Investors are spending hundreds of millions to secure music royalties
CAN A SONG be a financial asset? Universal Music believes it can. On December 7th it announced it had bought the rights to Bob Dylan's entire back catalogue for an undisclosed fee. The music publisher (majority-owned by Vivendi, a French conglomerate) now possesses every song that Mr Dylan has written and released, from the tracks on his debut LP, called simply â€œBob Dylanâ€, in 1962 to the â€œRough and Rowdy Waysâ€ album 58 years later. (The agreement contains no provision for future recordings.) The deal is reported to have cost Universal more than $300m, reflecting its confidence that songs can generate a healthy return.
Music royalties are a complicated business. When a song is recorded, copyrights are created both for the composition of the song and the recording itself. Each of those rights is in turn split into mechanical rights (generated when a song is sold in a physical format or streamed), performance rights (when it is played on the radio or live at a concert) and synchronisation rights (when it appears in a film, television programme or a video game).