Forget the stock market: Investors are pouring their money into old songs

Investment funds are making big bets on the nostalgia power of “Single Ladies.”

September 10, 2020

People are betting millions of dollars on your future nostalgia listening.

Last month, Concord Music Publishing — a group that holds the rights to 400k+ copyrighted songs — paid the pop rock band Imagine Dragons $100m for its back catalog, entitling them to all future revenue from the band’s previously recorded tracks.

A SoftBank for old songs?

The deal is like an investment bond in music form: Concord hopes that these songs will stay popular for decades, earning back way more than that $100m.

A similar firm, Hipgnosis Songs Fund, has raised $500m+ to buy up rights to “Single Ladies” by Beyoncé, “Umbrella” by Rihanna, and “Baby” by Justin Bieber.

But this kind of investment can be a gamble

Back in 1997, David Bowie promised investors that if they bought his “Bowie Bonds,” they’d get a piece of his earnings for the next 10 years in exchange for upfront cash.

Investors plunked down $55m (~$88.8m in 2020 dollars). Then CD sales crumbled, and Bowie made off with a huge profit. (When he died in 2016, Bowie left his back catalog to his family.)

Why is this blowing up right now? 

These days, largely thanks to streaming, musicians don’t make all that much money from their actual royalties.

Today’s biggest performers earn 75+% of their income from constantly touring and putting on live shows.

But right now, with all that revenue on hold, bands like Imagine Dragons are willing to do “Whatever It Takes” to make ends meet.

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