Hipgnosis selling catalogues off to reduce debt.
I wonder what it means for the music – how and where we hear it, as these catalogues get passed around the investment market.
https://www.honest-broker.com/p/investment-funds-are-now-selling
So Bob , Paul Simon etc so out at the top of the market
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Not surprised tbh.The prices the bread heads have been paying is insane
The biggest source of revenue for songs, etc is likely to be licensing for use in ads.
Leaving aside Macca, Simon and the Mac, most of the artists cashing in have only a handful of songs that are that well known.
Given that said artists’ audiences are aging and dying faster than the acts themselves, they are going to get taken to the cleaners when trying to offload them.
Did Macca cash in? Don’t think so
The most valuable revenue from music rights is streaming, a market worth worth around $45bn a year. Licensing into films and TV can be valuable if a song ends up placed in a blockbuster and the funds expect to see more revenue from it, but the real money comes from the streams. The age profile is pretty wide – Bieber sold his rights for something like $200m.
Really interesting. Surely it’s about songs that have entered the general popular conscience, outside of music fans of a certain age. That’s what’s valuable. So don’t base your investment on what Mojo or Rolling Stone think.
I think of my 77 year old Mum and my 19 year old daughter. Dylan would be my desert island artist. I’m fairly obsessed. But outside The Times.., Blowin in the wind, and at a push Rolling Stone I doubt they could name another song. And they probably don’t like the one’s they know.
Neil Young? Probably not even heard of him.
Paul Simon. Who he? At a push Bridge… which is kind of a standard now.
Stevie Nicks. My mum, no idea. My 19 year old could probably name and love half a dozen tracks, without actually knowing who she is.
Going by the numbers in the article I’d say whoever bought Nicks’ catalogue will get the best return currently
For Paul Simon I would think also Sound of Silence, Mrs Robinson, The Boxer, 50 Ways etc all could earn some cash
On it, Guiri. We think our music is massive, and it has been. But fewer of the emerging generations do. Makes me think of people who think their Beanie Babies and football programmes are an investment; a few might be, but most is ephemera. This is why the market is being flooded with box-sets for pensioners to buy; in a couple of decades, those tapes will be of academic and cultural interest, but, as Frank Zappa would say, “no commercial potential”. A few songs may be used in ads or films and become better known, but most of it will sink without trace.
»…most of it will sink without trace« – I bet some grumpy old men, sitting amongst their shelves of sheet music, said the same thing about Mozart way back when. 😉
What musically doesn’t seem to be sinking without trace is Abba and Fleetwood Mac. Is this why I protested in Grosvenor Square, took my clothes off to watch the Woodstock fillum and generally Stuck it to the Man? Mozart, my arse!
And now I can’t get those naked butts from the Woodstock movie out of my head… gonna be an interesting afternoon.
Sorry about that….
Because the best music always rises to the top, and decent artists are forever appreciated by society’s good taste and judgement, do you mean? I politely beg to differ.
No, I mean that nothing from today (or the last couple of hundred years) will »sink without trace«.
There are reissues of 120 years old calypso shellacs, quite unsuccessful comic book heroes from the early sixties get revamped for a blockbuster movie, previously unissued manuscripts from obscure 1930s female writers finally get a deluxe book launch, and a weird Irish folk group with two albums to their credit are the subject of a 300-page illustrated biography. Last week I received the »deluxe reissue« of the complete recordings of Vince Malloy, who released three 7″ singles in his lifetime – which all flopped.
Yesterday I heard an ad on TV which was using an arrangement of Toto’s ‘Africa’ as the backing music. Great tune, fine record.
Not sure what percentage of the TV audience would have spotted the tune’s origin though, so what possible motive is there for using that specific tune for an ad?
I remember the tune on the ad (I am after all a boxed-set-buying oldie), but I have no idea what the ad was for, so even for me it failed as an ad hook. Why not commission an original tune for the stupid advert?
I know the one you mean. I think it’s for travel guides or holidays or something. The pictures shown in the advert were not of Africa (or Toto, come to think of it).
»I remember the tune on the ad (I am after all a boxed-set-buying oldie)…« – I think you have the wrong idea about tunes in commercials, and why they’re chosen.
