Ajit Karn
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The latest blockbuster rights deal in the music industry was announced on Tuesday, with pop superstar Justin Bieber selling a majority stake in his publishing and recording catalogue to Hipgnosis Songs Capital, a company backed by private equity firm Blackstone. The deal was reportedly worth $200 million.
For weeks, speculation has swirled that the 28-year-old will cash in on his library, joining a veritable who’s who of artists who have done so in recent years.
An AFP source confirmed the deal’s estimated value to be about $200 million, despite Hipgnosis’s silence on the topic.
Legacy musicians like Bob Dylan and Bruce Springsteen have been more likely to sell out than contemporary performers like Justin Timberlake and Shakira (who have also signed deals with Hipgnosis).
These enormous sums (Springsteen’s catalogue reportedly sold to Sony for $500 million) are seen as safe bets by both ageing musicians trying to straighten out their finances and investors who know they can make money off of both tried-and-true music and the continued success of streaming.
Hipgnosis has a stake in some of the biggest songs of the 21st century, such as “Baby” and “Sorry,” both of which are from Bieber’s younger discography, which is often viewed as riskier area.
Blackstone, a major financial services firm, and Hipgnosis Song Management, a British music company, have formed Hipgnosis Songs Capital, an investment fund worth $1 billion.
Hipgnosis has purchased the writer’s share of Bieber’s publishing copyrights for his entire 290-song back catalogue, which includes all of his music published prior to December 31, 2021.
Payments from public performances of his songs are included, as are the artist rights to his highly profitable master recordings and neighbouring rights royalties.
Variety said that while Bieber’s longstanding label Universal would continue to manage the catalogue, all profits would go to Hipgnosis.
Bieber, originally from Canada, shot to prominence after being found on YouTube while he was just a teenager.
He has had eight albums debut at the top of the Billboard 200, and his music has been played over 32 billion times on Spotify.
“The impact of Justin Bieber on worldwide culture over the previous 14 years has certainly been astounding,” said Hipgnosis chief Merck Mercuriadis, a senior executive in the music industry.
Only 28 years old, he is one of the few defining musicians of the streaming era, which has revitalised the whole music industry, taking a loyal and global audience with him on his journey from teen phenomenon to culturally important artist.
After revealing he had been diagnosed with Ramsay Hunt Syndrome, a rare complication of shingles that caused partial facial paralysis for him, Bieber announced an indefinite vacation from touring.
While it’s true that music libraries have always been traded, the recent publication sales boom has accelerated the process, since investors and banks see music libraries as a potentially lucrative asset class.
Hipgnosis, Mercuriadis’ public company that debuted on the London Stock Exchange in 2018, has been a major factor in spreading the word about the increase in sales.
Investor interest in music acquisitions had appeared to wane over the previous year, but the Bieber deal demonstrates that appetite is still strong.
Besides Springsteen and Dylan, other artists whose music was featured in important deals across the industry included Sting, Stevie Nicks, Paul Simon, Motley Crue, the Red Hot Chili Peppers, and the estates of David Bowie and Leonard Cohen.
Music publishers get paid when their songs are broadcast or streamed, when albums are purchased, when the song is included in a commercial or film, and when other uses of the song are licenced.
The duplication and dissemination of an audio recording are governed by the recording’s rights.
The sales surge coincided with a broader discussion over artist ownership of their work, which was amplified by Taylor Swift, who is enjoying massive success while re-recording her first six albums to retain ownership of the master recording rights.
This action was taken because of Swift’s extremely public disagreement with music manager Scooter Braun, whose company had previously controlled her original masters and had sold them to investment firm Shamrock Holdings.
When Bieber decided to sign a catalogue agreement, Braun, who has managed him for 15 years, said in a statement, “we soon realised the greatest partner to preserve and grow this amazing heritage was Merck and Hipgnosis.”
The scale of this arrangement reflects and acknowledges the fact that “Justin is genuinely a once in a generation artist.”
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Justin Bieber's music rights (including songwriter share, master recordings and neighboring rights) for his entire catalogue upto December 31, 2021 has been reportedly sold to Hipgnosis Songs for about $200 million.
Read more: https://t.co/CeWxHQa1P0
— RickTheSizzler 🇮🇳 (@almightyrohit) January 24, 2023
no like idk much about music business but just 200m dollars for THE JUSTIN BIEBER'S CATALOGUE? a catalogue that raised a whole generation of artists and people? doesn't sit right with me esp since scooter is involved I'm sure he kept the most profit for himself pic.twitter.com/JbV8ziJfO7
— pink beanie (@biebs_beanie) January 24, 2023
