MBW Reacts is a sequence of brief remark items from the MBW group. They’re our ‘fast take’ reactions – by a music biz lens – to main leisure information tales.
Tens of millions of younger individuals are listening to Kate Bush’s Working Up That Hill for the primary time.
They could have pored over the lyrics. They could have checked Wiki, and discovered that it was 100% written, and produced, by Kate Bush. They could have completed a TikTok,
However I’d wager they in all probability haven’t marvelled as a lot as I’ve over what, from my tower of music biz geekery, is probably the most attention-grabbing little bit of details about the monitor on Spotify.
“(P) The copyright on this sound recording is owned by Noble And Brite.”
Sure. Kate Bush owns your complete recording copyright to Working Up That Hill, in addition to the Hounds Of Love album, and the remainder of her greatest hits.
These hits are distributed by Warner Music Group. However they’re owned by Kate Bush.
They’re not even credited as being licensed to anybody.
An informed guess, then: Kate Bush might be making the bulk – presumably at the same time as a lot as 80%-plus, if she’s on a fundamental distribution deal – of the recorded music royalties generated by her masters proper now.
Final week, Working Up That Hill did 57 million chart-eligible international streams on Spotify alone.
That will, at tough trade estimates, translate to over $200,000 in recorded music royalties from one platform, on one format (streaming), in a single week.
One million music biz questions rush into view. For instance, by the lens of the music biz catalog acquisition craze:
- Would Kate Bush have thought of promoting her recordings earlier than Stranger Issues propelled Working Up That Hill to the No.1 streaming monitor globally?
- Was she within the course of of getting these sort of conversations earlier than a Netflix music supervisor and a few must-see-TV threw all of the numbers in such a potential deal out the window?
- How a lot extra is Kate Bush’s recorded catalog value now she’s (okay, quickly) Larger Than Dangerous Bunny?
It’s additionally attention-grabbing to take a look at this through certainly one of 2013’s greatest music trade tales, when Warner Music Group acquired Parlophone Label Group for GBP £487 million.
When Warner accomplished its PLG buyout, it introduced: “PLG’s artist roster and catalog of recordings contains, amongst many others… David Guetta, Pablo Alborán, M. Pokora, Raphael, Mariza, David Bowie, Radiohead, Tina Turner, Iron Maiden, Pink Floyd, Duran Duran, Jethro Tull, Blur, Kate Bush, Daft Punk, Edith Piaf, Itzhak Perlman and Maria Callas.”
I’ve bolded up just a few names there. Guess why?
- The grasp recording possession rights to David Guetta’s catalog reverted to the artist over the previous decade. We all know this as a result of Guetta bought his masters ‘again’ to Warner Music Group for over $100 million final yr;
- The underlying grasp recording possession rights to (most of) David Bowie’s catalog have lengthy been owned by the artist and his property. That is well-known. Exemplifying the very fact, the Bowie property final yr introduced a career-spanning distribution take care of Warner Music Group for his masters. WMG additionally acquired Bowie’s music rights;
- Pink Floyd’s underlying recorded music rights are the subject of fevered music trade hypothesis proper now. The most recent that MBW hears: Floyd’s career-spanning recorded music rights, bundled with their neighbouring rights plus identify & likeness rights, are being chased for acquisition by the three main music corporations (Common, Sony, Warner) plus BMG. One well-informed supply instructed us this week that Floyd will now look to drop certainly one of this group of 4 from a particularly aggressive bidding course of. One other well-informed determine instructed us it’s completely doable that Floyd will command a USD $600 million deal by the point the public sale is thru;
- After which, there’s Kate Bush. Who, as we’ve established, owns her personal recording rights, through Noble & Brite Ltd – an organization through which she owns 100%, and which, in response to UK Firms Home, had GBP £2.37 million in money on its stability sheet on the shut of Could 2021. We count on that determine to develop to a somewhat bigger sum following the star’s chart-topping success this summer season.
These Warner-associated artists by far aren’t the one catalog megastars sitting on an owned recordings portfolio value mind-blowing sums of cash in 2022.
Could we as soon as once more level you to Queen, who, it’s understood, personal their recordings catalog worldwide exterior of North America (the place it’s owned by Disney Music Group / Hollywood Information) through Queen Productions Ltd.
Queen license their recordings to Common Music Group for many of the world, however the band (and Freddie Mercury’s property) personal the underlying copyrights.
If Queen was ever to promote these underlying copyrights, MBW estimated final yr, particularly in the event that they included publishing rights too (at the moment owned by the band however admin’d by Sony Music Publishing) we could possibly be taking a look at music’s first billion dollar-plus, single-artist catalog acquisition story.
It’s not simply ‘catalog’ artists that this narrative – of artists independently proudly owning their underlying recordings copyrights – impacts, both.
Drake lately inked a take care of Common Music Group that was reportedly within the area of $400 million. He was famously signed for a few years to an advanced mixture of Younger Cash, Money Cash and UMG/Republic Information.
However Drake’s newer materials, together with final yr’s Licensed Lover Boy, carries this credit score on streaming companies: “OVO, below unique license to Republic Information.”
OVO is Drake’s personal document firm.
And it’s right here the place issues begin getting extra difficult: Now we have no indication of how lengthy Drake’s owned recordings are licensed to Republic, or what the income break up is in that settlement.
