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Music

Why are artists selling the rights to their back catalogues?

@TylerGolsen

If you’ve been paying attention to money flowing through the music business in recent years, you’ve no doubt come across the phenomenon of artists selling the rights to their back catalogues. Everyone from Neil Young to Bob Dylan to Stevie Nicks have opted to cash out and hand over the rights of their legendary songs to corporations like Hipgnosis, Sony and Primary Wave.

An artist deciding to no longer control the rights to their own material is nothing new, but the number of notable artists deciding to go through with it had seemingly exploded in the past three years. For an art form that seems to value anti-establishment leanings, plenty of countercultural figures are leaning heavily into the corporate cash grabs that will make them millionaires hundreds of times over.

Don’t take my word for it, though. Here are what some of the artists themselves have said about selling the rights to their back catalogues. Bruce Springsteen sold his rights to Sony Music Entertainment for a mammoth $550 million and is seemingly more than happy to keep his music within the family: “I am one artist who can truly say that when I signed with Columbia Records in 1972, I came to the right place. During the last 50 years, the men and women of Sony Music have treated me with the greatest respect as an artist and as a person. I’m thrilled that my legacy will continue to be cared for by the company and people I know and trust.”

Bob Dylan, one of the bastions of deep and worthy back catalogues also sold the rights to his work. One of the first to make the move, Dylan sold his songs for a reported $300 million, once again selling his tracks to Sony: “Columbia Records and [Sony Music Group Chairman] Rob Stringer have been nothing but good to me for many, many years and a whole lot of records. I’m glad that all my recordings can stay where they belong.”

It’s not just long-established entertainment agencies that are picking up the songs from the past. Fleetwood Mac stars, Christine McVie and Lindsey Buckingham both sold their portions of the Fleetwood Mac ships to music publicist Hipgnosis. The song management company, founded by Merck Mercuriadis and Nile Rodgers back in 2018, has spent more than $2 billion in its first three years in operation acquiring the rights to various artists songs. “I am so excited to belong to the Hipgnosis family,” recalled McVie, “and thrilled that you all regard my songs worthy of merit. I’d like to thank you all for your faith in me, and I’ll do all I can to continue this new relationship and help in any way I can! Thank you so much!”

McVie joined Stevie Nicks, Lindsey Buckingham and Mick Fleetwood in selling her songwriting rights to Hipgnosis. Buckingham later said of the deal: “Prior to arriving at an agreement with Hipgnosis, I had wonderful long conversations with Merck Mercuriadis. I was pleased to find a kindred spirit, someone who’s a big fan of my work in Fleetwood Mac, and an even bigger fan of my solo efforts. I look forward to working with Merck and the whole Hipgnosis team going into the future, and am confident that my body of work will be curated with great heart and insight”. No numbers were disclosed regarding Buckingham and McVie’s sales while Stevie Nicks’ portion of the catalogue was estimated at around $100 million.

For Sting, founder of The Police and the owner of a multitude of big hits, the decision was more about preservation than profit: “It felt natural to unite everything in one trusted home. It is absolutely essential to me that my career’s body of work has a home where it is valued and respected. Not only to connect with longtime fans in new ways but also to introduce my songs to new audiences, musicians and generations.”

It’s not only legacy acts who are desperate to cash in on their catalogue, Las Vegas rockers, The killers sold their rights to Connecticut based Eldrige, fronted by Todd Boehly. “We have the greatest fans in the world. Eldridge’s broad network across music, television, and film will provide new opportunities for our music to be enjoyed by millions across the globe.” 

Why now, and why are so many artists selling their rights?

Part of the answer might be contextual: for all artists that had to suffer through the Covid-19 pandemic, touring revenue and other sources of income rapidly declined. A band as young as Imagine Dragons selling their relatively-recent catalogue makes sense when their main source of money was slashed significantly in the past three years.

There’s another theory kicking around that posits that this is the final point in time where artists can truly cash in on their notoriety and popularity before the modern state of the record business catches up with them. Physical sales and songwriting royalties are diminishing in the face of streaming services, making the value of owning the rights to popular songs fall each and every year. If your golden era is gone, why wouldn’t $100 million upfront seem tantalising?

The truth is that, as the rights to songs continue to get lower in value, the window of opportunity to cash in closes. Major conglomerates like Hipgnosis have the ability to throw around hundreds of millions of dollars around because, over the next few decades and beyond, they will have the ability to see their investments come back to them. If you’re an ageing artist, you don’t have that same luxury. Maybe your kids and grandkids might, but you certainly won’t.

There’s also an important distinction to be made in what is being sold and who has the rights to what in these deals. For all songs, there are two main sources of revenue: songwriting royalties and publishing rights. For the former, there are actually three ways to get paid. Mechanical royalties are physical and digital sales, and these are typically split with the publishers. Performance royalties include songs played live, on the radio, or streamed on services like Spotify. Synch royalties involve songs that are played in films, television programmes, YouTube videos, and the like.

When you own the publishing rights, you get to dictate where and how these songs get placed. Publishers can block material from appearing on streaming services or place a song in a movie/television show without the consent of the actual artist. There’s little direct money involved with owning publishing, but there’s much greater control of power that comes with it.

Some artists have exploited the differences between these. Leonard Cohen’s estate, for example, used the fact that Cohen used two different publishing companies througout his career to help facilitate a selective sale of his rights. When Hipgnosis purchased the rights to his back catalogue earlier this year, they only obtained the songwriting royalties, with Cohen’s estate continuing to control the publishing rights to the late singer’s songs.

In this way, there are multiple avenues for artists to control the sales of their back catalogues. Neil Young wound up only selling half of his catalogue to Hipgnosis, and it’s likely that Young opted to retain his publishing rights in order to watch over how his songs were being used in media. But for the most part, musicians are selling their catalogues wholesale for major profit.

So next time you see a Fleetwood Mac song in a car commercial, just know that none of the members have a say in that anymore.