Universal’s Bob Dylan Catalog Buy Is About Survival
In the 24 hours since Bob Dylan sold his peerless songwriting catalog to Universal Music Group for a nine-figure sum, discussion has, understandably, centered on Dylan himself.
I keep hearing the same two questions: Will this affect the way fans digest his music? (No, but expect to hear his hits in more perfume commercials.) And what might have been Dylan’s motivation for selling his crown jewels now? (Music catalogs are fetching all-time-high prices, he’s nearly 80 years old, and Joe Biden may significantly hike taxes on big U.S. asset sales when he becomes president.)
Grainge’s choice of words here is very deliberate. The “clear and consistent track record” comment is an obvious slight against newer companies — like Hipgnosis Songs Fund and Primary Wave — which have recently been nibbling into Universal’s market share. These firms have quickly acquired triple-A publishing catalogs from the likes of Bob Marley, Whitney Houston, Stevie Nicks, and Mark Ronson, using institutional investor money to pay more than traditional music companies like Universal are willing to.
Universal’s Dylan acquisition, then, is a landmark statement from the world’s biggest music rights company: We’re not going to sit back and just let the greatest music in history be auctioned off to Wall Street under our nose.
Christmas Carols on Apple Music
Which raises the question: Who’s this statement for? To a degree, it’s for the current investors of Universal’s publicly-traded French parent Vivendi. But here’s the thing: Vivendi has confirmed Universal Music Group will be spun out for an IPO in 2022. In doing so, it’s deliberately seeded excitement amongst new would-be investors, who have seen music rights become one of the most reliable growth assets of the pandemic era.
The bear-case counterargument on Universal is that it has allowed cash-rich industry upstarts to reduce its commercial leverage; maybe, critics have said, Universal doesn’t have the fight or the funds to buy triple-A catalogs in the modern era. So — as its two-fingers to the financial naysayers — Universal went out and snatched up 600 Bob Dylan songs.
Christmas Carols on Soundcloud
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