The pandemic, Trump tax breaks, and bunk streaming deals are pushing artists to sell their catalogs for big bucks, real fast.
By King Lars
There has been some buzz recently about big-time musical artists selling their back catalog of hits. Perhaps the most acclaimed is Bob Dylan, who recently sold his massive catalog spanning 60 years to Universal Music Publishing Group for a whopping $600 million. Others have followed suit, including Stevie Nicks, David Crosby, and Lil Wayne, who all recently made similar moves.
What is driving artists to relinquish the rights to their own songs? Well, as is the case with all the problems currently going on across the globe, many are quick to blame the COVID-19 pandemic.
Certainly, the pandemic brought an end to live music in any significant form. In lieu of live performances, music publishing has become particularly lucrative. In fact, catalogs are being bought and sold for nearly 30 times their value. Bets are being made that the real money can be made through licensing deals in media, as streaming — the predominant method of listening to music — pays less and less to artists, giving the lion’s share to the labels.
Industry experts have argued that this current explosion in catalog deals is attributable to the incoming Biden presidency. It is no secret that the Trump era has been one of amenable tax benefits across the board, and many reports have shown that a Biden administration will be less favorable to those in the upper-income brackets. Those making more than $3.3 million a year are forecasted to pay 43% in taxes compared to the 30.6% tax-rate set under the Trump administration.
To put it simply, how the Biden administration handles capital gains tax could make or break this growing trend toward ‘song management’ vs ‘artist management’ in the music industry.
It is a reality that music is just not as profitable for artists as it once was. With changes in how music is consumed by the public, many artists have been hit hard.
Even household names David Crosby, of Crosby, Stills, Young, and Nash and the Byrds fame, is feeling the brunt of the changing landscape of the music industry. In recent tweets, Crosby revealed that he has chosen to sell his catalog because he can no longer rely on live performances to pay the bills, claiming that “I can’t work …and streaming stole my record money …I have a family and a mortgage and I have to take care of them so it’s my only option… if we could get paid for records and play Live we would not be doing it. None of us.”
Many musicians have been forced to take a closer look at their books in the wake of the coronavirus pandemic. Nile Rogers, who contributed to hits including David Bowie’s ‘Let’s Dance’ and Madonna’s ‘Like a Virgin,’ was “completely shocked” when he looked into his streaming figures after the eradication of live music, which had previously been the artist’s primary source of income. The current streaming system provides nearly 82% of income to the labels, leaving the artist with a fraction of a cent per play, and this has resulted in many hit artists in the United Kingdom reportedly “driving Ubers” in order to make ends meet.
One common theme of the COVID-era is that those on top get richer, while everyone else outside the one percent feels the brunt of the economic impact.