Comment by @carstenpoetter • Hey
well, I'm neither @sameold.lens nor @motiveunknown.lens also I don't have any insights into the music industry (why are you commenting here, Carsten?).
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Comments
- I think a very interesting stat to consider that I think a LOT of these investors miss relates to the term "Catalogue" and the definition thereof. In strictest terms, "Catalogue" means anything more than 18months old.
To most, they would view, say, The Eagles or Pink Floyd as a classic "catalogue" acquisition. However if you look at streaming services, these artists don't actually account for anything like the highest volume of streams. Far from it: the "catalogue" in question is actually music less than 5 years old.
What that means, IMO, is that there's a chance some investors are applying incorrect definitions and throwing money into music that, in truth, is not potentially ageing as well as some might think.
There are exceptions - Queen being a recent one - but for the most part the money isn't in 60s and 70s albums that sold tens of millions; right now it appears to be more in the last half decade or so of releases.
- @carstenpoetter.lens spot on - I am of a similar mindset with the attention being the scarcest commodity in the digital era its hard to develop the same standing as artist had been able to historically in mainstream media.
IP as a stable asset investment class is the narrative but you buy these old catalogue and you still need to work them esp if you're buying at high multiples to achieve the returns required to payback.
However, I was digging through a Universal Music (UMG) report last year and it said that 46% of its recorded music revenue from frontline music (not back catalogue). I actually expected back catalogue's share to be much higher. Wonder how this has evolved the last 5-10 years. Maybe the staying power of older musicians with Gen Z is also dwindling. They dont know who they are unless they break on TikTok.
So you're seeing two trends (1) Front-line (new) music capturing more share (2) Fickle consumer habits and at least in web2 the inability to create artists with the same staying power. Back to it being all about clicks, likes and streams more than creating meaningful engagement. My POV is its because artists dont have the right tools or control to do this in the current landscape.