Ted Gioia over at his substack (https://www.honest-broker.com/p/12-p...ure-of-song), has his thoughts on the current goings on with artists selling their back catalogs and how it's not as lucrative as everyone (except for those that already sold) thought it was going to be. Here are the highlights but you should go read it over on his page for the full discussion:
The collapse finally came. When I analyzed the song buyout mania, led by the Hipgnosis fund, back in June 2021, I predicted that this ultra-hot investment trend would “come to an unhappy end.” And now the collapse has arrived. We’ve reached the endgame. The song fund’s share price has dropped 50% since I made that assessment—and now shareholders have voted to dissolve or reorganize the investment trust. But where do we go from here? What are old songs really worth? And who will end up owning all these old rock and pop tunes? Below I offer 12 predictions.
1) Many musicians still want to sell their songs, but it will be hard to find generous buyers.
(2) Professional financiers have finally learned their lesson.
(3) In the new reality, songs will be viewed as depleting assets, with cash flows declining sooner than investors previously assumed(as has already happened with Elvis memorabilia). Almost every hit song (except the holiday perennials) loses its audience long before its copyright expires.
(4) A few financial outfits will buy song catalogs on the cheap, but as a scavenging sideline to their other businesses.
(5) Look out for these vultures in all sectors of the music business.
(6) The last enthusiastic buyers of old songs are major record labels—but this is truly the ‘greater fool’ theory at work.
(7) This whole situation is a case study in misallocated investment capital.
(8) The inevitable result of this will be that record labels will increasingly look and act like second-rate bankers and half-assed financiers.
(9) Music, of course, can never totally lose its allure. So song investing will still resemble other ego-driven businesses—as a semi-glamorous way for rich people to flaunt their status.
(10) Over the long run, events will prove that these last willing buyers are lousy investment managers.
(11) So this will have a bad ending, but not immediately. Big players in music will suffer a slow, protracted death by a thousand cuts.
(12) I hardly need to say it, but I will: All this is unhealthy for the music ecosystem and the larger culture. We deserve better—and may actually get it.
The collapse finally came. When I analyzed the song buyout mania, led by the Hipgnosis fund, back in June 2021, I predicted that this ultra-hot investment trend would “come to an unhappy end.” And now the collapse has arrived. We’ve reached the endgame. The song fund’s share price has dropped 50% since I made that assessment—and now shareholders have voted to dissolve or reorganize the investment trust. But where do we go from here? What are old songs really worth? And who will end up owning all these old rock and pop tunes? Below I offer 12 predictions.
1) Many musicians still want to sell their songs, but it will be hard to find generous buyers.
(2) Professional financiers have finally learned their lesson.
(3) In the new reality, songs will be viewed as depleting assets, with cash flows declining sooner than investors previously assumed(as has already happened with Elvis memorabilia). Almost every hit song (except the holiday perennials) loses its audience long before its copyright expires.
(4) A few financial outfits will buy song catalogs on the cheap, but as a scavenging sideline to their other businesses.
(5) Look out for these vultures in all sectors of the music business.
(6) The last enthusiastic buyers of old songs are major record labels—but this is truly the ‘greater fool’ theory at work.
(7) This whole situation is a case study in misallocated investment capital.
(8) The inevitable result of this will be that record labels will increasingly look and act like second-rate bankers and half-assed financiers.
(9) Music, of course, can never totally lose its allure. So song investing will still resemble other ego-driven businesses—as a semi-glamorous way for rich people to flaunt their status.
(10) Over the long run, events will prove that these last willing buyers are lousy investment managers.
(11) So this will have a bad ending, but not immediately. Big players in music will suffer a slow, protracted death by a thousand cuts.
(12) I hardly need to say it, but I will: All this is unhealthy for the music ecosystem and the larger culture. We deserve better—and may actually get it.
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