Why music icons’ songwriting catalogs could be the new gold: NPR

Music icons like Bruce Springsteen and Bob Dylan have sold their songwriting catalogs for sky-high sums. It’s a growing trend in an industry that has changed since streaming began.

RACHEL MARTIN, HOST:

Investment companies have spent a lot of money, billions of dollars in total, buying up the songwriting catalogs of music icons. We’re talking about Bruce Springsteen, Bob Dylan and Stevie Nicks.

(SOUND EXTRACTION OF THE SONG, “DREAMS”)

FLEETWOOD MAC: (Singing) Now here we go again. You say you want your freedom.

MARTIN: Stacey Vanek Smith and Anastasia Tsioulcas of our daily business podcast The Indicator from Planet Money are here to explain why some investors are betting these classic songs are the new gold.

STACEY VANEK SMITH, BYLINE: Historically, the economy of the recording industry has been messy and quite complicated, and a lot of artists will tell you that’s actually on purpose. I mean, it was an industry that had ties to gangsters since at least the 30s and 40s.

ANASTASIA TSIOULCAS, BYLINE: And the thing to know now is that in a lot of these gargantuan deals, we’re talking about the rights to the composed music and the lyrics, not the recordings the artists make of that. music.

VANEK SMITH: Musicians who have written their own material are selling their songwriting copyrights to investors. They’re all very aware that these days they earn far less on Spotify and other streaming services than they did when fans bought CDs or vinyl. So, Anastasia, you went to some of the biggest players in the music industry to find out – why music has become so attractive to investment companies and venture capitalists all of a sudden. a blow ?

TSIOULCAS: That’s right. One of them is Merck Mercuriadis. As a long-time figure in the music industry, he’s worked with what seems like everyone – Culture Club, Iron Maiden, Elton John, Guns N’ Roses, Beyonce.

VANEK SMITH: And Merck’s company, Hipgnosis Songs, now has about $2.2 billion in assets.

TSIOULCAS: Merck likes to compare songs as an asset comparable to gold and oil, and that’s music to investors’ ears.

MERCK MERCURIADIS: You know, if there’s a political upheaval, then the price of gold and oil is affected. But the songs are something that comforts you and you get away with these great songs. They are therefore always consumed.

TSIOULCAS: It’s sort of a mix of old-fashioned entertainment and investment talk. But investors are clearly liking the returns they’re seeing, according to Larry Miller. He is a professor and director of the music business program at New York University.

LARRY MILLER: The value of music rights has reached an all-time high. If you were a songwriter who wrote a really big catalog and maybe you were planning to sell it a decade ago in 2011 or 2012, you might be able to get something between 12 and 15 times the annual income of this catalog. Today, this same writer, they are able to get more than 25 to 30 times or more annual income.

VANEK SMITH: It’s good money.

TSIOULCAS: And these companies are making a return on their investment by putting these classic songs back into the public ear. They allow them to use them in commercials, movies, video games, TV shows, on Peloton and earn revenue through streaming services as well. So expect all of these classic songs to become even more ubiquitous, thanks to Wall Street.

Anastasia Tsioulcas.

VANEK SMITH: Stacey Vanek Smith, NPR News.

(SOUND EXTRACTION OF MOKHOV’S “GOLDEN WAVES”)

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