The market for publishing catalogs is booming as institutional investors and newer companies like Primary Wave Music and Round Hill Music compete with the majors and older firms. So far though, most of the attention has been focused on the rights to big-name songwriters: Bob Dylan, Neil Young, Stevie Nicks.
Among those paying attention? Younger songwriters who may not have written “The Times They Are A-Changin’ ” — but can easily see that they are. “Every artist in the business right now is having a look at the valuations that have been applied to publishing,” says Three Six Zero CEO Mark Gillespie, whose client Calvin Harris, 37, sold his 150-song publishing catalog to Vine Alternative Investments in October in a deal estimated to be worth over $90 million. “I think every creator who has a solid catalog, it makes sense for them to have a look at this right now.”
Traditionally, songwriters have been reluctant to sell their publishing rights, which are often a source of personal pride as well as a revenue stream that can outlive them. That’s changing as the market heats up, tax advantages loom and touring could be stalled for some time, while music catalogs are reconsidered as not just a collection of artistic works but also as a collection of monetary assets and revenue streams, no longer the contents of a singular bag of tricks but rather the many threads of songs, eras and incomes that make up the bag itself.
In the past six months alone, Concord Music Publishing purchased Imagine Dragons’ own shares of its back catalog (while Universal Music Publishing Group retained its portion); Vine Alternative Investments acquired the rights to the 100-plus-song publishing catalog of Sean Douglas, a 37-year-old songwriter-producer whose credits include hits by Demi Lovato and Jason Derulo; 38-year-old songwriter-producer Louis Bell sold the songs he had written and produced through 2019, including hits by Post Malone and Halsey, to UMPG; and Ryan Tedder, 41, sold a majority share in his nearly 500 songs to the global investment firm KKR & Co. And those are just some of the bigger deals.
One source familiar with catalog sales says a big part of the reason why artists typically didn’t want to sell their catalogs was fear of bastardization — for example, a liberal artist’s song ending up in a Trump ad. Younger creatives have also been warned by plenty of artists who regret cashing out too soon. As multiples keep rising though, some now sense that this could be their best chance.
That’s why the source says that even though they were against the idea of selling before the current gold rush — because no one ever walked away happy with their deal — they now recognize the publishing business is in transition. Since so much of a songwriter’s income has typically derived from performance royalties generated from public performances of their works in places like bars, clubs and restaurants, which faded in 2020 and has yet to return so far this year, younger songwriters with more modest income streams are left asking what they’re going to do. The source says if a songwriter can invest that money and make a return over the next 15, 17 or 25 years, that it would be foolish not to do it. (Even so, at least half a dozen artists who have sold a partial or full stake in their catalog or have yet to do so declined to comment.)
The recognition that publishing rights are assets as well as art has also made it easier to sell the non-blue-chip songs in a catalog, which means that creators have more choices than ever. “Some songwriters are selling a portion of their catalog, or half their catalog, or certain years that they’ve been working — it’s essentially seen as just another form of investment,” says Downtown Music Publishing global president Mike Smith. “They’ll hold back 50% of their catalog and still look to what returns they can get from that in the future, but they’ll take the cash out and use that to invest in other things. Some writers want to start a studio or start their own music publishing company.” In other words, they’re spreading out their bets.
Over the past few years, companies have emerged that can help songwriters sell even more granular pieces of their work. “There’s a lot more to the music business besides superstars, and that’s where we focus — the midtier, working-class musician who doesn’t really have other options,” says Anthony Martini, a partner at Royalty Exchange, which runs a platform that allows rights holders to auction off revenue streams to investors. “A lot of these funds can’t even buy something that’s under a certain amount of money. If you have a catalog and could do a deal for $100,000 or a couple hundred thousands of dollars, no one is really looking at that. We want to open this market to everyone.”
As streaming grows and music generates more predictable returns, the influx of cash and attention is also changing how songwriters think about the manner in which their work is handled. “What I’m seeing is an emergence of much more of a do-it-yourself ethic,” says Smith. “They just want to have a sustainable career in which they’re in control of their own destiny, ideally in control of their own master and publishing rights, and having a sustainable income and robust mental health is probably more important to them than trying to get on the roulette wheel to being a superstar.”
Publishers are changing, too. In 2010, Kobalt chairman Willard Ahdritz helped launch Kobalt Capital, what he called a “financial innovation” that became the first music royalty fund regulated by multiple institutional investors. “People wanted to sell because they wanted to buy a house, or they had divorced, or they had all their money in copyrights and they wanted to diversify,” says Ahdritz. “So my thinking was, ‘Why would they go to another publisher if they wanted to sell?’ For new writers and going forward, I don’t see a downside in selling when people see the value. What is happening now is positive for new talent coming in.”
Kobalt also helped usher in shorter deal lengths, which have since become an industry standard, while the shift toward administration over the past decade has made it easier for both songwriters and investors to own songs while offloading marketing and accounting to traditional publishers. This, too, means more options. “In the ’80s, everyone was running around saying they didn’t know if the business would survive if they moved away from 50-50 life-of-copyright deals,” says Smith. “And now, we’re seeing very slim splits, we’re seeing very short terms, and we’re still seeing a very robust business.”
What’s next? “In the not too distant future, you’re going to see more speeding up of accounting, plus being able to use new technologies to be able to deliver payment,” says Gillespie. “Is it going to affect the business? For sure it is. Even just in the mindset of, ‘I’m creating a song — what is the long-term recognized value of it?’”