Highly decorated songwriting veterans such as Bob Dylan, Neil Young or Stevie Nicks may be some of the most prominent musicians who have recently sold rights to their works.

They are far from being alone.

Various younger musicians such as Shakira or Imagine Dragons have also parted ways with individual rights and the associated royalties in the past few months in return for a substantial one-off payment.

Benjamin Fischer

Editor in business.

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    Now David Guetta is joining this group: the rights to the music recordings of the "past two decades" of the French star DJ and producer go to the Warner Music Group, as both parties announced on Thursday. Part of the deal is the continued collaboration for future releases by the 57-year-old artist. According to the announcement, Guetta has sold around 50 million records so far. His catalog has currently been streamed more than 14 billion times.

    As the artist's manager, Jean-Charles Carré, explained, many prospective buyers approached them: “However, we decided to continue working with Warner because they have knowledge of and passion for David's music, with a global team that is constantly working on placing them in new surroundings. " 

    Financial investors are also reaching for hits

    As is usually the case with such deals, nothing was communicated about the purchase price. While the Financial Times, which first reported the sale, cited a source that put the price at more than $ 100 million, industry website Variety cited multiple sources that it was "definitely" less than $ 100 million. However, the price should be classified in this range. The fact that with the agreement on the “Innovative Career-Spanning Partnership” the existing cooperation will also be continued for future recordings makes the question of price even more complicated.

    The global market for music recordings has been growing again for years, primarily due to streaming. Most recently, sales amounted to $ 21.6 billion, an increase of 7.4 percent compared to 2019 - the highest value since 2002. This development has also shifted the focus of financially strong players outside the industry more strongly to music. Catalogs with long-established hits, which will continue to be popular in a few years' time and should therefore bring in money, are particularly popular and are considered a safe investment. By placing in series, advertising, video games, other digital channels or simply further growth in the streaming area, the annual revenue can sometimes even be increased, according to the buyers' calculation. 

    The Hipgnosis fund of the former artist manager Merck Mercuriadis, one of the busiest rights buyers in recent years, which is listed on the London Stock Exchange, has spent more than $ 1.5 billion on individual rights to currently around 64,500 songs since it was founded in mid-2018 - including works by Blondie, RZA or Neil Young. In the middle of the week, the fund announced that it would raise another $ 210 million for further acquisitions by issuing new shares.

    The competition for coveted catalogs is fierce.

    Sony, for example, recently acquired the author catalog from Paul Simon, Concord Music took over the rights to 145,000 works from Downtown Music and by the end of March the Bertelsmann music division and the financial investor KKR had teamed up for catalog purchases of all kinds.

    The list could be extended significantly.

    The prices are now correspondingly stately.

    Guetta does not sell author rights

    For example, Hipgnosis is said to have paid $ 150 million in January for 50 percent of the rights to the texts and compositions of 1180 Neil Young songs.

    The price for the author's rights to more than 600 Bob Dylan works, which went to the publishing division of Universal Music in December, is estimated at up to 400 million dollars. 

    Whoever holds the author's rights or part of these rights to a song is involved in any use of the underlying texts or compositions - for example, in the case of cover versions, which are sometimes more successful than the original version. The majority of catalog sales are currently about such rights - often also from prominent songwriters who do not or hardly appear as interpreters themselves, but who work with stars or write for them.

    In the case of Guetta, however, Warner, the smallest of the three large global music companies behind Sony and industry leader Universal Music, only buys the rights to the recordings, which Dylan, Young and Co, in turn, have not sold. However, these master rights can be extremely attractive for investors, not least because significantly more royalties go to the label side or the owners of the rights to the recordings via Spotify & Co.: Of the around two thirds of their income that the streaming services go to the rights holders of the music pay off, a little more than 50 percent fall on the recording. Often, especially with older artists, the respective labels still hold long-term rights to the music recordings.