Justin Bieber Just Sold His Entire Music Catalog And Why Companies Are Eager To Strike These Deals

Do these deals include future writings? If a younger artist gets low-balled, then creates several blockbusters, they could be forfeiting a lot.

 

Billboard indicating that it's only everything up to and including December 31, 2021:

 

An you imagine how much Taylor Swift will get for her catalogue when/if she ever sells it?

 

If this is not confirmation the world is nuts I don’t know what is .
I honestly don’t get the business fundamentals here as Beiber does not write by himself as he writes with an army of people so how on earth could he get $200 million when there are so many others involved ?

Also according to younger members of my family Beiber is past his use by date and is nowhere near as popular as he once was so again how on earth did he get $200 million ?

But hey is someone was stupid enough to offer this and pay it good on Beiber .

 

Blame the scorpion for being what he his? Or blame the frog for letting him piggyback again, again and again?

 

That is a good question. Maybe blame the abysmal level of financial education we have in schools. It's only in recent years I even took an interest, I should have been paying attention from my earliest years, but didn't know better, the amount it's cost me over that time has been very large. I don't blame the artists for cashing in. Finally I'm not a financial advisor but feel confident in saying don't put your money anywhere near this.

 

I have no love at all Dylan’s music - but what he has proved is that his music has longevity. Which of course, given how much younger Bieber is, his music cannot do the same. Who is to say his fanbase will want to listen to his music in 5,10,20,50 years time. I would say this is a riskier investment than Dylan.

All the deals I’ve seen so far are from legacy acts in their 60s/70s/80s - so this is a new market being looked at.

 

Someone mentioned his unfortunate declining health. That he would sell his catalog at his age is an indication to me that he isn't optimistic about his future health prospects.

 

the theory is to collect and monopolize everything out there considered media, and of course the value will triple in 5 years...

good luck with that...

purchasing sports teams and exclusive rights to broadcasting are key... the Olympics cause a network to pay an egregious financial bloodbath in the US for no reason beyond garnering it up.

 

This one is a head scratcher. This is the Blackstone Hipgnosis that bought this, it includes publishing 290 of his songs, but not his copyrights of his existing UMG product, so it must be royalty payments. He suffers from Ramsay Hunt Syndrome. This version of Hipgnosis also bought Justin Timberlake's catalog rights last year for $100 million. This is backed by $1 billion from Blackstone. They may be going after younger artists, rather legacy. This will probably inflated all values.

 

what about this Canadian venture?

 

So they'll make $600 off their $200 investment? I'll admit that the worlds of business and finance are a mystery to me so that's amazing.

Thanks for the information.

 

that's what each prospectus and long-term plan in front of me tells me, dozens of times every day

buying the product of another mind is an interesting line of fortune hunting

 

Sweet deal… as long as it’s paid in $US.

 

So do you have any idea how long will it take them to make that $400 return on their investment?

 

this stuff heightens my thought that a day is coming soon when the free ride on obtaining music is going to be shut down in a second...

 

if i'm paid $350 an hour I could read what they budget and compare it to historic rates and disclose my intuitive and evidentiary opinions from decades of experience (mainly when it all falls apart and parties are suing each other)

off the cuff I think it's insane to buy his catalogue for that price, but what the frick do i know till i'm paid to care deeply ..

half the boutiques i pass in my city are simply to keep a rich man's third trophy wife busy during the day, lose $75,000 every month

is there a lot more of his product coming out?

is demand for his product going to crater or rise for him the next 2 decades?

is his team currently missing out on a marketing strategy that can capitalize to the moon?

is the buyer a special purchaser that doesn't really have to care about what happens financially with the catalogue? say an internet emperor who wants an NBA franchise and the current highest bid in competition is apparently $1billion, so he shrugs says "what the hell... 2 billion" because he can and did. nice toy, sir...

