Taylor Swift, Bob Dylan and the future of streaming

Taylor Swift, Bob Dylan and the future of streaming


To understand the future of media you could do worse than go back to mid-1980s Sheffield, where the rock band Def Leppard and their producer Mutt Lange were hoping to take their stardom to the next level. 

Between 1984 and 1987, Def Leppard went to hell and back — the drummer even tragically lost his arm — making the album Hysteria. The record would go on to sell 20m copies thanks to a combination of Lange’s production chops and strip clubs the world over endorsing the song “Pour Some Sugar on Me”.

It would also ultimately prove an early demonstration of what has become a new rule of music’s streaming age: the past is worth more in the present.

In the 25 years following Hysteria’s release, the music industry evolved from vinyl and cassettes to CDs, downloads and then today’s streaming model; but the band’s contract with its record label remained the same. In 2012, to protest against being short-changed with their paltry download royalties, the band decided to go it alone and return to their back catalogue to re-record what lead singer Joe Elliott called “brand new, exact same versions of what we did”.

A six-year impasse ensued between the band and its label, until the label finally blinked when the band re-recorded “Pour Some Sugar on Me”. In 2018, Def Leppard secured a fairer deal and finally embraced streaming. Today, no fewer than 11 different versions of their hit song have racked up more than 268m streams on Spotify (the “faithful forgery” has been removed but still made up 40 per cent of those streams), grossing about £1.3m.

Vivian Campbell, left, and Phil Collen of Def Leppard perform in Las Vegas last year. The band’s song ‘Pour Some Sugar on Me’ has grossed about £1.3m from streaming
Vivian Campbell, left, and Phil Collen of Def Leppard perform in Las Vegas last year. The band’s song ‘Pour Some Sugar on Me’ has grossed about £1.3m from streaming © Getty Images

Elliott said at the time “it was not about the money”, but a royalty statement that size — for a hit that’s 33 years old — must have been sweet to taste.

In with the old

Back in that Olympic summer of 2012, when the “Leppard refused to change its spots”, I was a rare rockonomist, serving as chief economist to the songwriters’ collective PRS for Music before moving to take on the same role at a little-known Swedish streaming company called Spotify.

Having that perspective from both a buyer and seller of intellectual property made it clear to me how their actions matter to the arts. Now it matters to all of us. 

What I saw back then was an industry transitioning from charging upfront fees (selling a CD and knowing nothing as to what happened next) to monetising consumption (earning downstream). It is no coincidence that Wham’s 1984 hit “Last Christmas” surfaced towards the top of the Christmas charts on Spotify in 2012, and continued to do so every year since. This pivot made the past more valuable. 

One result of that has been the recent rush of money into older songs. Taylor Swift has confirmed she is re-recording her entire back catalogue to protest against her life’s recordings being tossed around like some commodity on Wall Street without her consent. Swift’s “swift” rebuke to the latest acquirer of her catalogue, Shamrock Capital, for $300m, was to threaten to regain control over her rights (and future revenues), re-record her songs Leppard style and diminish the value of the original masters.

This burgeoning market in “future past” puts music at the crossroads where it risks selling its soul. Creator and the acquirer’s interests are at odds: copyright incentivises the creator to write more songs, whereas the acquirer seeks capital gains from their past.

Swift can re-record her old songs (because her original record contract no longer prohibits this) but no one can write their own songs again. This helps to explain why Bob Dylan, meanwhile, has sold his catalogue back to his publisher, Universal Music Group, for a reported $300m.

Perhaps tired of the lyric “Businessmen, they drink my wine”, Dylan effectively draws down a pension pot for himself and his heirs while capital gains tax remains relatively more favourable than income tax. For UMG, the bet is that the past will hold value into the future — and perhaps grow higher.

First to suffer, first to recover, music is a microcosm for all of us to learn from. Its journey wakes us up to the rising tide of digital disruption gathering around our feet. Streaming lifted the lid on how music is consumed. Now everyone is catching up. 

