In the latest episode of Valholla NOW Radio, I covered the recent claim made by music historian, cultural critic, and jazz pianist Ted Gioia, who stated that the “song investment fad is over.” But is this really the case? As someone who deeply respects Ted’s work, I usually agree with his perspectives, his recent tweet about the decline of song catalog investments prompted me to dig deeper into the data and trends surrounding music catalog sales.
Ted’s tweet claimed that only a few buyers remain, mostly major labels, and that song values are dropping. He cited Pink Floyd’s recent catalog sale, which sold for less than the initially expected amount, as evidence that the market is shrinking. However, my research shows that this narrative isn’t fully accurate.
I responded to Ted on Twitter, respectfully challenging his assertion. I highlighted the impact of rising interest rates on slowing down catalog sales. Despite the slowdown, there were still three major catalog acquisitions announced in August 2024 alone, and more catalog deals have continued into October. Ted replied, stating that rising interest rates shouldn’t impact asset investments like song catalogs, but as you’ll see, multiple sources pointed to interest rates being the reason for the catalog buying spree. Even with the slowdown, various deals have been announced monthly this year.
In this video, we’ll look at the actual data around music catalog acquisitions in 2023 and debunk the idea that the song buying investment phase is over. There have been close to 40 deals announced this year, with only a handful involving major labels. This contradicts Ted’s statement that only a few buyers remain in the market.
I also dive into reports from financial publications like The Wrap and The Financial Times, which confirmed that rising interest rates did contribute to the slowdown in catalog investments. Firms like KKR, Apollo, and Blackstone have paused spending billions on catalogs, although Blackstone recently acquired Hipgnosis Songs Fund for $1.6 Billion. While Ted is right that low-interest environments create asset bubbles, the music catalog investment space isn’t collapsing as he suggests.
Additionally, Luminate reported that while the boom in blockbuster catalog deals has cooled off from its peak in 2020, investment in music catalogs is still strong. We’re also seeing growth in streaming royalties and publishing rates, which continue to increase the value of song assets. With the Federal Reserve recently lowering rates, we can expect an uptick in catalog acquisitions as interest in music IP grows again.
In conclusion, Ted Gioia’s assertion that the song investment trend is over is not entirely accurate. While the market has slowed, it is far from dead. Major players like Primary Wave, HarborView, and Reservoir have been actively acquiring music catalogs throughout 2023, and with rates now decreasing, the pace of deals is likely to accelerate. But don’t take my word for it—look at the numbers.
As I mentioned, the clip is part of the video playlist mixshow, Valholla NOW Radio. Watch the entire episode below.
Sources Cited HERE
