Record label Sony announced this week that it has acquired the rights to Bob Dylan’s entire catalog of recordings, dating back almost 60 years.
Dylan sold the rights to Sony in a deal worth between $150 million and $200 million in July last year, according to Variety.
The singer-songwriter also sold his catalog of songs in 2020 to Universal Music Publishing for a sum sources suggested close to $400 million.
But what triggers this current trend of great legacy artists – including Bruce Springsteen, Paul Simon, Red Hot Chili Peppers and Mötley Crüe in 2021 alone – selling their publishing rights and/or recorded music for are we record?
According to experts, various factors come into play.
One is the record high interest rates on borrowing money for investment, and another is the continued success of streaming.
According to a recent report, global streaming revenue grew 19.9% in 2020 to $13.4 billion.
This represents 62.1% of total recorded music revenue worldwide. And it’s well known that streaming favors major artists, which means catalogs of iconic artists are a good investment.
Rise of social sharing
New social media platforms like TikTok now mean that an old classic like Fleetwood Mac’s Dreams can suddenly find itself generating billions of streams around the world, as happened in the fall of 2020 due to a video viral of a man on a “vibrating” skateboard to the song.
Due to all these factors, music publishers and other investors are now clamoring to buy the rights to music catalogs from legendary artists as a means of future investment.
A good tune, after all, never goes out of style, which means they could reap some big returns.
Especially when it comes to song licensing for commercials, movies, TV, and the endless amount of original content currently being produced around the world by streamers like Netflix, HBO Max, and Prime Video.
As Josh Gruss, Founder and CEO of Round Hill Music, recently told Rolling Stone: “It’s almost like works of art – there are a finite number of real, really high quality hit songs from the past – and there’s this kind of -out grasp to own those rights.
“It’s a very steady stream of income that’s there, and that makes it very attractive for investment.”
For the musicians themselves, it is a form of estate planning and financial provision for the future.
It also means less taxation, because the profits from the sale of your catalog are treated as a capital gain, and therefore taxed at a lower rate than a royalty check.
Today’s demand for old catalogs means that aging musicians can cash in now while the market for their recorded music and publishing rights is still booming, and then reinvest that money however they see fit.
Plus, selling the rights to your songs and recordings while you’re still around probably means more control over how your music is used in the future.
In the right hands and with the right conditions, it could even help strengthen your legacy and help the owners of your estate avoid lengthy legal battles, as in the case of other great late artists like Kurt Cobain, Tupac and Prince.