music has become less popular amidst the pandemic as people, perhaps older adults, turn to classics, and touring has been halted.
An April study by by Nielsen/MRC found more than half of music consumers are opting for older music. Bob Dylan and Hank Williams Jr. —as well as country artists Garth Brooks, Kenny Chesney and Alan Jackson —are among those whose songs have seen an uptick in listeners. Bob Marley’s catalog alone jumped 23% in the three weeks through April 2 over the prior four weeks. (Who wouldn’t want to get together and feel alright?)
Music publishing covers copyrights for songwriting and composition, which are distinct from recordings and performances.
Music publishing covers copyrights for songwriting and composition, which are distinct from recordings and performances. Publishers and writers collect royalties and licensing fees any time their work is sold, streamed, broadcast on the (satellite) radio, performed or used in a movie or commercial. These rights are sometimes sold separately.
In addition to the businesses above, companies the invest in music rights, or that permit investors to invest in them, include Royalty Exchange, which allows smaller investments from individuals, and Sound Royalties.
The purchaser of Nobel Prize-winner, Bob Dylan’s catalogue was Universal Music Group, which owns some 15 labels, including Interscope Records, The Island Def Jam Group and MCA Records, Inc. Universal is owned by Vivendi, the French media conglomerate.
Image source: wsj.com; bbc.com