Who Radar Love of Golden Earring via a streaming service does not only fill the pockets of the artists these days. Investors also benefit. Large investment companies are emphatically entering the music rights market this year.
A group with investment company KKR is about to buy almost 1 billion music rights from popular artists such as The Weeknd and Lorde, according to the Financial Times. The listed Hipgnosis bought the rights to songs by Shakira and Neil Young for 900 million euros. Blackstone has released a similar amount for the purchase of rights.
“The market is overheated,” says André de Raaff of CTM Entertainment. He started investing in music rights in 2008, then for the ABP pension fund. “Huge prices are now being paid. This includes the expectation that the music market will continue to grow enormously. That can happen, but we are counting on less extreme growth than American banks are now predicting.”
At the end of the 90s, there seemed to be little to earn with music. The illegal copying of CDs and music downloads via services such as Napster and Kazaa took off. Due to the arrival of paid services such as Apple and Spotify, more money has been flowing to artists, composers and other stakeholders in recent years. Investors want to take advantage of this and therefore buy the rights of numbers.
At the beginning of this year, a new fund was set up in the Netherlands by, among others, music producer John Ewbank. Through the Pythagoras Music Fund, investors want to invest tens of millions in the purchase of music rights. The first blow was struck at the end of September. Then the fund took over the music rights from Willem van Kooten alias Joost den Draaijer. It concerns 30,000 copyrights and 6,500 master recordings, including Radar Love from Golden Earring and Venus from Shocking Blue.
“We have the ‘master rights’ of Radar Love“, says Ewbank. “If the song is played on the radio or via a streaming service, then a copyright share goes to the band members Barry Hay and George Kooymans. Most of the master’s part goes to us.”
Music as a pension
Ewbank says it was not difficult to find investors. “It was easy to explain. During the crisis in 2008, you stopped buying a luxury item such as a CD. Music was sensitive to the economic situation, but now no one cancels their Spotify subscription during the corona crisis. It has become much less dependent on the economy.”
According to De Raaff of CTM Entertainment, music rights are a relatively safe investment. “It’s a kind of pension. My father wrote the number 1 hit about sixty years ago I’m waiting. At Christmas, my sister – who manages the copyrights – still divides the money among the children every year. Don’t forget: music rights are still protected seventy years after the death of the artist and can thus generate money for a long time.”
‘More money on the way’
With more large investors on the market, it becomes more difficult for smaller parties to intervene. De Raaff refers to deals around artists such as Bob Dylan, Neil Young and Fleetwood Mac. “If I hear that major parties are interested, I immediately withdraw. Then I know that I will not win that match, because they want to pay so much more.”
According to music producer – and now also music investor – John Ewbank there is no question of madness. “It’s more logic. Streaming music is very normal in the Netherlands, but Belgium, for example, is still lagging behind. Continents such as South America still have to ‘open’ at Spotify. Money will soon come from countries where money never came from in the past.”
Early music is worth more and more money as a ‘certain pension’
Source link Early music is worth more and more money as a ‘certain pension’