MBW Reacts is a sequence of quick remark items from the MBW crew. They’re our ‘fast take’ reactions – by a music biz lens – to main leisure information tales.
Hundreds of thousands of younger persons are listening to Kate Bush’s Working Up That Hill for the primary time.
They might have pored over the lyrics. They might have checked Wiki, and realized that it was 100% written, and produced, by Kate Bush. They might have finished a TikTok.
However I’d wager they most likely haven’t marvelled as a lot as I’ve over what, from my tower of music biz geekery, is essentially the most attention-grabbing little bit of details about the observe on Spotify.
“(P) The copyright on this sound recording is owned by Noble And Brite.”
Sure. Kate Bush owns all the recording copyright to Working Up That Hill, in addition to the Hounds Of Love album, and the remainder of her largest 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 shall be making the bulk – probably whilst a lot as 80%-plus, if she’s on a primary distribution deal – of the recorded music royalties generated by her masters proper now.
Final week, Working Up That Hill did 57 million chart-eligible world streams on Spotify alone.
That may, 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-about promoting her recordings earlier than Stranger Issues propelled Working Up That Hill to the No.1 streaming observe globally?
- Was she within the course of of getting these form 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 Unhealthy Bunny?
It’s additionally attention-grabbing to have a look at this through one in every of 2013’s largest 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 consists of, 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 a number of 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 offered his masters ‘again’ to Warner Music Group for over $100 million final 12 months;
- 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 12 months introduced a career-spanning distribution take care of Warner Music Group for his masters. WMG additionally acquired Bowie’s track rights;
- Pink Floyd’s underlying recorded music rights are the subject of fevered music trade hypothesis proper now. The newest 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 firms (Common, Sony, Warner) plus BMG. One well-informed supply instructed us this week that Floyd will now look to drop one in every of this group of 4 from an especially aggressive bidding course of. One other well-informed determine instructed us it’s fully potential 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 by which she owns 100%, and which, in keeping with UK Corporations Home, had GBP £2.37 million in money on its stability sheet on the shut of Might 2021. We count on that determine to develop to a fairly bigger sum following the star’s chart-topping success this summer time.
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.
Might we as soon as once more level you to Queen, who, it’s understood, personal their recordings catalog worldwide outdoors 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 12 months, 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 might 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 12 months’s Licensed Lover Boy, carries this credit score on streaming companies: “OVO, below unique license to Republic Information.”
OVO is Drake’s personal file 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 certain 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 analogous state of affairs for Kate Bush’s present chart sparring associate, Harry Types, whose hit solo recordings are owned by: “Erskine Information Restricted, below unique license to Columbia Information.”
Once more, we don’t understand how lengthy this license lasts, nor what proportion Harry will get versus Columbia. However we do know that, ultimately, in the future, Erskine Information Ltd will get these rights again.
(Erskine Information Ltd, in keeping with UK Corporations Home, was sitting on GBP £12.08 million in money on the shut of March this 12 months. Harry Types; no idiot.)
It’s the identical story for Adele‘s record-breaking 30 album: “Melted Stone below unique license to Columbia Information.”
(The rights to Adele’s earlier recordings are owned by XL/Beggars worldwide. 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 revealed accounts. Adele; no idiot.)
Three extra examples of big trendy superstars whose recordings copyright 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”);
- Unhealthy 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 a degree 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), could wish to brace themselves for a rights acquisitions market the place traditional grasp recordings (hey 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 offered their recordings catalogs (having additionally offered their track catalogs) for nine-figure sums up to now 18 months.
Now Pink Floyd are getting in on the recording rights-sale sport… 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 file firms, and their enterprise fashions.
The bearish view there’s they’re being chomped at each ends: Traditional recordings by the likes of Kate Bush and David Bowie are falling again into the arms of the artists / their estates; in the meantime, trendy frontline superstars are utilizing their leverage to cement long-term possession of underlying rights for themselves.
The bullish view: The majors are hitting file income through a mixture of owned, licensed, and distributed content material. There’s an unlimited array of deal sorts 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 traces: Might we remind you that UMG has pledged to its buyers 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 tougher for the majors to personal profitable artists’ underlying rights long-term.
However their focus is more and more shifting to maximizing efficiency and income through the interval below which they’re getting a higher-margin on rights in these offers. (For instance, through 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 are able to argue that the majors are getting nibbled at each ends by these developments, then it should even be true that anti-competitive accusations of the three main music firms “proudly owning every thing” are additionally turning into much less true.
The UK’s Competitors and Markets Authority (CMA) is at the moment operating a market research on all the recorded music ecosystem to see if there are any abuses of energy, and, particularly, if the key music firms are unjustly controlling in style 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 large (Netflix) air-rocketing a track owned by an impartial, 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 correct understanding of the key file firms – and the extent of possession they’ve over the largest information of all time – can solely be reached by digging round below the hood of those companies.
If you achieve this, very often, you’ll discover that the historic story of celebrity artists (new and ‘outdated’) being owned by (and indentured to) main file firms is quick turning into a nonsensical story in 2022.
“These celebrity artists, with leverage popping out of their ears, are operating impartial companies that maintain tens of tens of millions of {dollars} in money.”
These celebrity artists, with leverage popping out of their ears, are operating impartial companies that maintain tens of tens of millions 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 file firms who’re having to show their value and world value-add to profitable artists, not the opposite method round.
That’s how the stability of energy ought to have seemed again in 1985, when Kate Bush first had a Prime 5 hit with Working Up That Hill.
How satisfying it have to 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 traditional – however that, right now, it’s all hers, and no-one can take it from her.Music Enterprise Worldwide
