Daryl Hall and John Oates (Rolling Stone)
The legal spat involving the iconic duo Hall and Oates has its roots in trends that have shaken up the music industry, according to a report by Dan Primack and Tim Baysinger at the Axios AM Newsletter. Axios calls it the "Shadow music industry," with Primack and Baysinger writing:
Daryl Hall's lawsuit against John Oates could pull back the curtain on the secretive and booming music-rights market. The growth of streaming music — coupled with the increase in licensing opportunities in TV shows, movies and video games — is increasing the value of holding song rights and making them attractive investments.
Instead of licensing copyrights for a set amount of time, many artists are selling them outright to the highest bidder.
That apparently is what Oates wants to do, but the idea met with resistance from his high-profile partner. Hall's response, more or less, was "I Can't Go For That (No Can Do.)" Why did Oates' plans leave Hall cold? Mainly, it's because Hall has a long memory. From Axios:
The benefit for the buyer depends on the deal. But investment firms view music rights as stable assets that likely won't depreciate.
Years ago, Hall and Oates sold part of their catalog. Now it appears that Oates recently agreed to sell at least some of his remaining rights.
Hall has long bemoaned the original deal and — under seal — sued to stop a new sale. The judge lifted some of it and said more information soon could be publicly disclosed.
That's of particular interest, given how little we typically learn about these music rights deals.
Bottom line: Big money can be made from selling music rights. That probably is what prompted John Oates' idea to put at least part of his catalog on the market -- and Oates is not the only well-known musician to hear the clarion call of big dollars changing hands. From Axios:
Money is flowing back into the industry after a yearlong dry spell and some financial trouble around Hipgnosis, one of its biggest players.
Last week, Broadcast Music Inc. — a major holder of music rights — was sold in a deal that could be worth $1.7 billion, according to industry trade outlet Music Business Worldwide.
Morgan Stanley is partnering with a large music publishing company to spend $700 million to acquire song copyrights.
As for artists, Bob Dylan sold his songwriting catalog in 2020 for a reported $250 to $300 million -- and followed that about a year later by selling his recording catalog, which dates to 1962, for a reported $150 to $200 million. Dylan is not alone when it comes to selling off his music rights. From a 2020 report at Forbes:
The last few years have seen a plethora of music legends cashing in on their recording and songwriting catalogs. In April, Paul Simon’s song catalog was also sold to Sony for $250 million. Two weeks ago, David Bowie’s entire music catalog sold to Warner Chappell Music for more than $250 million, several news outlets reported. Stevie Nicks and Neil Young have also sold stakes in their catalogs. The pandemic has been a driving force for artists deciding to sell their music, Rolling Stone reported, because touring wasn’t possible. Tax reasons, estate planning, and larger economic factors may also be contributing to why artists are opting to sell their catalogs. Nostalgia, and new opportunities for old music, like fitness apps, may also be factoring in to the trend, according to the Wall Street Journal.
Legends aren't the only ones who can join the party. Axios reports that Katy Perry sold catalog rights to five of her albums for $225 million. That raises a question from this Baby Boomer: Who in the heck is Katy Perry?