And not just in the obvious places, such as Netflix. Before the pandemic shut you out, did your gym track which machines you used or how long your workouts lasted? Unlikely. But now, at-home fitness apps are tracking our decisions far more granularly. Newspapers’ circulation was always measured on how many were returned back to the warehouse, not on how many were sold. Apps now tell how much is being read. 

In music, Swift, Dylan and many other established artists are waking up to the reality of what it means when fans in the streaming age say “I prefer their earlier stuff”. It means money. 

Recall how this used to work. In the past, the majority of sales occurred in the first month after release, meaning the lifetime value of an album typically decayed over time. Value could occasionally be resuscitated through a sync deal that placed the music in commercials or films. But nobody really knew the lifetime value of music: When fans “preferred a band’s earlier stuff”, they would simply dust down an old vinyl record, snap their fingernails prying open a CD shell or restore digital files to their iTunes account. No industry insider was any the wiser to their actions. 

But with streaming, fans’ return to yesterday’s favourites can drastically alter a song’s lifetime value. And when fans stream their favourite artist’s new record but decide they prefer the earlier stuff, all is not lost for the artist, as those streams monetise the artist’s catalogue all over again. 

Chart of music streaming trends from Spotify showing that, although all age groups listen mostly to recently released music, among older music there is a demographic pattern, with older age groups listening to older music

Let’s face it. We’ve always had a tendency to “prefer the earlier stuff” when it comes to the bands we love. Only now, that preference carries financial repercussions.

From our ears to our eyes, Netflix has seen some of its biggest hits come from its deepest catalogue. Full House, The Fresh Prince of Bel-Air and Friends, all cable hits from the 1990s, rode a second wave of popularity when they relaunched on Netflix, alongside a reboot, Fuller House, a reunion of Friends and the rumoured sequel of Bel-Air

For Netflix and its competitors, the logic is the same as Def Leppard, Taylor Swift and Dylan. The days of opening a DVD case and loading a disc into the player under the television set are long gone. The charity shops on my local Kentish Town High Street no longer even accept DVDs (and don’t bother with your CDs). Now that the streaming companies can see what we’re actually watching, they can place wiser bets on past content that will crystallise even more value in the future.

Hello, jargon

“Catalogue” is the term for this older stuff. In music, its content that’s seen 18 months pass since it was first released — and its origins are revelatory. Back in 1991, when the industry was transitioning from vinyl to CDs, purchasing albums for the second time became the norm — none more so than Meat Loaf’s classic, Bat Out of Hell (1977). That second wave of demand caused the 14-year-old album to dominate the charts — again!

Yet the purpose of charts is to promote new releases, so the “catalogue rule” was born — only “new” or “frontline” albums would be chart-eligible, with anything released over 18 months ago ineligible. The rule succeeded in removing Meat Loaf from atop the US charts — all because the music industry was struggling to deal with a format change as the past (vinyl) was being repurchased in the present (CDs).

That was then, this is now: 29 years later we’re struggling with another format change as creators, distributors and consumers adapt en masse to streaming. Frontline content made up the majority of the labels’ turnover in the era of sales. But in this era of streams, catalogue dominates. Music released in the UK in 2019 made up just over 20 per cent of all streams last year, with 2018 taking another fifth or so. Songs released in 2017 and earlier comprised the majority. 

As with so much of the dated jargon still used in media, Meat Loaf’s 18-month “catalogue” rule today is akin to trying to fit a square peg into a round hole, leading to all sorts of potential mistakes.

Take the rock band Imagine Dragons. Their debut album, Night Visions, racked up a middling 1.5bn streams in its first 18 months. Had the band’s label, KIDinaKORNER/Interscope, behaved like a sprinter and adopted the Meat Loaf catalogue rule, it would have succumbed to short-termism, dropped the band from its roster and handed it down to the catalogue team. 

Instead, the label pivoted through the disruption to become a marathon runner; streams of Night Visions doubled in the second 18 months, as more fans streamed the album more often, similar to a CD that fans play over and over again. Had the label dropped the band in accordance with the antiquated catalogue rule, it would have squandered what is now the second-biggest rock band on streaming services, narrowly behind Coldplay.