 

I don't know anything about crypto, but I don't see the comparison with the subprime mortgage collapse. That was driven by a hunger for securitized debt instruments that were viewed as low risk and a need to feed the market with more debt to bundle, and the higher the interest rate the better. Here we have a fixed and finite asset -- the intellectual property in the songs. It's value doesn't involve the creation of additional intellectual property. You could do a pretty standard discounted cash flow analysis of the current income from the right to come up with a current net present value. Then there's the question of whether or not there's untapped future value to be unlocked with sync licensing, development of other products (like jukebox musicals or whatever), that an investor and/or operating company would have to make a guess at to come up with a reasonable price they're willing to pay. The trading aspect is an additional consideration -- is there doing to be appreciation in the assets such that you could flip 'em for a gain at some point. For a pure investor, that's obviously a major consideration, for an operating company in the music business that might acquire similar rights, probably less so -- they're buying them for use. Is there risk -- as there turned out to be in the sub prime market -- of the value of the asset going to zero? Not only is there risk of that, there's a guarantee of it because someday the assets will enter the public domain. So the questions are, over a given time frame of 75 years or whatever, how much money can the asset generate in continuing revenue, and then will the asset appreciate and be attractive to other investors or operating company buyers in the future at some multiple. Time will tell on both if these are good investments, but certainly coming to a baseline determination of the current value of the assets based on some kind of discounted cash flow shouldn't be all that difficult or opaque (at least not to those with access to the actual income numbers, which I'm sure they looked at in their due diligence).

For the songwriters the whole transaction makes a lot of sense. In the current streaming model, they're collecting nickels and dimes at a time on a pay-per-use basis. It could take them many years to realize substantial income from the work. If they sell, they're collecting a lot of cash upfront instead. Furthermore, I guess they're paying taxes on that income at a capital gains rate, not a regular income rate.

For an operating company in the music business I could see it making sense too. In the pay-per-use internet media world, mass matters -- your streaming compensation is based on the total percentage of streaming your catalog captures in a given month. If you have more, more attractive assets that people are streaming more, you can generate more income. The question of course is what price you have to pay to assemble that mass.

For a pure investor, it's riskier. The era of cheap money, which is coming to an end obviously, has driven up valuations. The future use of the music, which drives income, is out of your control. And there's not really a huge market of potential buyers if you imagine you're going to flip the asset someday. There's only a handful of major operating companies with access that kind of capital in the music business. So, you're hoping there will be a market of future finance-driven investors interested in the property.

 

Well, of course, the media business has long been in the business of developing, financing, and amassing intellectual property and financially exploiting it multiple ways.

 

depends on how much bread and butter rides on the project being profitable

i work professionally on quantifying the disasters, jumping in after 5 years of litigation have marched on ruthlessly, thus my view warps cynical as happy people don't usually sue

Do YOU think his product is worth this kind of investment? I'll probably nod at anything you'd honestly say...

 

I have no idea about the valuation. You know, because it's at least part of your business, someone had to do a discounted cash flow analysis of the last five years of income from the rights, so I'm sure that was the starting point of the valuation. What that income number is I have no idea. If we knew that and we knew what kind of multiple is being paid in terms of a calculation of potential future income, maybe I'd have an opinion of if the Bieber catalogue was likely worth the price. The numbers we're seeing for all the catalogs do seem high -- especially considering that both the changing nature of compensation in the music business makes it hard to extrapolate numbers from past performance under maybe different models, and given that, as we know, someday all of this stuff will pass into the public domain. I'd like to hear that question about "worth" answered by someone with accurate knowledge of the current income the catalog produces.

I will note, Bieber is the #6 most streamed artist all time on Spotify, so the income is probably considerable. It puts him only two notches behind Taylor Swift. And when I'm in a deli or a gym or some other kind of public place, I often encounter Bieber songs playing.

 

I don't know, I still can't get past the $200.

Obviously the value of something is ultimately subjective, depending on market forces and any individual's personal attachments to a thing or service. I mean, sure, my therapist get $200 an hour but she's worth it.

Does Justin Bieber deserve $200 for his back catalog? Not in my opinion but, as I said in my first comment, what do I know?

 

“Speckled Speculation”

– Beeeeeefheart

 

Well, it's not really a question of "deserve," it's a question of what income does the catalog generate annually? Looking online for some numbers, it seems like Bieber is the #6 most streamed artist all time on Spotify, and on an ongoing monthly basis -- which is how streaming pays out mostly, #8. #8 monthly puts him ahead of Drake and Bad Bunny actually, and #6 all time put him well ahead of Beyonce, Rihanna, Queen, Adele and just two notches behind Taylor Swift, so his catalog is clearly generating a lot of income. As to future income, and ongoing popularity, that's the investor's guess.

 

Best timbits ever.