Music Rights Is Not A Global Economy. We Need To Change That

Until music infrastructure exists and functions everywhere, music as a whole will continue to underperform and be undervalued. This impacts all aspects of music as an economy in its most basic sense.

Three years ago, Bloomberg published its list of alternative investment tips for 2021. Interest rates were low and along with whiskey and rewilding, music was profiled. The article explained; “the asset class has jumped to the top of the charts as music streaming surges and entertainment forces such as Netflix
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salt their shows with classic tunes.” At the time, Hipgnosis Songs Fund, one of the most talked about investment firms, had a total net asset value return in the 6 month period ending 30 September 2020 of 11.6%. Fast forward to 2024 and circumstances have changed. Hipgnosis, for example, had dividend payout suspended. Its share price is down by a third and yesterday, its value was calculated at $690m less than its previous valuation.

Yet, music copyright valuation continues to grow at an accelerated pace. The global valuation ascribed to music copyright reached $41.5bn, according to industry economist Will Page. This is 14.5% more than 2022. More folks are streaming music than ever before. Vinyl sales are up. Concert ticket sales surpassed 2019’s figures, according to Live Nation. And beneath all of this are the songs, or copyrighted works. Without them, there would be no tours, no vinyl records and no streaming services. Funds that invest in this intellectual property are expected to continue to see a return. But across the industry, this is not the case.

There are reasons for this – based both on data and perception. Qualitatively, the way the music industry – as a monolith – is perceived continues to be challenged. For example, in BBC’s daily news podcast, Global Story, a report on Taylor Swift referred to the music industry as ‘in crisis’ despite the macroeconomic data arguing otherwise. This is supported by the evidence of burgeoning inequality. While arenas and stadiums celebrate a bumper year, small music venues in the UK suffered their “worst year in a decade” according to the Music Venue Trust. Music education hubs – often the places where music is first created – are being cut by two-thirds in 2024-2025. However, quantitatively, the data reveals a different story. Music listenership is up, according to the IFPI. Revenue collections from CISAC, the international trade body representing collective management organizations was up 28% in 2022. Simply, more music would mean more return, especially for firms that own much of the music that is consumed, such as funds like Hipgnosis, Round Hill or Primary Wave or the three multinationals, Universal Music Group, Warner Music and Sony Music. However, debt is now more expensive, and liabilities are outstripping return. Listening to more music is not enough.

But there’s more to the story here. One of the challenges is not how valuable music copyright is or can be, but how it is managed around the world. The systems in place to administer copyrights and pay royalties vary wildly across borders and jurisdictions. There are no standard practices and in many countries in the world, including some of the world’s most populous, there are no frameworks. Music, at its most foundational level, is not an economy in many places, because there is no infrastructure to support it. Music that is listened to but not paid for remains endemic. Unclaimed royalties add up to hundreds of millions of dollars. And even where robust systems exist to track music copyrights, value is questioned. Universal Music Group abandoning TikTok is one such example. In 2021, Peloton paid more money to the music industry for its copyright than TikTok. For a moment, imagine a TikTok video without a soundtrack.

This impacts everyone. Ascribing less value on music as a utility reduces its value to an economy. This not only impacts investors in music, but also audience numbers at grassroots music venues. If we’re all listening to more music, all those involved should benefit.

But music is not a traditional financial product. Unlike a building, you can’t see it and unlike a FTSE security, it rarely fluctuates due to company practices or fiscal events. It is more like a farm. If each individual music copyright is a seed planted in a large field, how the seed is nurtured, its relationship to the environment around it – some elements that can be controlled and others that can’t – all impact its ability to flower, grow, fruit and be sustainable. In order to build sustainable, year-on-year revenues that deliver a yield and protect the farm, the most cost-effective strategy is continued maintenance.

For music, this would mean a wholesale reframing of music as an economy, and what is required, top-down and bottom-up, for it to flourish. This requires a rethink. The industry – if seen singularly, does not resemble a thriving field. It is more a smattering of established trees that produce year-after-year without much care for the soil they grow in. The priority is these trees, many planted decades before, not sowing new seeds that may, eventually, grow into productive trees. As a result, soil degrades. Some trees die. And there is less growing to replace it. And what gets to the table is impacted. We get less from less. Yet, music, unlike agriculture, does not receive extensive subsidies to cover loss, climate change or an increase in price, interest rates or repayments.

What we’re left with is a paradox and most importantly, a missed opportunity. Every grassroots music venue is an incubator of talent. Every stream should return revenue to those who own it. The music industry should be worth far more than it is, whether one is investing in a community hub or in a fund or a security But until we rethink, and re-engineer what we do, we will see this paradox expand. More music everywhere, more of us enjoying it, and the benefits not being adequately spread.