Bob Dylan: CULVER CITY, CA – JUNE 11: Musician Bob Dylan performs onstage during the AFI Life Achievement Award: A Tribute to Michael Douglas at Sony Pictures Studios on June 11, 2009 in Culver City, California. (Photo by Kevin Winter/Getty Images for AFI).
Stevie Nicks: LAS VEGAS, NV – SEPTEMBER 21: (EDITORIAL USE ONLY; NO COMMERCIAL USE) Stevie Nicks of Fleetwood Mac performs onstage during the 2018 iHeartRadio Music Festival at T-Mobile Arena on September 21, 2018 in Las Vegas, Nevada. (Photo by Kevin Winter/Getty Images for iHeartMedia).
Neil Young: LONDON, ENGLAND – JULY 12: Neil Young performs on stage in Hyde Park on July 12, 2019 in London, England. (Photo by Matthew Baker/Getty Images).
You’ve probably been hearing about this in the news lately: rock stars selling off the rights to their music and cashing in. It’s true, and even writers and producers are all doing it. LoudWire recently revealed in a story that Metallica’s previous producer, Bob Rock, just sold his rights of the Black Album to the Hipgnosis Songs Fund. Rock has been producing in the music industry since the 80’s, working with groups like The Cult, Mötley Crüe, Michael Bublé, and more. And you may have heard that Bob Dylan sold his catalog for $300-$400 million, Neil Young sold his for around $150 million, and Stevie Nicks sold 80% of her rights for $100 million.
But why is this sales-a-palooza happening now? There are a few reasons, and they make pretty good sense. With the huge popularity of companies like Spotify and other streaming services, music now has a specific market value on each song based on the number of times it’s been listened to. This in turn allows artists to have a better idea of what their music is worth, which translates to future projections and tangible values. Another reason people are selling is that at this moment in time, interest rates are super low around the world (which means dollars can stretch even further). Due to the pandemic, most concerts and touring have stopped completely, leading many artists to look for new ways to generate revenue. In addition, capital gains tax could increase during the Biden Presidency, so people who make more than one million dollars per year would be affected (selling music rights falls under capital gains). And finally, artists don’t want their catalogs to be fought over when they die. It’s that simple. For more details, you can read the full article and explanation from MarketWatch here.
So what does this mean for the general public? We’ll very likely be hearing more of these artist’s songs in commercials, movies, TV shows, video games, and other forms of media. The new owners of the music control their fate and can give any entity permission to use the songs….for a price.