Tina Turner recently sold her music catalog and the right to license her name and likeness, reportedly for more than $50 million dollars. Fleetwood Mac members Lindsey Buckingham and Stevie Nicks separately sold their catalogs (Stevie reportedly netted $100 million), and perhaps the most prolific songwriter of his era, Bob Dylan, sold his vast music catalog for $300 million. Dozens of well-known songwriters and recording artists have recently sold the rights to their music publishing and/or sound recordings in similar lucrative deals. For these musicians, there is a strong incentive to secure a lump sum of cash for these rights during their lifetimes, while the purchasers of these rights hope to recoup the purchase price, and much more, as recipients of revenue streams for many years to come.
So, what are these valuable rights being sold? What are the revenue streams from an artist and/or composer’s catalog of music? To understand this, you have to first understand music copyrights. Every recorded track of music has two separate copyrights associated with it, and therefore two separate potential revenue streams.
A recorded song contains two distinct copyrights: (1) a copyright in the underlying musical composition (i.e., the music and lyrics); and (2) a copyright in the sound recording. Often these rights are owned by separate individuals or entities. Thus, in order to use a recorded song – e.g., to play the song publicly – one must obtain permission from both the owner of the musical composition copyright, and the owner of the copyright in the particular sound recording one wishes to use. However, if someone wants to do a “cover” of an existing composition, only permission from the owner of that musical composition copyright is necessary, since the sound recording will not be used. In this situation, a new master recording of that composition will be made, which master recording will have its own copyright and revenue stream.
The copyright in the musical composition – the lyrics, beat, and instrumentation – is typically represented as the notes and words on a page of sheet music. The song writer(s) will hold the copyright in the composition. Thus, the songwriting team of Mick Jagger and Keith Richards jointly hold the copyright to numerous well-known compositions, such as “(I Can’t Get No) Satisfaction,” “Get Off My Cloud,” “Gimme Shelter,” “Jumpin’ Jack Flash,” among many others. Similarly, the songwriting team of John Lennon and Paul McCartney wrote numerous songs as a team, such as “Back in the U.S.S.R.,” “A Day in the Life,” and “Rocky Raccoon,” to name just a few, and each also wrote songs separately, such as “Imagine” (Lennon and Yoko Ono) and “Jet” (McCartney). Sometimes, one individual writes the music and instrumentation, and another writes the lyrics, such as with the well-known and long-term songwriting collaboration between Elton John and Bernie Taupin. Each writer of a song owns rights in the composition. These rights can and often are separately licensed, assigned, sold, or transferred, entirely apart from the sound recording copyright.
The copyright in a particular sound recording of a composition – a “master” recording – is typically owned by the person or entity that created (or, more accurately, financed) a particular sound recording of a composition, which is often a record label. It is becoming more common that artists will both compose music and make a master recording of that composition. This allows the artist to receive a revenue stream from both the composition and their master recording of that composition.
For example, Bob Dylan both composed and made a master recording of the song “Knockin’ on Heaven’s Door” in the early 1970s, thus realizing a revenue stream from both the composition and the master recording therof. In the late 1980s, Guns N’ Roses covered “Knockin’ on Heaven’s Door” and released their own version, a live recording of their performance of the song. In this instance, Guns N’ Roses needed only to obtain Dylan’s permission to use his musical composition, since it was not using his sound recording. Thus, from Guns N’ Roses’ cover song, Dylan receives yet another revenue stream from Guns N’ Roses’ use of his composition. As you can see, for a prolific songwriter (looking at you, Carole King), musical composition revenue streams can be incredibly lucrative.
When artists like Tina Turner, Lindsey Buckingham, Stevie Nicks, and Bob Dylan sell the rights to their musical catalogs, they are giving up the right to these revenue streams in perpetuity in exchange for a lump sum now. As they say, you can’t take it with you when you are gone.