What to Know About Music’s Copyright Gold Rush

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Neil Young, Lindsey Buckingham, Shakira, and others recently sold their song catalogs to the flashy music publishing upstart Hipgnosis, in deals that have implications for the future of the recording industry.

Graphic by Drew Litowitz

Last month, news broke that Bob Dylan sold his songwriting catalog to Universal’s publishing arm in a deal reportedly worth more than $300 million. Although the singer-songwriter has been a renowned harbinger of epochal shifts for nearly 50 years, the move was merely the most illustrious in an ongoing frenzy of music copyright acquisitions. In the weeks since Dylan’s announcement, the likes of Neil Young, Lindsey Buckingham, and Shakira have sold the rights to their songs to a relatively new buyer on the scene: Hipgnosis Songs Fund, an investment company founded in 2018 by former artist manager and label head Merck Mercuriadis. With a name cribbed from the groundbreaking album-art designers behind Dark Side of the Moon, Hipgnosis is following in the footsteps of many self-consciously disruptive companies as it targets a long-unsexy segment of the music business.

What’s physically changing hands may be little more than lists of song titles in filing cabinets, as The New York Times’ Ben Sisario recently pointed out in a podcast on this subject. But what’s at stake is nothing less than control of the popular music canon. Some investors compare songs to real estate, because (financially speaking, at least) both are assets that are expected to generate predictable income over time. But while the supply of land is pretty fixed, artists keep churning out more and more music every year. And despite the occasional delightful rediscovery, like TikTok going nuts over Life Without Buildings, only a tiny sliver of that new music ends up being played again and again long into the future. By the market’s logic, the most lucrative bet is buying the songs that are already proven winners, and there are only so many of those to go around.

Meanwhile, the big three music publishers—Universal Music Publishing Group, Warner/Chappell, and Sony/ATV—have seen increasing competition from other traditional publishers like Concord Music Group, Downtown Music Publishing, Kobalt Music Group, and Primary Wave, as industry observer Cherie Hu has written. But financial interest in songs has also grown among private-equity firms, pension funds, and, through Hipgnosis’s 2018 listing on the London Stock Exchange, everyday punters trying to play the market. Mercuriadis isn’t even the only former label honcho getting into the mix.

At first blush, the fact that songs are apparently valuable enough to inspire a 21st-century gold rush seems worth applauding. But allowing the fate of classic songs like “Only Love Can Break Your Heart” or “Landslide” to be interpreted mainly through the philistine prism of Wall Street (almost literally, treating music like an oil well) feels wrong. For music lovers without a vast fortune lying around, bigger concerns may include how such mega-deals could affect the music’s cultural impact, and what any of this means for the many musicians struggling to merely scrape by.

First, a quick refresher on how music copyright works, because it’s absurdly complicated. There are two types of copyrights in the music industry. One set of rights is for the song or musical composition, also called the “publishing,” which means the underlying music and lyrics—essentially, whatever could be written down as traditional sheet music. The other is for the sound recording, or “master,” which is the finished track that ends up on streaming platforms. Contracts vary, but the songwriting copyright is typically co-owned by the songwriter and a publisher, which is a business that helps the songwriter collect royalties. To massively over-simplify: If you write a song and I record a cover of it, you’ll get the song royalties (with a share going to your publisher) and I’ll get the master royalties (with a share going to my record label). Song rights break down further into mechanical rights from streams or physical sales, performance rights from radio play or live renditions, and synchronization rights when music appears in TV shows, films, or commercials. Long story short, owning the publishing to songs that generate popular covers and turn up across visual media can add up to steady income over the long run.

 

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