Good morning. For the last 15 years, Justin Bieber has been a mainstay of pop music. Rising above the surfeit of teeny-boppers discovered on YouTube in the mid-to-late 2000s, Bieber’s meteoric rise made him one of the most successful musicians of our time, all while his frontal lobe was still developing. Despite vitriol from critics, the Canadian musician has sold over 150m records worldwide, with all six of his albums going platinum or multi-platinum, all before the age of 30.
Now, Bieber has decided to cash in early, following a path usually reserved for older musicians such as Bob Dylan and Bruce Springsteen in selling the rights to his music. A long-rumoured $200m (£162m) deal with Hipgnosis Songs Capital covers more than 290 titles released before the end of 2021, with Universal Music Group retaining the rights to the master recordings. But beyond the blockbuster figures, the world of music catalogue acquisitions is a confusing, peculiar one, with companies paying premium prices and vacuuming up every hit they can find. I spoke to music business reporter Eamonn Forde about why more and more artists are selling up. That’s right after the headlines.
Five big stories
Police | The Metropolitan police commissioner, Mark Rowley, has predicted that “two to three” officers a week will face trial for crimes such as violence against women and dishonesty. Rowley has vowed to clean up the Met, as the force continues to be dogged by scandals.
Politics | At least 24 civil servants are involved in complaints against the deputy prime minister, Dominic Raab, the Guardian understands. The severity of some of the claims and the extent of the investigation have led to doubts from government insiders about how long Raab can stay in his position.
Crime | The father of Jake Davison, the man responsible for the Plymouth shooting, said he tried to warn police not to give his son a shotgun licence, telling the authorities that he lived in a “volatile environment”. Police revoked Davison’s licence in 2020 after he assaulted two teenagers in a park, but returned his shotgun in 2021 – weeks before the killings.
Society | The 2021 census has found that 16 to 24-year-olds are more than twice as likely to identify as lesbian, gay, bisexual or another minority sexual orientation than the overall population.
US | Civil rights groups and online safety advocates have roundly condemned Meta’s decision to allow Donald Trump back on Facebook and Instagram following a two-year ban. Meta’s president of global affairs, Nick Clegg, has written there are “new guardrails in place to deter repeat offences”.
In depth: ‘The money offered is so ridiculous you really have to have a good reason not to sell’
Vinyl, CDs, MP3s, piracy, streaming, back to vinyl – there are few sectors that have gone through as many changes as the music industry, with each marking a new era and often leading to significant restructuring within the business. So, what does this new period of siphoning tens of thousands of songs from the past mean for the industry’s future?
Why are these deals happening?
There are a multitude of reasons why companies are spending so much money on music catalogues. For one, for the first time in a long time, the industry is in a period of steady growth after a long period of decline. “Over the last seven or eight years, the record industry, which was previously seen as a very toxic and dangerous area of investment, has suddenly become fashionable again, essentially because of what’s happened in streaming,” says Eamonn. In the US, album consumption increased by 11% in 2021. In 2022, that number declined but was still steady, at 9.2%. And with TikTok propelling older tunes to the top of the charts, it’s no surprise that people are combing through back catalogues to find hits from previous decades.
So, as catalogues sell for unusually high valuations, it is pretty clear why artists are willing to hand over some or all of the rights to their music. “The money being offered is so ridiculous that you really would have to have a good reason not to sell or nerves of steel”, Eamonn says. In the past, catalogues would trade at “multiples” of nine or 10 times what they earned in the last 12 months after royalties were paid out to the performers and songwriters. In recent years those multiples have been rocketing: the Wall Street Journal reported that catalogues have been bought for as much as 30 times their average annual royalties.
Not only does it give musicians a huge payday, it also means that, for those who are in their twilight years, their families do not have to worry about navigating the minefield of the music industry. Their inheritance can be cash and stocks, instead of complicated music estates that leave them open to exploitation.
As for the businesses like Hipgnosis, these deals are proving to be lucrative because music is steady. Generally speaking, people listen to music when times are good and when times are bad. These deals are a way to reframe music royalties as an asset class unto themselves, not unlike gold or oil. But the sheer size of the deals have prompted many to ask whether they are overvalued or hyper-inflated.
But there are risks
In true disruptor fashion, Merck Mercuriadis, the co-founder of Hipgnosis (pictured above), has said that he wants to “destroy” the traditional model of music publishing. In its first two and a half years, his sharp-elbowed company spent $1.7bn on the rights to more than 57,000 songs. Its bullish attitude has attracted more people to the music catalogue market. By the end of 2021, that number had swelled to $2.5bn. But there have been many over-valued companies, and entire industries, that have realised that destabilising a sector is not necessarily a viable long-term business plan in and of itself.
The risks have been apparent for a while: “You’re not just paying at the top of the market, you’re paying at the top of a massively overinflated market,” says Eamonn. The money that is sloshing about is immense: Stevie Nicks sold her catalogue for $100m. Bob Dylan shed his for a cool $300m-400m. Bruce Springsteen tops the lot at $550m.
But as recession rears its ugly head, the market has started to cool down. It also remains to be seen whether companies like Hipgnosis can earn back the amount of money they are spending. After five years of investment and disruption, 2023 could be the year that their chickens come home to roost – are they going to sell, or will they stick it out and hold on to – and work on – these catalogues for 50 or 60 years?
