Monday, November 28

Why are music legends now selling their entire catalogs?

Billboard magazine anticipated that Bruce Springsteen could have set a new record by selling his entire catalog to Sony Music. With an estimated price for publications such as New York Times of up to 550 million dollars, would exceed the one agreed a year ago by Bob Dylan, to whom Universal made an offer that would be around 400. They are not the only ones: Neil young, Tina Turner or Paul Simon They have also signed similar agreements throughout 2021.

The reasons why great artists are now selling their repertoire

It seems that the rock myths have agreed that this is the best time to sell the rights to their songs. But what are the reasons for this consensus? Manuel López, director of Sympathy for the Lawyer, a legal firm specialized in the music industry, contributes one of the main factors: “Such a high sum of money at these ages supposes a very high increase in their economic level.” Long careers and a lot of money on the table: a suggestive combination.

Joan Vich, ex-programmer of the FIB and manager of young bands through the Ground Control agency, points out another interesting perspective: “They anticipate that their patrimony will have to be distributed among their heirs and they prefer to bequeath it in a more tangible way.” Along the same lines is Pepo Márquez, who is active in independent bands such as The Secret Society but has also worked in multinational record companies. For him, “it is an opportunity to leave money as an inheritance, not rights, which saves future problems.”

They both agree that deciding now gives them better bargaining power. But in addition to the “possible domino effect” Vich refers to, emotional involvement also weighs in. There are exceptions such as The Killers or Shakira, but for López it is obvious that these experienced artists “value their career and their repertoire” by way of “recognition.” Also of tranquility: thanks to this injection of liquidity, they better face “the uncertainty that is hovering over the great international tours, which until now were a fundamental part of their business.”

The sector faces new scenarios in its best historical form

Naomi Planas, gerente general On the Worldwide Independent Network, he cites this “decline in live music” as a reason to “pay more attention to sources of income that depend on rights, such as streaming or those received from management entities. “In addition, it clarifies that” intellectual property rights create the conditions for musicians to earn a living with their talent. “That is,” the copyright it is his salary and in the case of such trajectories, a capital “.

This is not the case for the entire sector. Esteban Ruiz is a musician in I am dive and knows other organizational aspects of the scene thanks to his work at WeAreWolves Records or WOCA Foundation. He defines Springsteen or Dylan as “large corporations themselves” and although he concedes that “the pandemic may have precipitated the decision,” he is inclined to think that “it was simply time to sell because the market value of their assets is at a Maximum point”.

Can they not understand such a changing sector today? For Ruiz, “the multinationals have no problems with the streaming, even less with artists of this level. “The money generated by the industry, he explains,” grows every year while the agents among whom it is distributed decreases. “It is a concern shared by Planas, who considers it crucial to work for” that the streaming be fair and produce more returns for independent artists and labels through alternative systems for sharing this digital revenue. ”

Mutual funds seek a new piece of the pie

There are those who perfectly understand these gears. They are investment funds like the Hipgnosis Songs Fund, which was made with the rights of Neil Young or Shakira, or Eldridge Industries, in the cases of Springsteen or The Killers. Márquez clarifies that “it would be wrong to think that behind them there are only older men in suits who do not know anything; there are also young people with money, knowledge and passion for music, it is logical that the idea attracts them.” Especially in a sector capable of “predicting trends and even directing them artificially, at least towards the general public.”

There seems to be unanimity that, as López affirms, “music has become a very interesting asset from a financial perspective because it offers security, good profitability projections and synergies with sectors such as audiovisual or technology.” Planas calls it “the strongest competitive position the industry has ever had” since “the decline in sales and piracy problems of the early 2000s.”

There are also negatives. For Planas, “the hoarding of catalogs can lead to a greater concentration of the market, hindering the ability of independent labels to compete.” An intuition that Vich shares when he analyzes that these investments of the funds are about “imperishable classics”: they demonstrate that “music is not going to die” but they hinder “the constant renewal of the repertoire”, leaving novel expressions in “a niche position” .

Examples contrary to the trend and the case of Spain

Vich himself advised the sale to “an American artist over 60 years old.” He was right, since “he decided to do it just before the pandemic, which allowed him to buy a house for the first time in his life.” Not always, logically, the priority will be “to face this time without financial problems or have a better retirement.” On the opposite spectrum, Taylor Swift is re-recording his first albums to also regain control of the masters. “It is a simple move”, explains López, but that “only works when you have the economic and media strength” of an artist of its relevance.

Why are there no similar movements here? For Planas “it may, like many other trends in the industry, end up arriving a little later.” Vich explains that “in Spain and Europe, copyrights are inalienable and they will always maintain a minimum of 50% by law, while in the United States they can reach the total.” López, in addition to these “moral rights that the regulations recognize in favor of the authors”, also points to “the internal conditions of SGAE or the atomization of headlines in many classic catalogs”, among other factors.

But although this “makes it difficult to give up full control of the catalog,” he assures that at a legal level “there are solutions and alternatives to be able to materialize it”, which is why he considers it “a matter of time.” So is it a future that young artists must anticipate? For Vich it is vital that they make “free and active decisions”, while Ruiz encourages “understanding that this is a job”, which entails “understanding basic business processes and details.” Furthermore, “the artist, as the one in charge of creation, is the main driving force”, insists Márquez, “so we must never forget that he has a great capacity for negotiation”.