Zimmy, patriarch of the Dylanites (and Old Dinosaur for many others), has sold 600 songs of his to United Artists for £227M. Let's be clear: the intellectual rights of Visions of Johanna and Talking WWIII Blues (“in my Cadillac, good car to drive, after a war”) are priceless, but… let's talk about it.
Firsly, let me say this is high time for buying “song catalogs,” even if best results come with at least one billion in cash. Titles are falling down like dead flies: Fleetwood Mac songs, Fever, What A Wonderful World, Lil Wayne's, you name it.
One reason of this gigantic sell-out is... Covid lockdowns. The disappearance of any income from concert engagements has impacted badly on musicians' savings, as income from streaming is very limited for most artists.
In fact when the Guardian says that “legal streaming services (…) continue to be the salvation of artists,” it tells a half-truth. Because (to date) platforms show very little consideration for the artistic rights. It's already a great deal for artists to get... 1% of sales (e.g. Spotify - 2018 data - pays between $0.006 and $0.0084 per piece.)
Ed O'Brien of Radiohead (whose buddy York had defined streaming in '13 as "the last desperate fart of a dying body") went with other colleagues, including the English Nadine Shah (singer with over 100,000 plays/month on Spotify) to testify about the situation in front of a parliamentary committee.
Nadine and the others explained to the politicians how the royalty system is unfair and favors the big names (the "winner takes it all" system). Then Nadine went back home... to her parents, no longer able to afford the rent: "not a good look for a pop star" she wrote.
The other way to look at fair practices is by noting that the music industry''s profits and sales have never been so good: streaming is very affordable: you can celebrate with pennies... so you party and live and when you're sad... the same, you listen to music.
Both in digital (in June 2020, Spotify recorded a 29% growth, year on year), and globally (+ 44% from 2013 to 2019) thanks to the growing active fleet of smart-phones (one billion sold in 2020 alone) and globalization, turnover and profits in the sector have risen, and 2020 will be even better.
A further reason is that fees are not due to many of the artists with "pre-digital" contracts. Which could explain David Crosby's recent tweet in which he said "without savings and without a pension", "because streaming took away my record money and I have children and a mortgage to pay" - in short, he's for sale.
Neil Young is no longer on sale, for now: he sold 'just' half of his intellectual property on the Epiphany 2021, to Merck Mercuriadis (56), former manager of Elton John and Beyoncé, and now head of the Hipgnosis Songs Fund, the largest “pure aggregator of musical copyrights.” Which (as of 30/9/20) had invested £1.18 billion for 57,836 songs (average: approx. £22,000 per song) of which 5% (were) “number 1” and 18% “Top 10.”
Each song is paid a number equivalent of “years of profits” i.e. the infamous “EBIT(DA) multiplier.” On average for Mercuriadis was x14.76 (but some hits were paid even 22 years of profits.) Finally, 1/3 of the songs were written more than ten years ago (and 59% between 3 and 10 years.) Since the initial listing on the stock exchange (2018) the stock has risen by 21%.
The Hipgnosis case has demonstrated a few things for now:
1) ‘oldies but goldies’. (The Beatles are the 2nd artist with the most records sold in the 21st century; the 1st? Eminem.)
2) All kinds of artists tend to sell more since the appearance of streaming: e.g. annual sales of Livin’ On A Prayer (Bon Jovi, 1986) has increased by 53% in 7 years.
3) The US/UK finance world (with its global clout) and the current trend towards “rationalising” entire sectors of activity (or: generating monopolies) are both used by people like Mercuriadis, who resort to financial leverage to buy into a dominant position by 'mortgaging' years of profits in change of a solid asset. In this way
4) Hipgnosis data indicates an average income of £1382/year for each song by a successful author (= approx. 230,000 average streams/year per song.)
In New York, where you need to earn at least $250,000/year to be “middle class” (= at least 40M streams/year) it is clear that the platforms allow few artists to improve (or maintain) their social status. For most r'n'r is not a real job.
5) Platforms would seem not to be diligent payers: due to ‘technical’ problems, they have set aside fees for $2.5B waiting for a legitimate artist to give it to. And if I wanted to have my bank statement ‘audited’ (if I have the right to it under the contract) that’s tens of thousands of dollars. And hundreds of thousands of dollars for entering a claim in a US tribunal.
For these reasons, selling to a company like Hipgnosis, BMG Rights Management or Kobalt (or one of the three majors, like Zimmy) becomes a call of duty, rather than a free choice. Otherwise you can entrust part of the profits to another platform, like paperchain.io, which promises to connect you (for a fee) to your “live” earnings, even instantly advancing them at a 1% monthly rate if you want.
In short, for Mercuriadis and the small artists the motto is similar: “I exist - if I can get loans.”
--------------