Why so many big-name music artists are selling their music catalogs : NPR

Bruce Springsteen, Bob Dylan and Stevie Nicks are among the artists who have sold off all or part of their old catalogs. Why are they giving up future royalties and creative control over their songs?



MELISSA BLOCK, HOST:

How to put a price on the Boss? Well, Sony Music just did. He reportedly paid over $500 million for Bruce Springsteen’s entire back catalog. This means Bruce has joined Bob Dylan, Stevie Nicks, Neil Young and other stars who have sold substantial rights to their music.

NPR’s Neda Ulaby explains why.

NEDA ULABY, BYLINE: Last May, the chairman of Sony Music told investors that he had spent nearly $1.5 billion on music acquisitions alone since the start of the year.

(SOUND EXCERPT FROM AN ARCHIVED RECORDING)

ROB STRINGER: Including the rights to some of the most iconic artists and writers of all time, such as Paul Simon.

(SOUNDBITE PAUL SIMON SONG, “YOU CAN CALL ME AL”)

ULABY: So Sony gets royalties instead of Paul Simon every time a song he wrote is sold. There are differences between songwriting and performing royalties. And some of those deals are only for songwriting, plus the original recordings, called the masters.

But let a former music executive sum up the current market for each of them.

SERONA ELTON: It’s very hot (laughs).

ULABY: Serona Elton was working with the majors. Now she teaches at the University of Miami. She compares being a musician with a catalog of hits to owning a house now somewhere like Austin, Texas.

ELTON: All of a sudden the market is crazy, and everyone is paying ridiculous amounts of money – the kind of stuff you never thought you’d see. And people fear it’s a bubble. Maybe it will stay that way. You know, now might be a good time to sell.

ULABY: But we’re talking about musicians who aren’t exactly starving artists — huge stars notoriously keen on creative control. Bruce Springsteen even wrote songs reflecting his feelings of being burned by the company in the past.

(SOUND EXTRACTION OF THE SONG, “THE PROMISE”)

BRUCE SPRINGSTEEN: (singing) When the promise was broken.

TATIANA CIRISANO: The pandemic is one of them. I mean, touring has been at a standstill for a while. It could be blocked again.

ULABY: Music analyst Tatiana Cirisano says even Bruce Springsteen took a hit when it came to live performances last year. And who knows what awaits us? We know capital gains are likely to change.

CIRISANO: There is a tax advantage in doing so.

ULABY: And let’s be honest. Not only do these powerful musicians negotiate favorable deals, but many are senior citizens. They plan their estates.

(SOUND EXTRACTION OF THE SONG, “MR. TAMBOURINE MAN”)

BOB DYLAN: (Singing) Hey, Mr. Tambourine Man.

ULABY: When Bob Dylan sold his entire songwriting catalog to Universal Music last year, it included tracks he wrote over 50 years ago. So he’s taking a lump sum now rather than relying on royalties every time it goes viral on what TikTok could be decades from now. Even younger artists, like Shakira and Calvin Harris, have recently sold parts of their old catalogs because companies are paying too much.

(SOUND EXCERPT FROM AN ARCHIVED RECORDING)

STRINGER: In this lower interest rate environment, we’re seeing a larger base of private equity, technology platforms, pension funds and others aggressively investing in music assets.

ULABY: Sony Music Group Chairman Rob Stringer told investors this spring not to worry about those expensive catalogs. Stocks go up and down, but music – it’s a safe cash flow, thanks to Spotify, Apple and other streaming and subscription services.

(SOUND EXCERPT FROM AN ARCHIVED RECORDING)

STRINGER: The number of users of paid music streaming services grew by nearly 100 million in 2020.

ULABY: And it’s expected to grow by hundreds of millions more – synergy is also the name of the game here. When Sony buys Bruce Springsteen, they can use his music more easily in movies and television made by Sony Studios. Other artists from Sony labels can sample or cover his songs. And whenever a Bruce Springsteen biopic comes out, you can bet a Sony movie studio will.

Other artists are said to be about to sell their catalogs, including the estate of David Bowie.

(SOUND EXTRACTION OF THE SONG, “THE MAN WHO SOLD THE WORLD”)

DAVID BOWIE: (singing) Oh, no, not me.

ULABY: Whatever its value, that will be determined in part by the data we can provide at this particular time, if you listen to this streaming report.

Neda Ulaby, NPR News.

(SOUND EXTRACTION OF THE SONG, “THE MAN WHO SOLD THE WORLD”)

BOWIE: (Singing) With the man who sold the world.

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William N. Fernandez