Bringing back the hits: Mining music catalogs for gold
Traditionally, in the music industry, acts like Air Supply were only as good as their next hit. But for people like Air Supply's Graham Russell and Russell Hitchcock, times are changing. In 2020, Bob Dylan sold his entire catalog to Universal Music for a reported $300 million. Bruce Springsteen sold to Sony Music a year later for about $550 million.
Larry Mestel's company, Primary Wave, has been buying music catalogs since 2006. "Can you imagine Sony without Bruce Springsteen as part of their roster?" he told correspondent Kelefa Sanneh. "They were gonna have to pay whatever they had to pay to keep Bruce Springsteen."
Two years ago, Air Supply sold a portion of their music rights to Primary Wave. The company places hits like "All Out of Love" in TV shows (like "Young Sheldon"), and in commercials, such as this ad for AAA Insurance:
Sanneh said to Hitchcock and Russell, "This is partly about celebrating and rewarding you for the music that you've made."
"Whereas before, if you signed a seven-album deal, they were promising to take all your money for seven albums!" laughed Russell.
Asked if he could remember the first contract he ever signed, Hitchcock laughed, "Yeah, I think it was a blank piece of paper with our signatures at the bottom!"
"And can you give people a sense of, like, how big a deal [Primary Wave] was?" Asked Sanneh.
"It was big," Hitchcock replied.
"Big? We're talking, what, seven figures?"
"Bigger than seven."
Hitchcock and Russell also retain veto power over where the songs are placed, in part because of a bad experience with soda, an audio commercial for Dr. Pepper they did in the 1980s. "It was awful!" Russell laughed.
Mestel has bought rights of artists ranging from Smokey Robinson to Kurt Cobain. He held as an example a Converse sneaker bearing the writing of Cobain. Sanneh asked, "This sneaker played an important role in the development of your company, right?"
"It did," Mestel replied. "We were the first company actually to put lyrics on the side of sneakers, and to turn the deal from a merch deal into a music deal, right? Because the lyrics had to be licensed."
In 1985 Michael Jackson outbid his former friend Paul McCartney for the publishing rights to The Beatles' catalog. It went for $47.5 million, but it was worth a lot more. And some people took away a simple lesson: NEVER sell your songs.
Sanneh asked Mestel, "How did you fight that stigma?"
"Well, today, it's easy, right? Because if a Bruce Springsteen is gonna sell or a Sting is gonna sell and a Paul Simon is gonna sell and a Bob Dylan is gonna sell, you know, that kind of opens up the floodgates for artists in general," he replied.
Mestel's company now faces deep-pocketed competitors like Hipgnosis Songs Fund and Round Hill Music. The market for songs is maturing – and so are the singers. Mestel said, "They're in their 70s and 80s. So, artists are interested in estate planning."
"Are there certain genres that you're interested in, or not as interested in?"
"Yeah, classic rock, urban, we do jazz, we do soul," Mestel said. "We don't typically do a lotta country music. You don't see a lot of country songs in commercials."
Air Supply's love songs are no longer on the pop charts, but Russell Hitchcock and Graham Russell say the opportunities are limitless.
"Years and years and years ago they actually had a Formula One car sponsored by Durex," Hitchcock said. "I went, 'What? Condoms, you know, sponsoring an F1 car?'"
"Has there ever been a condom ad using an Air Supply song?" asked Sanneh.
"Hey, I'm all over that," Russell laughed, singing, "You're all out of love! I'm so lost without you …"
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Story produced by Mary Raffalli. Editor: Emanuele Secci.