Most often it’s not to appeal to a certain age group with a song »they might like«. It’s the opposite – instead of taking something that could as well be playing from the radio, they pick something more or less unusual, but that fits a certain mood or atmosphere they want to evoke. »What A Wonderful World« wasn’t chosen for the Levi ad because they thought Sam Cooke was »happenin’«, it had a dreamy, nostalgic mood, sounded vaguely familiar, and it was available. The ad with the »Africa« tune certainly wasn’t aimed at the Toto fan club.
And it’s always easier to licence a track than to use a new, original tune (too much hassle for the agency with composers, musicians, recording studios, etc.). And money is never the problem – the client pays the bill, not the ad agency.
Nowadays it’s availability that counts. Every agency has its own team of music licensing experts that tries to place one off of their lists in a commercial. If Dylan is available, they’ll probably put »Masters Of War« in a ToysRUs advert if someone like it.
Loads of people would know Africa. It’s become a meme.
https://knowyourmeme.com/memes/totos-africa
I can’t see why it will make any difference to listeners. The Beatles rights changed hands several times, Macca sued Sony to gets his mitts on them, and Wacko Jacko owned them for a while. The albums remained available. Gail Zappa blocked deal after deal, but since she died the Zappa Trust has been pushing stuff out on a regular basis. The days in which bands would turn down licensing deals are gone; cash flow is king.
Ted is very keen on his blog to say have his told you so moment, but in doing that he fails to mention that Hipgnosis are selling to a sister fund that is a joint venture between Blackstone and …… Hipgnosis. Did they overpay; seems likely, off the back of the streaming boom that the pandemic induced, but interest rates have galloped upwards too, and that’s always going to make anything bought using debt – music rights, fine wine, classic cars, houses – more expensive that you first thought.
It is strange to see what people buy in relation to one’s perceptions of the biggest sellers.
In the record shop where I occasionally work
we have sold Mamas and Papas greatest hits two days running. Who would have thunk.
But it is autumn now – all the leaves are brown and the sky is grey.
Might be a reason
Hah!
Good analysis.
Once his widow Gail had died, the Zappa Family Trust* wisely sold everything to Universal.
There was just too much stuff for them to manage without bankrupting themselves. They still have a certain amount of say in what is done with it but not the financial responsibility.
*The trust is administered by Ahmet and Diva Zappa, with no management input from Dweezil or Moon, who just draw income.
And remember, the Zappa reissues in his lifetime (pre-1994) were pretty much the benchmark on how ‘not’ to do it.
From a music connoisseur POV most certainly, but they sold well enough at the time. Income was generated.
The sources of money can be surprising.
In Australia there is a small chain of enormous second hand stores called Savers. That is the individual stores are enormous but they only have a dozen shops in the country. Literally a dozen, nine in Melbourne and three in Adelaide. I do the rounds of them pretty regularly. It’s an American chain and is the perfect business. People drive up and give you stuff which you then sell at profit. It is not a charity.
Anyway…
I purchased a book on Morrissey and the young lady at the till said, “Oh him! They play him over the speakers here all the time.” It was only then that I realised how strange the shop’s music was. The chain basically has it’s own radio station and wandering around their aisles, it doesn’t matter which branch, you hear the same songs over and over again, not just things like Fleetwood Mac but Teenage Kicks and (I’m) Stranded. They were never hits here.
Savers has to pay for the use of them. It may not be much but the money goes somewhere. That’s just one crappy store in a small pocket of the world. It all adds up.
Sounds a bit like the Co-op here, the smaller branches rather than bigger ones, that seem to play a revolving forty or so quite famous songs all the time, precisely none of which I can remember right now.
There must be a purpose, I suppose…
I once (about 20 years back) received an IMRO (PRS) payment of £100 for a song I’d written ages before, which struck me as curious. IMRO was able to tell me, on enquiry, that it was a play in a shopping mall somewhere in England. My immediate thought was ‘Blimey – how much is Noddy Holder earning?’
500,000 to 1,000,000 just for the Christmas one.
I think in the last such thread Dai explained why the prices paid for back-catalogues made at least some financial sense but simple old me struggles to see much revenue coming in down the line from streaming or radio stations. “And here’s another foot-tapper from Bob Dylan, Mr Tambourine Man !”
