Catalog sales

Inside the boom – Notice board

The catalog publishing market is booming as institutional investors and new companies like Primary Wave Music and Round Hill Music compete with majors and older companies. So far, however, attention has focused on the rights of great songwriters: Bob Dylan, Neil Young, Stevie Nicks.

Among those who pay attention? Young songwriters who may not have written ‘The Times They Are A-Changin’ – but can easily see that they are. “Every artist in the industry is currently reviewing the ratings that have been applied to publishing,” said Mark Gillespie, CEO of Three Six Zero, whose client Calvin Harris, 37, sold his publishing catalog of 150 songs to Vine Alternative Investments in October in a deal valued at over $ 90 million. “I think every designer who has a solid catalog, it makes sense that they take a look at it right now.”

Traditionally, songwriters have been reluctant to sell their publishing rights, which are often a source of personal pride as well as a source of income that can survive them. This changes as the market heats up, tax breaks are looming and touring could be stuck for a while, while music catalogs are being reconsidered not only as a collection of artistic works, but also as a collection of artistic works. monetary assets and sources of income, and no longer the contents of a singular bag of stuff but rather the many threads of songs, eras and income that make up the bag itself.

In the past six months alone, Concord Music Publishing has purchased Imagine Dragons’ own stock in its old catalog (while Universal Music Publishing Group has retained its share); Vine Alternative Investments has acquired the rights to the publishing catalog of over 100 songs from Sean Douglas, a 37-year-old songwriter-producer whose credits include hits by Demi Lovato and Jason Derulo; The 38-year-old singer-songwriter-producer Louis Bell sold the songs he had written and produced through 2019, including hits by Post Malone and Halsey, to UMPG; and Ryan Tedder, 41, has sold a majority share of his nearly 500 songs to global investment firm KKR & Co. And these are just a few of the bigger deals.

A source familiar with catalog sales says that a big part of the reason artists typically didn’t want to sell their catalogs was for fear of bastardization – for example, a liberal artist’s song ending up in an advertisement. Trump. Young creatives have also been warned by many artists who regret paying too early. As multiples continue to rise, some now think this might be their best bet.

This is why the source says that even though they were against the idea of ​​selling before the current gold rush – because no one ever walked away happy with their deal – they now recognize that the edition is in transition. Since a large portion of a songwriter’s income typically comes from performing royalties generated from public performances of their works in places like bars, clubs and restaurants, which were gone in 2020 and no. ‘have yet to reappear this year, young songwriters with more modest sources of income are wondering what to do. The source says that if a songwriter can invest that money and generate a return over the next 15, 17, or 25 years, it would be foolish not to. (Even so, at least a half-dozen artists who have sold a partial or full stake in their catalog or have yet to do so declined to comment.)

The recognition that publishing rights are assets just like art has also made it easier to sell non-flagship songs in a catalog, meaning creators have more choices than ever before. “Some songwriters sell part of their catalog, or half of their catalog, or certain years that they’ve worked – that’s basically seen as another form of investment,” says Mike Smith, global president of Downtown Music Publishing. “They’ll hold back 50% of their catalog and still look for the returns they can get from it in the future, but they’ll take the money out and use it to invest in other things.” Some writers want to start a studio or start their own music publishing company. In other words, they spread their bets.

Over the past few years, companies have emerged that can help songwriters sell even more granular pieces of their work. “There’s a lot more to the music industry than the superstars, and that’s where we focus – the middle-class, working-class musician who doesn’t really have any other options,” says Anthony. Martini, a partner of Royalty Exchange, which operates a platform that allows rights holders to auction income streams to investors. “A lot of these funds can’t even buy something that’s less than a certain amount. If you have a catalog and you could close a deal for $ 100,000 or a few hundred thousand dollars, no one is really looking at that. We want to open this market to everyone.

As streaming expands and music generates more predictable returns, the influx of money and attention is also changing the way songwriters view the way their work is handled. “What I’m seeing is the emergence of a much more DIY-oriented ethic,” says Smith. “They just want to have a sustainable career in which they are in control of their own destiny, ideally in control of their own copyright and publication rights, and having a sustainable income and solid sanity is probably more important to them than trying. to get on the roulette wheel to become a superstar.

Publishers are also changing. In 2010, Kobalt Chairman Willard Ahdritz helped launch Kobalt Capital, what he called a “financial innovation” that became the first music royalty fund regulated by several institutional investors. “People wanted to sell because they wanted to buy a house, or they had a divorce, or they had all their money in copyright and they wanted to branch out,” says Ahdritz. “So my thought was, ‘Why would they go to another publisher if they wanted to sell? For new writers and in the future, I don’t mind selling when people see the value. What is happening now is positive for the arrival of new talent.

Kobalt also helped secure shorter contracts, which have since become an industry standard, while the shift to administration over the past decade has made it easier for songwriters and investors to own titles. songs while offloading marketing and accounting to traditional publishers. It also means more options. “In the ’80s, everyone was saying they didn’t know if the company would survive if it moved away from 50-50 copyright lifespan agreements,” says Smith. “And now we see very thin divisions, we see very short terms and we still see a very strong company.”

And after? “In the not too distant future, you will see an acceleration in accounting and the possibility of using new technology to make payments,” says Gillespie. “Is this going to affect the business? It’s certain. Even just in the mindset of “I make a song, what is its recognized long-term value?” “

A version of this article originally appeared in the February 20, 2021 issue of Billboard.