Justin Bieber sells his song catalog for US$200 million: why did he make this decision?

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Justin Bieber sold his rights to his songs to Hipgnosis Songs Capital for $200 million.

The firm now owns the pop star’s share of his entire repertoire, which includes his biggest hits of recent years, such as Baby Y sorry.

Bieber, one of the most successful artists of the 21st century, thus joins a growing group of artists who have sold out their catalogues.

After the sale, Hipgnosis you will receive a payment each time be transmitted one of the songs of the Canadian Idol or is used on radio, television or in the movies.

image source, Getty Images

The company, a $1 billion deal between financial giant Blackstone and Britain’s Hipgnosis Song Management, acquired Bieber’s copyright to 290 songs.

He has also obtained his participation in the original recordings of the songs.

That includes all of your music released before December 31, 2021.

Although Hipgnosis has not disclosed the terms of the agreement, a source told the AFP news agency that it paid some US$200 million.

More and more artists are selling shares of their works to music funds, although the trend is more common among older musicians.

music legends Bob Dylan and Bruce Springsteen sold their catalogs to Sony in the last two years.

Springsteen received $500 million from the sale of his entire discography.

bruce springsteen

image source, Getty Images

Caption,

Bruce Springsteen also sold the rights to his music.

Analysis

For Sean Farrington, presenter of the BBC business shows Wake up to Money and Today

Today’s emerging artists may be looking at Justin Bieber’s retirement plan as closely as his new music releases.

Bieber had two options: keep getting paid every time one of his hits was played, or sell the rights all at once for an astronomical sum.

The star has opted for the latter, a decision usually made by singers much older than him.

As the investor who bought the rights told me: “It gives him the chance to put his money to work the way he chooses, and it takes the risk out of his future.”

How will you get a return on that sum? Perhaps the queen of music entrepreneurship, billionaire Rihanna, could give you some advice.

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Songs “more valuable than gold”

Hipgnosis Songs Capital is a separate entity from the Hipgnosis Songs Fund, which has also built a catalog of classic hits and invites large institutional investors.

The latter fund has been listed on the London Stock Exchange since 2018, while Hipgnosis Songs Capital is not listed on the stock exchange.

The man behind both companies is Merck Mercuriadis, who has claimed that hit music can be “more valuable than gold or oil”.

He called Bieber’s music “arguably the definitive soundtrack of the streaming revolution” with 13 tracks that have garnered more than 1 billion streams on platforms including YouTube and Spotify.

Justin Bieber in Los Angeles in December 2022 during the premiere of the series about his life.

image source, Reuters

Caption,

Bieber in Los Angeles in December for the premiere of the series about his life.

Drop in stock price

Since his audience is still relatively young, he added, the royalties will keep coming for “60 or 70 years.”

“The beautiful thing about music is that when these songs become hits, they become part of the fabric of our lives and live forever,” Mercuriadis told BBC Radio 4’s Today programme.

However, the price of your fund’s shares has fallen more than 27% since last yearby lowering the interest of investors.

In December, Mercuriadis called the share price situation a “disappointment” but said he believed in the long-term profitability of the business.

“In the broader music market, people continue to listen and pay for music despite rising cost-of-living issues, with US audio streams topping the 1 trillion-year mark for the first time. “, said.

“These are indicators of the further growth we will experience as revenue flows into Hipgnosis in the collection process.”

Despite not being involved in that purchase, the fund’s share price rose 1.6% after the Justin Bieber deal was announced.

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