Updated: January 26, 2022 10:11:08 am
The Nobel Prize winning singer-songwriter Bob Dylan has sold his entire back catalogue of recorded music and rights to some future releases to Sony Music Entertainment. As per Variety, which broke the news of the acquisition, the deal is reportedly worth between $150-$200 million and involves Dylan’s recorded songs from 1962 onwards.
In December 2020, the Universal Music Publishing Group bought the rights and royalties from Dylan of more than 600 of his songs for a reported figure of $400 million.
In December 2021, American rock star Bruce Springsteen sold his entire music catalogue to Sony Music Entertainment for over $500 million. His catalogue includes the 15-times platinum album called “Born In The USA” and the five-times platinum ‘The River.’ Platinum is an award given to a musician when his or her album or single records a sale of more than a million copies.
Some other recent catalogue acquisitions include the one between American musician Paul Simon and Sony in March 2021 and the January 2021 deal between Shakira and Hipgnosis.
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So how do music rights work?
Music rights or copyright refer to the intellectual property rights of the music created. Royalties refer to what someone has to pay to the rights owner if they want to use the music commercially. Any recorded piece of music has two copyrights, first being the rights to the recording of the music (also called masters) and second being the right to the composition.
If an artist A records a piece of music, he or she will sign a contract with their label, and usually, the label owns the copyrights.
This is the reason that Taylor Swift is re-recording songs she sang before 2019. When she signed contracts for those albums, she did not own rights to the recordings (masters). By re-recording, Swift will now own the masters and therefore have complete control of her work. In the case of Jimi Hendrix’s recorded version of the track “All Along the Watchtower”, a song originally recorded and written by Dylan, the composition rights are held by the latter.
To understand how revenues are made, let’s first look at the royalties. To take an example, the music streaming service Spotify pays a recording royalty for recordings that are streamed on the platform. Essentially, this is money that the platform pays to the artiste through the license holder that delivers the music, which is mostly the record label or distributor.
A second type of royalty is called the publishing royalty, which is the money owed to the songwriter or owner of the composition. So for the track “All Along the Watchtower”, Spotify would pay the publishing royalty to Dylan, the composer of the song.
Why are catalogue acquisitions soaring now?
According to Billboard, which first reported the Bruce Springsteen catalogue sale deal, Sony had been in negotiations with Springsteen, one of the “superstar artists” associated with Columbia Records and Sony Music, who were offered a “rare concession” during the 1980s and 1990s music sale boom, so that they could be re-signed.
This concession meant that these artistes, including Springsteen, Michael Jackson, AC/DC and Pink Floyd, owned their earlier albums. Now, some major labels are paying hefty sums to these artistes to get back the ownership rights.
According to the Recording Industry Association of America (RIAA), during the 1970s, the popularity of disco music led to a huge boom in music sales and in the 1980s, a boom in music sales was encouraged by the development of CDs.
But what’s driving the “catalogue acquisition boom” now? One reason may be Covid-19, because of which musicians have not been able to go on tours and hence had to forego the associated income, as per Rolling Stones magazine.
Another reason could be the growth of music streaming services, which have made music catalogues really valuable. According to Spotify, streaming represents 50 per cent of the recorded music revenue.
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