Paul Simon performs on stage during The Nearness Of You Benefit Concert at Frederick P. Rose Hall, Jazz at Lincoln Center on January 20, 2015 in New York City.
Ilya S. Savinok | Getty Images Entertainment | Getty Images
From Bob Dylan plugging his electric guitar for the first time to Super Bowl commercials, there have always been moments in music history when most diehard fans accuse their idols of doing the unthinkable: selling. But at the moment “selling” has a new connotation, and it is a thriving market for both prominent investors and recording artists.
A wave of rock boomer icons being sold from their song catalogs. Moves triggered by Paul Simon Last week, I pointed to an obvious truth about the intersection of art and money: music has always been a business, where a creative genius deserves to be rewarded with riches. It is a company that is currently experiencing big changes from the flow, and more disruptions caused by the epidemic. Offers from Paul Simon, Bob DylanNeil Young (in Young’s case 50% share(And Stevie Nicks)80% of the rights to her songs), Highlighting key trends in the entertainment industry, capital markets and wealth management.
Music publishing companies like Hipgnosis Songs Fund and Primary Wave Music and block players like BMG, SonyAnd Warner Music Group And VivendiUniversal Music Group’s subsidiary Universal Music is buying catalogs of first songs in big deals fueled by record low interest rates with the belief that there will be more lucrative returns in the future from selling the rights to these songs via entertainment platforms.
Larry Mistel, CEO of Primary Wave Music, the company that just acquired a majority stake in the Rock and Roll Hall of Fame recruiter catalog twice, Stevie Nicks, told CNBC that the economic environment created by the coronavirus pandemic has worked for the benefit of companies looking to Buy big assets. these Low interest rate It made borrowing money easier, and the higher rates of return created the perfect opportunity for acquirers.
“You’re talking about a low interest rate environment and you can achieve 7% to 9% … then increase it through marketing and making returns in their mid-teens. This is a very attractive place for people to put money in,” she said.
Music catalogs have also proven to be recession-proof, and the pandemic has only increased the volume of deals being made as the music industry goes through massive turmoil brought on by the lockdowns of live venues and tours.
The deals also come at a time when streaming music – despite all the controversy and skepticism on the part of musicians themselves about getting a raw deal – has proven to be an overwhelming economic powerhouse, at least for the record companies. In 2020, Goldman Sachs forecast That global music revenue will reach $ 142 billion by the end of the decade, reflecting an increase of 84% compared to the 2019 level of $ 77 billion, and broadcasting will have 1.2 billion users by 2030, four times its level in 2019, mainly benefiting from Companies like Sony, which bought Simon’s catalog, and Universal, which acquired Dylan’s songs.
Global streaming music revenue reached an all-time high as a percentage of the industry last year (83% according to a recent report) And she prefers stars, too. Spotify he said to her Task It is “giving one million creative artists the opportunity to live off their art,” but as a newer one New York Times analysis Note that Spotify data only shows around 13,000 It generated $ 50,000 or more In the last year payments.
It’s not just a stream, though. Once acquired, the rights to larger business catalogs can be used in sync placements that license music across various forms of media, including movies, TV shows, ads and video games.
“From a publisher’s point of view, it is extremely important to have the rights to a specific catalog that we can offer for sync,” said Rebecca Valice, Copyright and Licensing Director at PEN Music Group. “The catalog can only make its own promotion because of its legendary success.”
The more recognizable the catalog, the more valuable companies will buy and use in movies or television. She says the best catalogs “pay for themselves” over time, with synchronization helping to recover the money the acquirers have spent “and then some over time.”
“I think icons and myths are more valuable than other artists,” said Mistel. Primary Wave owns the catalogs of stars such as Whitney Houston, Ray Charles, Frankie Valley and the Four Seasons.
Some famous boom-age musicians have criticized the situation the industry put them in, such as David Crosby, who said in a tweet in December, “I’m selling myself too … I can’t work … and the live broadcast stole my record money … I have a family and a mortgage … And I have to take care of them, so it’s my only option … I’m sure other people feel the same. “
he is He sold his entire catalog To Iconic Artists Group of Irving Azoff in March, which also recently acquired a controlling stake in Beach Boys intellectual property, including part of song catalog.
“Given our current inability to work directly, this deal is a blessing for me and my family, and I think these are the best people who can do that,” Crosby said in a statement announcing the deal.
For the musicians themselves, there’s a tremendous trend at work: the estate planning needs of the richest generation in America. Boomer’s musicians (and those born on the cusp of that generation like Simon and Dylan in 1941), just like their fans, are getting older. “Artists are now growing up so they can use cash, and they can plan estate,” says Mestel.
Of course, the downside could be a loss of control over the artist’s most valuable asset: the creative genius that made their careers.
“These older rock stars may want to spend money to provide for their property … but you lose control of your brand and your legacy, to some extent, depending on the protections you put in place as part of the deal,” John said. Ozszajca, musician and founder of Music Marketing Manifesto, a company that teaches musicians how to sell and market their music.
Crosby and Azov have long been friends, a point Azoff made in the statement announcing the deal.
Some fans aren’t very happy to hear songs like “Edge of Seventeen” by Nix or “Like a Rolling Stone” selling Dylan’s cars and clothes – although Dylan has done several Super Bowl ads dating back many years for GM, IBM, and his company. The songs stand alone in others – but catalog selling decisions can also help musicians avoid posthumous legal battles like Tom Petty’s Estates, Prince, And Aretha Franklin He had to endure.
BMG captured the catalog interests of fellow band Knicks’ Mick Fleetwood from Fleetwood Mac early this year and noticed some stats in their advertisement showing that it may be as old as Boomer’s works, they can get a renewed life from the blows of viral flow. Fleetwood Mac’s song “ Dreams ” generated over 3.2 billion streams globally (over an eight-week period from September 24 to November 19, 2020) due to a video with a fan loving cranberry juice, and introduced a new generation, more accustomed to TikTok, to Fleetwood Mac. The band’s album “Rumors” reached No. 6 on Billboard’s Streaming Songs chart 43 years after its release.
The Dylan deal is the largest reported to date, estimated at $ 300 million, although the sale price has not been officially disclosed, and only Universal said in a statement that it is “the most important agreement to publish music this century.”
Mistel believes the boom will not come to an end.
“Anyone who has a relationship in the music business seems to know that anyone is trying to raise money. But that doesn’t mean that they can identify assets to sell or even know what they are doing.”
BMG and Private Equity Giant KKR She recently signed a deal to get out and acquire major musical rights, etc. One Rolling Stone executives saidWe are not chasing after the hit songs from January 2021. We are looking at a repertoire that has proven itself to be a part of our lives.
KKR has been in big music deals in the past, and the equity trend is not new, but the current boom is noticeable, and it fits with the asset class appreciation that is taking place in many parts of the market as investors look for more ways to put their money in action. While the baby boom deals are the biggest headlines, recent business is also seeing big paychecks. Earlier this year, KKR reportedly bought a stake in OneRepublic’s Ryan Tedder company catalog for a reportedly high amount.
Companies like Primary Wave are working with artists like Nicks to try to keep them as part of the deal, and make this deal better for them in the future, according to Mestel, who says a lot of people didn’t understand they could get into the partnership, sell a piece of their catalog, and potentially That this piece becomes more valuable in the future than the 100% they previously owned.
“If all goes well, [artists] Get the most out of what they are trying to sell for, and this is usually a win-win scenario for the buyer and seller. ”
Поклонник музыки. Абсолютный любитель социальных сетей. Специалист по путешествиям. Страстный телегуру