… and long-term impacts
With all this fixation on buying up catalogues – both from relatively new players focusing on “song management”, and established music corporations –what will this mean for new artists? Because, no matter how good Dylan et al are, 60s and 70s rock anthems are not the only music that matters. “New artists are coming into an entirely new environment,” Eamonn says. “Publishers are going to have to react to what’s happening in the market and that might mean having to do deals where the [artists’] rights are given back to them after a shorter period of time or they pay them a much better royalty rate.” An unexpected consequence could be a more equitable industry for newer talent. Conversely, it also might mean that publishers who are spending huge sums of money on these catalogues will have less money to invest “in the short-term on the new stars of tomorrow,” Eamonn notes.
While there might be merit in wanting to invest in artists in an industry that has historically exploited them, ultimately it seems likely the rate of growth and the size of these deals are not sustainable. The industry is not a stranger to massive booms and even bigger busts. Whether or not this is another case of a bubble waiting to burst will become clear in the next couple of years. Indeed, says Eamonn: “This is a very strange moment for catalogue acquisition.”
What else we’ve been reading
Is sympathising with a fat person better than laughing at them? Phoebe Jane Boyd reflects on this flimsy Hollywood “progress” after Brendan Fraser earned an Oscar nomination for his fat-suited performance in The Whale. Toby Moses, head of newsletters
Heather Stewart went to Coventry to speak to the Amazon workers striking for the first time. “I wouldn’t advise a friend of mine to be a … warehouse operative for a long period of time,” one worker told researchers. “Health wise it’s not advisable, psychologically wise it’s not advisable, because at some point warehouses will be expecting [the] efficiency of robots from humans, so to speak.” Nimo
Finally something to point to as I refuse to declutter my life: Emine Saner tried the tenets of Marie Kondo to rid herself of all her stuff, only to end up buying most of it back from charity shops. “I didn’t follow her system properly – I kept stuff that didn’t ‘spark joy’, and got rid of things that probably would have, given the chance.” Toby
Calls have been reignited for gun control after four mass shootings left 25 people dead in California in just eight days. Lois Beckett and Sam Levin go into the communities affected and speak to the residents. Nimo
Jonathan Freedland’s warm recollection of Ian Black, the Guardian’s former Europe, diplomatic and Middle East editor who died this week, is a beautiful tribute to a journalist who managed to cover the most thorny of issues in the most elegant way imaginable: “Even if [Jews and Palestinians] rarely agreed on much else, they found common ground on this: when it came to coverage of the Middle East, you could trust Ian Black.” Toby
Football | Manchester United sailed to victory 3-0 against Nottingham Forest in the Carabao Cup, with a stunning opening goal from Marcus Rashford. There were further goals from Wout Weghorst and Bruno Fernandes that gave the team a comfortable lead ahead of the next leg at Old Trafford.
Tennis | Despite being the sixth seed, Andrey Rublev stood no chance against Novak Djokovic, who beat the Russian with relative ease 6-1, 6-2, 6-4, to return to the semi-finals of the Australian Open.
Football | In this week’s edition of the Guardian’s women’s football newsletter, Anita Asante writes about the joy and hardships that come with coaching, as an assistant at Bristol City. The former England international says the challenges have expanded her perspective and helped her understand the kind of football she likes to play. Sign up here to receive Moving the Goalposts every Wednesday.
The front pages
Our Guardian splash today is “Raab faces at least two dozen complaints in bullying inquiry”. The Metro has “Two to three cops in court a week” – its version of this story. Other front pages rumble with heavy metal for Ukraine, including the i: “Allies send tanks to hold back Putin – as Ukraine war escalates”. “Finally, the west unites to defend freedom” says the Daily Mail, crediting an intervention by Boris Johnson. “World united against evil” says the Daily Mirror. The Financial Times looks to the skies: “Lockheed ramps up F-16 production as Ukraine allies debate sending jets”. “How can this be the sad reality of our country” – the Daily Express says a woman of 87 died and paramedics are taking other elderly people to hospital because they’ve stopped heating their homes for fear of the cost. “Baffling Brexit plan undermines the UK, says M&S chief” is the lead story in the Telegraph. “Off with his ted” – the Sun says Prince Andrew and his teddy bears no longer have lodgings in Buck House. “Laughing gas ban to tackle bad behaviour” – the Times got that one.
Today in Focus
Why are British women travelling hundreds of miles for abortions?
Record numbers of abortions are being carried out and services are struggling to cope. Why is the system under so much pressure and what toll is it taking on women?
Cartoon of the day | Steve Bell on calls for Nadhim Zahawi to resign
A bit of good news to remind you that the world’s not all bad
It’s boom time for Scottish whisky, writes Chitra Ramaswamy, who visited the new £13.5m Port of Leith distillery in Edinburgh. In spite of Brexit, the pandemic and now a cost of living crisis, trade is booming, with co-founder Ian Stirling telling her that the business – the third distillery to open in the city in recent years – sees itself as part of a “new wave”.
Similarly, at Scotland’s oldest working distillery, Glenturret, managing director John Laurie echoed the sentiment that it is a golden age for the production of scotch: “There are 122 distilleries in Japan and it’s still one of our strongest markets. You can’t replace single malt scotch. It’s the gold standard and it can only be made in Scotland.”
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