British musician Tom Misch exemplifies another change of the streaming era. The 25-year-old has been ever-present on streaming services since his late teens, dropping 20 singles, two albums and various mixtapes and EPs; featuring on three tracks from other artists, remixing five and joining many collaborations, the latest being a stunning project with Michael Kiwanuka. This drip-feeding of music allows his fans to feel like they are part of his artistic journey; and every time he puts something new out, new fans go back through his catalogue — those streams are set to pass 1bn by Hogmanay. Gone are the days when artists disappear for two years to make a record — do that, and your fans think you’re on holiday.

Forever and a day

This monetary obsession with “future past” cannot be treated as a given; the primary reason why media content has value at all is that it’s protected by copyright, but that doesn’t last for ever — meaning some may become worthless when its copyright expires.

The Gershwin estate offers a pertinent example. George, a composer, tragically passed away in 1937 at the young age of 38. His brother Ira, a lyricist, lived till 1983. An author’s copyright lasts for 70 years after their death in the UK, so by 2007, George Gershwin’s compositions would have been considered public domain, but not Ira’s lyrics. 

The rules get blurred when the credits get merged. If the content in question is worded as “music by George and words by Ira”, the former falls out of copyright in 2007 and the latter stays in until 2053, 70 years after the death of Ira. But if George and Ira are jointly credited with “words-and-music” the entire work remains protected till 2053. 

(Beatles fans will read this and quickly flip their old album covers to see if Lennon and McCartney are both credited with “words and music”. Rest assured, they are — and only because Lennon wanted his name to appear first!) 

From the stage to the screen, Anne of Green Gables was written by LM Montgomery in 1908 and entered the public domain in 1983 in the US and in 1992 in Canada. The value of the past expired with the copyright, but it’s been retained in the present thanks to trademarks applied to the title and names of the characters — and these can be renewed every 10 years in perpetuity. Little surprise, then, the Netflix remake was called “Anne with an E”. 

Pivoting from the past to the future

Established artists are realising that the past is worth more in the present. Now a new entrant, Guernsey-registered music investment company Hipgnosis, is betting the house on the past continuing to be worth more in the future — paying stratospheric multiples of up to 18-times current value to acquire hits from yesteryear. This is risky, as with 55,000 new songs being onboarded by streaming services every day (competing for the attention of the 55,000 released yesterday), they could end up running into a “Red Queen Race”, investing as fast as they can in order to stand still. 

Other, more traditional players are cannier. They instinctively know that some hits are evergreen; others have just been overwatered. 

Peermusic, founded in 1928, revealed to me a remarkable fact: its most valuable copyright in 2020 remains the same as it has been for much of the past 70 years: “You Are My Sunshine”. The song was co-written by Jimmie Davis in 1939, who reached his own century, passing away at the grand old age of 101 in November 2000.

Ralph Peer II, the current chair-CEO (and son of the founder) of peermusic, notes that the song exemplifies the firm’s longstanding push to build a catalogue that satisfies the “Four Ds”: deep, diverse, durable and dynamic. Dozens of artists over the years have recorded the song — from Johnny Cash to Aretha Franklin to Susan Boyle to Ray Charles — extending the life of the song well beyond its original copyright expired. And to further perpetuate the song’s pay-off, peermusic encourages non-English language recordings to introduce it to as many cultures as possible. If you’re planning a post-lockdown trip to the Algarve next year, be prepared to hear it on Portuguese TV, as it’s now part of a high-profile holiday ad campaign.

It’s the catalogue content that has that secret formula — deep, diverse, durable and dynamic — that will stand the test of (its finite period of) time. For many of us, “You Are My Sunshine” is one of the most well-known pieces of “earlier stuff”, as so many of us learnt it as children. In an era where the past is often worth more than the present, its value will surely last for many years to come — even if, say, Baby Shark dislodges it from the top spot.

Will Page’s ‘Tarzan Economics: Eight Principles in Pivoting Through Disruption’ will be published on April 1 by Simon & Schuster

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