The music catalog acquisition game continues to hot up – with the major music rightsholders getting stuck in.
Universal Music Group, don’t forget, spent $1.7 billion on music rights and advances in 2020, including the $300m-plus acquisition of Bob Dylan’s song catalog.
Sony Music Group, meanwhile, recently confirmed that it spent $1.4 billion on music-related acquisitions in just the six months to end of May this year – including spending a nine-figure sum on the song catalog of Paul Simon.
Today (June 17) it’s Warner Music Group‘s turn to make a splash. WMG has confirmed that it has acquired the entire recordings catalog of 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 sources close to the deal who’ve confirmed that figure, but also told us the price was lower than $150 million.
This news is interesting for a number of reasons. Firstly, it hints that Warner’s catalog acquisition strategy today may be leaning towards hits created in the past 20 years.
Adding to this theory is the fact that WMG recently acquired a majority stake in a portfolio of songs by Bruno Mars for an undisclosed sum.
Hits created by the likes of Bruno Mars and David Guetta are often referred to in the M&A world as “shallow catalog” – or modern pop classics, if you will. This music does particularly well on streaming services as things stand – but how many of these hits will still be being heavily streamed in 10 or 20 years’ time?
Some industry observers believe music like Guetta’s best-known hits (released around 2009-2011) will ultimately be stung by a “decay” in popularity over the coming decade. Others, however, point to the fact that a tune like Guetta’s Titanium (feat Sia) was released 10 years ago, and continues to maintain a handsome level of streaming popularity.
Indeed, Guetta remains the eighth biggest artist in the world on Spotify today, with over 54 million monthly listeners.
Another worthwhile observation on this point comes when we monitor the changing shape of a very active music M&A player, Hipgnosis Songs Fund.
According to fiscal filings, in FY2019, just 10.2% of Hipgnosis’ value was tied up in songs that were more than 10 years old (i.e. “deep catalog”).
Since then, Hipgnosis has pursued an active strategy to broaden its portfolio far beyond modern hits (see its acquisitions of 50% of Neil Young’s catalog and 100% of the Lindsey Buckingham song catalog this year for evidence).
As a result, a transformation: in the 12 months to end of March this year, some 60.2% of Hipgnosis’ value came from songs that were released over 10 years ago.
An additional interesting aspect of the Warner buy announced today: David Guetta’s recorded music catalog was assumed by many to have been acquired by WMG as part of the major’s buyout of Parlophone Label Group in 2013.
However, it now appears that what WMG really acquired there was an exclusive license for Guetta’s recordings. That license has presumably now expired – returning ownership of the masters catalog to the artist, and enabling him to sell it on for $100 million-plus.
It therefore seems likely that Guetta signed his biggest hits over to Parlophone/Warner in the first place on a 10-or-so-year licensing deal.
You’d expect many other superstar artists were doing similar kinds of deals with record companies at that point in history.
Could this suggest that more artists who were making huge global hits in the noughties will soon also be free to sell their recordings catalogs anew?
And if so, will the music M&A market, so awash with publishing rights for so long, soon see an uptick in the acquisition of master rights?
As ever, MBW will be watching closely.
Announcing the Guetta deal today, Max Lousada, CEO, Warner Recorded Music, said, “It’s rare for an artist to not only define a genre, but transform it.
“David has been doing that for over two decades – igniting worldwide audiences and influencing whole generations of talent. He continues to have an extraordinary impact on the evolution of dance music, while innovating and collaborating with new voices in dynamic ways.
“For all he’s achieved so far, there’s so much great music, creativity, and originality still to come. All of us at Warner are very happy to expand our partnership with this global icon.”
“David continues to have an extraordinary impact on the evolution of dance music, while innovating and collaborating with new voices in dynamic ways.”
Max Lousada, Warner Music Group
David Guetta said: “I’m super excited about the new music I’m working on. And even more excited that I have started to play all this new music live to my fans again 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 ensure I can keep innovating with exciting new projects, while also working my extensive catalogue and continuing to build my career.”
Jean-Charles Carré, David Guetta’s business partner and manager, added: “A lot of people approached us to express interest in David’s catalogue. We decided to continue our partnership with Warner because they have a knowledge of and passion for David’s music, with a global team that’s constantly working to place it in new contexts.
“We’re super-excited about some of the deals they’re striking with new partners and their expansion into new territories. This is about proactively working David’s catalogue and new music together.”
And Bart Cools, EVP, Global A&R and Marketing, Dance Music, Warner Recorded Music, says: “I’m deeply honoured that David has decided to renew our collaboration. He’s a genre-shaping, era-defining artist whose music touches billions of people around the world. I’ve heard some of his new music, and I know it’ll blow people away.
“David is a creative spirit who never rests on his laurels. Frankly, he never rests at all. We’ve released eight tracks in the first five months of 2021, and he’s not slowing down.”
David Guetta released his debut album, Just A Little More Love, in 2002, followed by works such as Guetta Blaster (2004) and Pop Life (2007).
His 2009 album, One Love, took him from the clubs to a mainstream audience, with its hit singles ‘When Love Takes Over’, ‘Gettin’ Over You’, ‘Sexy Bitch’, and ‘Memories’.
His 2011 album, Nothing but The Beat, saw his commercial success reach new heights with the hit singles ‘Where Them Girls At’, ‘Little Bad Girl’, ‘Without You’, ‘Titanium’, and ‘Turn Me On’.
This was followed by Listen (2014) and 7 (2018).
In 2021, Guetta has released singles including ‘Bed’ with Joel Corry and Raye, and ‘Heartbreak Anthem’ with Galantis and Little Mix, both of which have been Top 10 hits around the world.Music Business Worldwide