The game of acquiring music catalogs is getting hotter – and the big music rights holders are intervening.
Don’t forget that Universal Music Group spent $ 1.7 billion on music rights and advances in 2020, including the over $ 300 million acquisition of Bob Dylan’s song catalog.
Sony Music Group recently confirmed it had spent $ 1.4 billion on music-related acquisitions in the six months ended May this year alone – including a nine-figure sum on Paul Simon’s song catalog.
Today (June 17th) it’s Warner Music Group’s turn to cause a sensation. WMG has confirmed that it has acquired the entire catalog of recordings from French DJ / producer superstar David Guetta. A deal for future recordings has also been agreed.
The Financial Times reports that the Guetta deal cost Warner more than $ 100 million. MBW has spoken to industry circles near the deal who have confirmed that number, but have also told us that the price is below $ 150 million.
This news is interesting for several reasons. First, it suggests that Warner’s current catalog sourcing strategy may be based on hits from the past 20 years.
In addition to this theory, WMG recently acquired a majority stake in a portfolio of songs by Bruno Mars for an undisclosed amount.
In the M&A world, hits by Bruno Mars and David Guetta are often referred to as “flat catalogs” – or modern pop classics, if you will. This music is doing particularly well on streaming services right now – but how many of these hits will be streamed heavily in 10 or 20 years?
Some industry watchers believe that music like Guetta’s best-known hits (released around 2009-2011) will ultimately experience a “decline” in popularity over the next decade. However, others point to the fact that a tune like Guetta’s Titanium (feat Sia) was released 10 years ago and continues to maintain considerable streaming popularity.
In fact, Guetta is the eighth largest artist in the world on Spotify today, with over 54 million monthly listeners.
Another worthwhile observation on this point comes when we observe the changing shape of a very active music M&A player, Hipgnosis Songs Fund.
According to tax returns in the 2019 financial year only 10.2% the value of Hipgnosis was tied into songs that were more than 10 years old (ie “Deep Catalog”).
Since then, Hipgnosis has taken an active strategy to expand its portfolio well beyond modern hits (see the acquisition of 50% of the Neil Young catalog and 100% of the Lindsey Buckingham song catalog this year as evidence).
As a result, a transformation: in the 12 months to the end of March this year, there will be some 60.2% Hipgnosis’ worth comes from songs released over 10 years ago.
Another interesting aspect of the Warner purchase announced today: Many assumed that David Guetta’s music catalog was acquired by WMG as part of the Parlophone Label Group’s major buyout in 2013.
Now, however, it seems that what WMG really acquired there was an exclusive license to Guetta’s recordings. Presumably that license has now expired – it has returned ownership of the master catalog to the artist and allowed him to resell it for more than $ 100 million.
It is therefore likely that Guetta gave his greatest hits to Parlophone / Warner under a 10-year license agreement.
One might expect many other superstar artists to have made similar deals with record companies at this point in history.
Could this indicate that soon more artists who made big world hits in the noughties will also be able to resell their record catalogs?
And if so, will the music M&A market, which has been inundated with publishing rights for so long, see a surge in masters acquisition soon?
As always, MBW will take a close look.
Announcing the Guetta deal today, Max Lousada, CEO of Warner Recorded Music said, “It’s rare that an artist not only defines a genre, but transforms it.
“David has been doing this for over two decades – he inspires audiences around the world and influences entire generations of talent. He continues to have an extraordinary impact on the development of dance music while innovating in a dynamic way and working with new voices.
“With everything he has achieved so far, there is still so much great music, creativity and originality. All of us at Warner are very excited to expand our partnership with this global icon. “
“David continues to have an extraordinary impact on the development of dance music while innovating in a dynamic way and working with new voices.”
Max Lousada, Warner Music Group
David Guetta said, “I’m really excited about the new music I’m working on. And even more excited that I’ve started playing all this new music live again to my fans and they are loving it. This is the right time to renew my creative partnership with my trusted team at Warner Music.
“This deal is about having the best people around me to make sure I can stay innovative with exciting new projects while working on my extensive catalog and building my career.”
Jean-Charles Carré, business partner and manager of David Guetta, added: “A lot of people came up to us to express their interest in David’s catalog. We chose to continue our partnership with Warner because they know and love David’s music, with a global team constantly working to put it in new contexts.
“We are very excited about some of the deals they are entering into with new partners and their expansion into new territories. This is about working proactively with David’s catalog and new music. “
And Bart Cools, EVP, Global A&R and Marketing, Dance Music, Warner Recorded Music, says, “I am deeply honored that David has decided to renew our collaboration. He is a genre-defining artist who defines an era whose music touches billions of people around the world. I’ve heard some of his new music and I know it will blow people away.
“David is a creative spirit who never rests on his laurels. In all honesty, he never rests. We released eight tracks in the first five months of 2021 and it’s not slowing down. “
In 2002 David Guetta released his debut album Just A Little More Love, followed by works like Guetta Blaster (2004) and Pop Life (2007).
His 2009 album One Love took him from clubs to mainstream audiences with hit singles “When Love Takes Over”, “Gettin ‘Over You”, “Sexy Bitch” and “Memories”.
With his 2011 album Nothing but The Beat, his commercial success reached new heights with the hit singles “Where Them Girls At”, “Little Bad Girl”, “Without You”, “Titanium” and “Turn Me On”.
This was followed by lists (2014) and 7 (2018).
In 2021, Guetta released singles including “Bed” with Joel Corry and Raye and “Heartbreak Anthem” with Galantis and Little Mix, both of which are among the top 10 hits worldwide.Music business worldwide