Could Fans Become The Keepers Of Catalogs?
Endless Artist Buyouts Have Us Considering Other Options
Few headlines have been as constant over the previous 12 months as announcements of canonical artists selling their catalogs — starting with seminal boomer acts (Bob Dylan, Beach Boys, Tina Turner, Lindsey Buckingham, James Brown, Paul Simon, David Crosby) and quickly including more contemporary artists like Massive Attack, David Guetta and the Red Hot Chili Peppers.
Beyond the marquee names, there were also seemingly endless deals for producers and songwriters such as Jimmy Iovine, Bob Rock, Joe Little and Jackknife Lee. And plenty of horsetrading between rights-holding companies themselves, including Downtown Music selling their complete copyright catalog to Concord Music and Kobalt selling catalog to new KKR venture, Chord, for $1.1 billion.
All told, at least $5 billion was spent on music rights acquisitions in 2021. And the October announcement of a $1 billion fund run by music rights specialist Hipgnosis and global investment behemoth The Blackstone Group means that the 2022 market for music rights should be just as bullish.
The logic behind this for investors has been thoroughly vetted. Music rights have proven to be a durable asset, even in uncertain economic times, while streaming revenue continues to grow like gangbusters. And catalog streams continue to expand as a portion of that growth.
And the reasoning for artists is equally sound. Estate planning has to be front of mind for a generation of musicians now in their 70s and 80s. And younger creators have every incentive to take advantage while the market for music rights is red hot.
In addition t the big bucks at stake, the knottiness that emerges in the absence of proper planning has been witnessed time and time again. Few more saliently than the estates of Prince and James Brown, both of which saw significant changes of hand in 2021 following years of wrangling between family members.
The fact that Brown attempted to launch his own label — telling named Fair Deal — in 1964, and Prince famously spent a good chunk of the 1990s battling his label by changing his name to an unpronounceable glyph and writing the word SLAVE on his cheek can lead one to wonder whether either pioneering artist would be happy to see their life’s work end up in corporate control. But the options for posthumous protection over one’s work is limited, and few families have the wherewithal to properly manage the daily operation of seven and eight-figure catalogs.
But that doesn’t have to be the case forever.
The drive towards Web3 in the music industry has been slowly moving past the hype cycle of NFTs and into more functional protocols that could result in a future where artists have the ability to pass control of their work directly onto their fans.
Financially, this is already beginning to emerge with the sale of music rights directly to music fans. Artists from NFT native Verité and crypto maximalist 3lau to early adopter Jacques Greene and industry veteran Nas have all experimented with this new paradigm. Unfortunately, as is often the case with both the music and crypto industries, the rigors and realities of doing good business are frustratingly opaque in terms of ownership and operations.
But no less than expert contrarian Steve Albini declared that “contracts are a complete fallacy” not that long ago. The revered producer famously refuses to take points on albums he works on, including Nirvana’s In Utero. The fact that the band’s surviving members still scrap with Kurt Cobain’s widow Courtney Love 24 years after his death probably proves that Albini made a wise decision. But were he to collect shares of copyrights throughout his career, you can imagine that the idea of exiting to the community would gel with his punk ethics.
In fact, there’s an entire generation of DIY artists who might prefer that spirit live on after they’re gone. Ian McKaye isn’t quite old enough to think about such things. But at 59, the Discord Records founder and key songwriter and performer in quintessential DIY acts Minor Threat and Fugazi isn’t not old enough to consider these things.
And Nick Cave, who spent almost his entire career with indie institution Mute has found a late-career renaissance since moving his last several albums to his own Bad Seeds Ltd. imprint. The 64-year-old Cave has also made a mission of connecting with fans, maintaining his weekly Red Hand Files newsletter, where he answers inquires from readers, for over three years.
It’s unlikely to see Cave spinning up his own Discord server any time soon, but that doesn’t mean he wouldn’t be amenable to the idea of his fans as the final stewards for his work
In fact, controlling a creative estate means much more than just splitting the money. The other big selling point for artists parting with their catalogs has been the idea that these institutional rights holders are best positioned to maintain an artist’s legacy (and thus the value of their holdings). But there could be a better way forward here as well.
Though even more in their infancy than NFTs, DAOs have become a major buzzword in those same corners of the industry. Described as fan clubs with bank accounts, these “decentralized autonomous organizations” are in many ways the latest take on the old co-op model, where responsibilities, revenues and decision-making are ultimately controlled by those holding tokens in their crypto wallets.
And the ability of these organizations to foster music-centered communities while building revenue-generating businesses has been proven in part with the success of DAOs like Friends With Benefits, Water & Music and Songclub.
The immediate instinct of artists might be to chafe at the idea of “randos” making decisions regarding their music. But is it really different from the random employees who make up the staff at any company? Especially with the high churn of the music biz.
Ultimately, the value of an artist’s work is determined by how fans interact with that work. Giving ultimate control of that work directly to fans could turn out to be the cleanest way for an artist to part with their IP when the time comes.
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Salient statements from this week’s music news.
The concert business could be holding on for dear life.
Takeaway: Multiple booking agents and promoters tell Hypebot that 20-40% of the fans who previously bought tickets are opting not to attend, even when no refunds are offered. Those same sources tell Hypebot that as much as 50% of shows booked for January are canceling or postponing because of COVID.
Farewell to the funky little speaker.
Takeaway: While Apple continued building out the Beats product portfolio for hearables, it left the portable speaker segment to deteriorate.
Every item left behind by legendary artists, from intellectual property to personal possessions, can become items of contention.
Takeaway: The Tupac Shakur Foundation accused Tom Whalley, who has been the executor of Tupac’s estate since Afeni’s death in 2016, of taking $5.5 million over the past five years from Amaru Entertainment, a record label founded by Afeni and now managed by Whalley that is charged with Tupac’s classic LPs and posthumous albums.