Every play, anywhere in the world on a regulated radio station, is logged and royalties are assigned via whichever organisation controls collection of royalties in that jurisdiction. PRS For Music in the UK. Anywhere in the UK where music is played in public (shops, pubs etc.) must, by law, have a license from them, for which they must pay a fee. They employ investigators to check on businesses that don’t have licenses and will prosecute those who operate in breach of the law.
https://www.prsformusic.com/what-we-do/licensing-music/do-i-need-a-licence
Yes, I know how the system works but my question remains – does it still make financial sense to pay out all that lolly for bodies of work that may well be irrelevant in the not too far off future? I’m guessing it probably does but be nice if someone what knows confirms.
Agreed. None of the reasons seem to make sense.
On the surface I can see why someone might pay 400 million for Dylan. It’s a vast body of work, probably unmatched for quantity and quality in the history of pop.
But the huge majority of those songs will never be played on the radio, used in an advert or film or even streamed much, and certainly never be played in shops. And the Adele cover is likely a one off unless Taylor Swift decides to tackle Murder Most Foul on her next album.
I suppose the Bootleg series is fairly lucrative at the moment. But that’s only until us lot die off. The more you think about it the less sense it makes.
I think there’s a difference between saying that a lot of this music will be forgotten in due course and saying that it will be forgotten imminently.
I’d imagine that a lot of this stuff still has decades ahead of being commercially viable. The prices being talked about in the article aren’t exactly astronomical in the grand scheme of these things. Plenty of time to extract the necessary value.
I appreciate it may look odd to those of us who grew up having to buy music in order to hear things we liked. For a lot of the AW demographic, there’s been little or no change in how they music access. We experienced and largely celebrated the transition from vinyl to CD. It seemed significant at the time, but really all that changed was the medium music was delivered in. It remained an ownership based business model, and the record companies retained control of it. There was plenty of heat and light about what were seen as existential threats – home taping was killing music apparently – but it was still the case that the only way you could hear what you wanted, when you wanted was to physically own it.
However the internet irrevocably broke that model. Selling music to people that want to own it is now pretty much already dead as a business proposition and will remain a niche interest once we boomers pop our clogs. And it’s the post internet, music as a consumed commodity not an owned asset model that the businesses like Blackstone, Universal and Hipgnosis can see big returns from.
It’s not about radio or TV and film licenses. Sure they can make money, but they are crumbs compared to the reach that streaming now has – a $43bn market where there’s no physical inventory or distribution costs, where product can reach anyone with an internet connection almost instantly. Spotty has 350m users alone, You Tube around 2bn. Ever heard of Gaana Music? No, me either but it reaches 185m people in India alone.
The funds aren’t just buying wrinkly rock. Hipgnosis bought Jimmy Iovine’s producers royalties so they have a share in music made by Eminem and 50 Cent. They also snapped up rights to music made by Justin Timberlake, Justin Bieber, Natalie Merchant, Nelly, Blondie, Pussy Riot, Roseanne Cash, Shakira, Sister Gertrude Morgan, RZA and dozens more. The more they own, the more they can dictate terms to the streamers and the bigger their take gets. Will interest in Dylan’s music die? Well, it’s must easier to monetise when all you are looking for is streaming clicks and not physical purchases. Much easier to sustain the visibility of someone at least a little familiar on streaming platforms with their endless themed playlists.
As if to prove your point, Katy Perry announced the sale of her rights in the last 24 hours.
I agree with you on streaming; it’s approx two thirds of music industry revenue at this stage.
You do need to keep ears listening in volume though to continue to make decent money from individual artists though. From that perspective, I suspect licensing will play an important part in the strategy around these rights – it’s not even so much the money you make directly, it’s the halo effect of sending a ton of people off to stream the songs in question and reconnect with the artist on Spotify et al. As some of the legacy acts reach the end of their touring lives it will only become ever more important to find ways to keep shining a spotlight on their catalogues.
I don’t suppose selling off just the “juicy bits” from Dylan (or any high-profile artist)’s catalogue would be entertained. You either buy the package or you don’t buy at all.