Not for the first time, David Bowie proved to be well ahead of the game in the music business.
In 1997, the British musician securitised his back catalogue through the issue of what inevitably became known as “Bowie Bonds”.
The man who once posed as Aladdin Sane proved to be far from mad, receiving cash upfront from investors who bought the bonds and then using his music royalties to pay the bonds’ coupons.
Where Bowie led, others followed, such as soul legends James Brown, Marvin Gaye and the Isley Brothers, songwriting teams Ashford & Simpson and Holland-Dozier-Holland and the champions of the New Wave of British Heavy Metal, Iron Maiden.
“Music is going to become like running water or electricity,” the artist told the New York Times in an interview that coincided with the news of the Bowie Bonds.
If the concept of turning an artist’s music royalties into securitised debt obligations sounds to you a bit like the sort of palaver that brought the global economy to its knees in the final years of the first decade of the current millennial, you might have a point and it could explain why artists these days are going down a different path to cash in on their musical legacy.
The Great American Chequebook
In recent years, the trend has been to sell the songbook to publishers or to funds specifically set up to perform such transactions, such as Hipgnosis Songs Fund Limited (LON:SONG), Round Hill Music Royalty Fund LP (LON:RHM) and One Media IP Group PLC (LON:OMIP).
Bob Dylan, he of the opaque lyrics, raspy voice and harmonica solos that sound like a swinging rusty gate, sold a back catalogue of more than 600 songs in December 2020 to Universal Music in a deal thought to be worth hundreds of millions of dollars.
Another old folkie, Neil Young, he of the resonant lyrics, whiny voice and 15-minute one-note guitar solos, sold 50% of the rights to his back catalogue to Hipgnosis.
The same company has also bought catalogue rights from Fleetwood Mac’s Lindsey Buckingham while on Thursday, another artist who came to prominence in the folk-rock boom of the early sixties, Paul Simon, sold his back catalogue to Sony Music Publishing for an undisclosed sum.
Unless they have been spending prodigious amounts on addictive substances or they signed the sort of restrictive publishing contracts that even Little Richard would’ve spotted as a duff deal, all of these people are presumably already incredibly rich and could expect to continue to generate healthy revenues for the rest of their lives, so why the need to generate cash now?
Well, the “for the rest of their lives” bit might have something to do with it. Many of the artists doing these deals are in the autumn of their life – possibly the winter of their life – and for whatever reason, they probably appreciate a big pile of money they can do something with now, rather than in 20 years’ time.
Because although he wrote a song in 1973 called “Forever Young”, not even Bob Dylan can turn back the hands of time.