Bringing back the hits: mining gold from music catalogs

Traditionally in the music industry bands like Air Supply were only as good as their Next hit. But for people like Graham Russell and Russell Hitchcock of Air Supply, times are changing. In 2020, Bob Dylan sold his entire catalog to Universal Music for an announced amount of 300 million dollars. Bruce Springsteen sold to Sony Music a year later for around $550 million.

Larry Mestel’s company, Primary Wave, has been buying music catalogs since 2006. “Can you imagine Sony without Bruce Springsteen on their roster?” he told correspondent Kelefa Sanneh. “They were going to have to pay what they had to pay to keep Bruce Springsteen.”

Two years ago, Air Supply sold part of its music rights to Primary Wave. The company places hits like “All Out of Love” on TV shows (like “Young Sheldon”) and in commercials, like this ad for AAA Insurance:

Sanneh told Hitchcock and Russell, “Part of it’s about celebrating you and rewarding you for the music you’ve made.”

“Whereas before, if you signed a contract for seven albums, they promised to take all your money for seven albums!” laughs Russell.

When asked if he remembered the first contract he ever signed, Hitchcock laughed: “Yeah, I think it was a blank sheet of paper with our signatures on the bottom!”

“And can you give people an idea, for example, of the importance [Primary Wave] was?” asked Sanneh.

“It was huge,” Hitchcock replied.

” Big ? We’re talking, what, seven digits?

“Bigger than seven.”

Hitchcock and Russell also retain veto power over song placement, in part due to a bad experience with the soda., an audio commercial for Dr Pepper they did in the 1980s. “That was awful!” Russell burst out laughing.

Mestel bought the rights to artists ranging from Smokey Robinson to Kurt Cobain. He held as an example a Converse sneaker bearing Cobain’s writing. Sanneh asked, “This sneaker played a big role in your business development, right?”

“It’s true,” replied Mestel. “We were the first company to put lyrics on the side of sneakers and turn the deal from a merch deal to a music deal, right? Because the lyrics had to be licensed. “

In 1985 Michael Jackson has outbid his former friend Paul McCartney for the publishing rights to the Beatles catalog. It cost $47.5 million, but it was worth a lot more. And some people have learned a simple lesson: NEVER sell your songs.

Sanneh asked Mestel, “How did you fight that stigma?”

“Well, today it’s easy, isn’t it? Because if a Bruce Springsteen sells or a Sting sells and a Paul Simon sells and a Bob Dylan sells sells, you know, it opens the floodgates for artists in general,” he replied.

Mestel’s company now faces deep-pocketed competitors like Hipgnosis Songs Fund and Round Hill Music. The market for songs is maturing – and so are singers. Mestel said, “They’re in their 70s and 80s, so artists are interested in estate planning.”

“Are there certain genres that interest you, or not as interested?”

“Yeah, classic rock, urban, we do jazz, we do soul,” Mestel said. “We don’t usually do a lot of country music. You don’t see a lot of country songs in commercials.”

Air Supply’s love songs are no longer on the pop charts, but Russell Hitchcock and Graham Russell say the opportunities are limitless.

“Years and years and years ago they actually had a Formula 1 car sponsored by Durex,” Hitchcock said. “I went, ‘What? Condoms, you know, sponsor an F1 car?'”

“Has there ever been a commercial for a condom using an Air Supply song? asked Saneh.

“Hey, I’m done with that,” laughed Russell as he sang, “You’re not in love anymore! I’m so lost without you…”

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Story produced by Mary Raffalli. Publisher: Emanuele Secci.