All we might be positive of is that some day sooner or later, Drake – or Drake’s property – will recapture possession of the rights to those OVO information.
It’s an identical state of affairs for Kate Bush’s present chart sparring companion, Harry Types, whose hit solo recordings are owned by: “Erskine Information Restricted, below unique license to Columbia Information.”
Once more, we don’t know the way lengthy this license lasts, nor what proportion Harry will get versus Columbia. However we do know that, ultimately, someday, Erskine Information Ltd will get these rights again.
(Erskine Information Ltd, in response to UK Firms Home, was sitting on GBP £12.08 million in money on the shut of March this yr. Harry Types; no idiot.)
It’s the identical story for Adele‘s record-breaking 30 album: “Melted Stone below unique license to Columbia Information.”
(Adele’s earlier recordings seem like owned by XL/Beggars exterior the US and Latin America, and by Sony Music in these territories. Adele’s Melted Stone Ltd, by the best way, had GBP £15.6 million in money on its stability sheet on the shut of 2020, its final printed accounts. Adele; no idiot.)
Three extra examples of giant fashionable superstars whose recordings copyrights credit on streaming companies don’t even point out ‘licensed by”:
- The Weeknd (owned by the artist’s XO Inc., however “marketed by Republic Information”);
- Dangerous Bunny (owned by the artist’s Rimas Leisure, distributed by Sony’s The Orchard);
- Taylor Swift (whose most up-to-date recordings – together with these re-recordings – are famously owned by the artist, with a partnership in place with Republic Information).
Is there some extent to all of this? Too many!
For one factor, consultants who thought the catalog acquisition increase would die down following all these main publishing sale offers (Bob Dylan, David Bowie, Paul Simon), might need to brace themselves for a rights acquisitions market the place basic grasp recordings (hiya Kate Bush! Pink Floyd! Aerosmith!) begin turning into extra available for buy at eye-watering costs.
Don’t neglect that no lesser idols than Bruce Springsteen and Bob Dylan have each bought their recordings catalogs (having additionally bought inheritor music catalogs) for nine-figure sums up to now 18 months.
Now Pink Floyd are getting in on the recording rights-sale recreation… at over half a billion {dollars}.
If the present macro-economic local weather permits, you’ll be able to count on to see extra of those massive-money recordings offers hitting MBW’s headlines.
One different thought this places in my head is the key document corporations, and their enterprise fashions.
The bearish view there may be they’re being chomped at each ends: Basic recordings by the likes of Kate Bush and David Bowie are falling again into the arms of the artists / their estates; in the meantime, fashionable frontline superstars are utilizing their leverage to cement long-term possession of underlying rights for themselves.
The bullish view: The majors are hitting document earnings through a mix of owned, licensed, and distributed content material. There’s an unlimited array of deal varieties working throughout these three buckets, with an unlimited array of margin percentages at play too. But if the majors are ending up proudly owning much less music in perpetuity, it doesn’t appear to be dissolving their backside strains: Could we remind you that UMG has pledged to its traders that it’ll hit a mid-20-percent EBITDA margin (and pay out a 50%-of-net-profit dividend to shareholders) over the following few years.
It’s undoubtedly getting more durable for the majors to personal profitable artists’ underlying rights long-term.
However their focus is more and more shifting to maximizing efficiency and earnings in the course of the interval below which they’re getting a higher-margin on rights in these offers. (For instance, in the course of the interval of a long-term licensing settlement with a pop star like Harry Types.)
One ultimate perspective on all of this.
Simply as we will argue that the majors are getting nibbled at each ends by these traits, then it should even be true that anti-competitive accusations of the three main music corporations “proudly owning the whole lot” are additionally turning into much less true.
The UK’s Competitors and Markets Authority (CMA) is at the moment operating a market research on your complete recorded music ecosystem to see if there are any abuses of energy, and, particularly, if the key music corporations are unjustly controlling widespread music.
That’s a good thesis for an investigation.
However how a lot unjust management can the majors actually have, when the story of 2022’s pop trade is a FAANG tech big (Netflix) air-rocketing a music owned by an unbiased, copyright-owning artist (Kate Bush) to the worldwide streaming No.1?
Whether or not you’re a long-term investor or anti-competitive watchdog, a real understanding of the key document corporations – and the extent of possession they’ve over the largest information of all time – can solely really be reached by digging round below the hood of those companies.
While you accomplish that, very often, you will see that the historic story of celebrity artists (new and ‘previous’) being owned by (and indentured to) main document corporations is quick turning into a nonsensical story in 2022.
“These celebrity artists, with leverage popping out of their ears, are operating unbiased companies that maintain tens of thousands and thousands of {dollars} in money.”
These celebrity artists, with leverage popping out of their ears, are operating unbiased companies that maintain tens of thousands and thousands of {dollars} in money.
They’re proudly owning their underlying rights. And ultimately, they’re promoting their underlying rights too.
More and more, it’s the main document corporations who’re having to show their value and international value-add to profitable artists, not the opposite manner round.
That’s how the stability of energy ought to have appeared again in 1985, when Kate Bush first had a Prime 5 hit with Working Up That Hill.
How satisfying it should be for her in 2022, as she soars to No.1 everywhere in the globe, to know that she not solely wrote, carried out, and produced this evergreen basic – however that, in the present day, it’s all hers, and no-one can take it from her.Music Enterprise Worldwide
