Same Old Song: Private Equity Is Destroying Our Music Ecosystem

subscription growth for streaming services like Spotify and Apple Music seems likely to slow, as the finite number of possible customers hits its limit. With less growth, values for music rights are expected to level off.

As interest rates have risen, the surge has faded. In February, word surfaced that the private equity behemoth KKR was beating a quiet retreat from the music space. More recently, Hipgnosis Songs Fund, the owner of “Super Freak,” cut the value of its music portfolio by more than a quarter in the wake of a shareholder revolt.

Musicians’ groups have been fighting for fairer pay, and this month, Representatives Rashida Tlaib of Michigan and Jamaal Bowman of New York, both Democrats, introduced a bill intended to increase artists’ streaming payouts.

In the 1990s, as the musician and indie label founder Jenny Toomey wrote recently in Fast Company, a band could sell 10,000 copies of an album and bring in about $50,000 in revenue. To earn the same amount in 2024, the band’s whole album would need to rack up a million streams — roughly enough to put each song among Spotify’s top 1 percent of track... See more

it’s hard to argue that already wealthy artists should receive 1990s-level compensation for the type of flagrantly recycled fare that the private equity cohort demands.

Private equity firms have poured billions of dollars into music, believing it to be a source of growing and reliable income. Investors spent $12 billion on music rights in just 2021 — more than in the entire decade before the pandemic.

Historically, record labels and music publishers could use the royalties from their older hits to underwrite risky bets on unproven talent. But why “would you spend your time trying to create something new at the expense of your catalog?” asked Merck Mercuriadis

Like the major Hollywood studios that keep pumping out movies tied to already popular products, music’s new overlords are milking their acquisitions by building extended multimedia universes around songs, many of which were hits in the Cold War — think concerts starring holographic versions of long-dead musicians, TV tie-ins and splashy celebrity b... See more

Take Whitney Houston’s 1987 smash “I Wanna Dance With Somebody (Who Loves Me),” which was bought in late 2022 as part of a $50 million to $100 million deal by Primary Wave, a music publishing company backed by two private equity firms. The song was recently rebooted into our collective hippocampus via a movie about the singer, titled, naturally, “I... See more