I just read that Sony bought the rights to Pink Floyd’s catalog for something like $400 million. They also bought Bruce Springsteen’s catalog for around $500 million. That’s close to $1 billion for just two artists. There’s a whole bunch of other artists who are also getting bought out which brings the grand total to billions of dollars.
How are these companies getting the money to pay these crazy sums?
What is their plan to make that money back? Commercials and film placement?
Seems like you’d have to wait a veeeery long time to recoup these investments.
In: Economics
Acquiring the publishing rights isn’t just film and TV licensing. They’re collecting revenue every time those songs are played on the radio, in a retail store, at a bar, streamed on a music service, used on YouTube, reprinted as sheet music, played through a birthday card, etc.
Long term, Sony can afford to recoup that investment over the span of several decades, just like a bank can wait 30 years for you to repay your mortgage. An artist in their 70s or 80s might be more focused on the short term.
If nobody is buying physical albums, you’re getting too old to tour, and your living heirs don’t possess the ability nor desire to administrate your music catalog, then selling it to the highest bidder can be seen as an attractive option.
Publishers like Sony and Universal already know what a catalog is generally worth as an investment, because they’re already getting paid a percentage of the royalties to service it on behalf of the artist, i.e. deal with TikTok, YouTube, Apple, Spotify, foreign markets, promotion, collect royalties, protect copyrights, issue DMCA takedowns, provide legal services, etc.
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