Why David Bowie, Bruce Springsteen and more are selling their music catalogues
CBC
When David Bowie's estate sold his entire music catalogue for $250 million US last week, the late British rocker joined a group already bursting at the seams with new members.
Bob Dylan, Stevie Nicks and Neil Young have all sold theirs in recent years, while newer artists — including Shakira and Calvin Harris — have also jumped on the trend. And just days after Bowie's sale singer/songwriter John Legend parted with his catalogue for an undisclosed amount.
But the payouts aren't cheap. Bruce Springsteen hammered that home when he made the largest-known single-catalogue sale in December for $500 million US.
Why are corporations willing to spend so much to acquire these musicians' catalogues? And why are some of the biggest superstars of the past 50 years parting with the bodies of work they spent a lifetime building?
CBC News explains why catalogue sales have become a defining part of today's music industry.
"The reason why you're hearing about this right now, and why it seems to be happening quickly is a U.S. tax situation," said Patrick Rogers, CEO of Music Canada. "The opportunity to do this at the best financial time is right now."
Due to what many call a "loophole" in American tax law, musicians making a large sale right now pay less than half as much as they might a few years from now, when that loophole is closed.
When United States President Joe Biden was elected, he pledged to alter the country's capital gains tax law so that it would fall in line with income tax for high-earners. Or in other words, it would ask — as stated on his website — "those making more than $1 million to pay the same rate on investment income that they do on their wages."
That means the taxes musicians pay on their catalogue sales could jump to around 37 per cent from roughly 20. For sales in the hundreds-of-millions, that represents a huge amount of money, Rogers said, and it's pushing musicians who are considering the move to get it done.
Another factor is a direct result of the pandemic: the loss of live music, which forced an already struggling industry to adapt quickly.
"Live music obviously has gotten impact[ed] really extremely by the pandemic, more than any other aspect of the music industry," said Tim Jones, founder of music label Vnclm_ and management company Pipe and Hat. "So, you know, we've had to really move everything to digital over the last couple of years."
After decades of musicians being able to rely mostly on record sales for income, the rise of file-share sites followed by the rise of streaming all but destroyed that source of revenue. Performers were forced to turn more and more to unending touring schedules to make a living — a last-resort option that was then taken away by COVID-19 closures and social distancing.
Without live-music revenue, musicians — even top-earners — have been forced to adapt.
And while some have been able to transition to digital mediums nearly seamlessly (like Travis Scott did with the virtual-reality (VR) Fortnite concert, early on in the pandemic), that's not a viable option for every genre, Jones said.
