How Cities Can Use Music Rights To Drive Recovery
Cities — It is Time To Invest in Music Rights. Local music (and other cultural) IP can become your next economic growth area. Time to create CITY MUSIC REGISTRIES.
- This crisis shows us that we rely on local and regional government. When we need help, we turn to government. And cities are leading the way in fighting COVID-19.
- More music is being created in the crisis. According to Rolling Stone, distribution platforms are seeing 20–40% increases.
- Music (and art, culture, food) is more valuable than ever. If we — as a society — didn’t see value in it, there wouldn’t be hundreds of relief efforts.
- IP related industries in the US — for example — increased by 30% in value between 2010–2016, to $6.6t. The US’ total economy is worth $21t. IP accounts for around 35% of the US economy.
Now, some hard truths
- We care most about music when it is under threat.
- Relief funds are being paid for by general, capital expenditure or strategic investment budgets, like this one in Liverpool, UK. This means supporting musicians can be seen as a strategic investment or something that is part of a city’s general spending. But only when musicians are suffering.
- These resources — albeit welcome and needed — are being distributed to make us think that music needs to be supported because it is ‘the right thing to do’ or because it is charitable —This creates a framework that argues that music — and those who choose to make music as a living need our help because they can’t help themselves. This is not true & damaging.
- Much of the relief remains focused on traditional means of granting. This often creates inequalities in who gets what, because certain music genres (like hip-hop or EDM) tended to be less serviced by grants pre COVID-19.
- If money needs to get out the door, we often choose the path of least resistance. This path has never been equitable.
- I proposed that all relief funds be given as investments. There should be a business transaction, even if the requirement is simply to produce a new piece of content in 4, 6 or 12 months (if one is a musician, for example).
- Relief is ephemeral. We can’t provide relief for ever. But we can invest.
Here’s the paradox
- Musicians — singers, rappers, DJs, classical violinists, whomever — are creating more music than ever.
- Cities, foundations, funders and the music sector is providing more financial support than ever. I’ve counted over $100m alone.
- Music rights are lucrative investments. Hipgnosis has seen their share price increase by 13% in the crisis.
- Music rights are lucrative, effective and safe patient capital. Once purchased they provide a return for 70 years. They are immune to crisis (as we’re all listening to more now than we ever have). Those who trade in these rights are benefitting now.
- We tend to listen to older, more familiar music in crisis. it soothes us. Once again, this proves the long-standing value of music IP.
- A successful song can be a person’s pension. Remember that.
The more music, the more IP. The more IP, the more content to consume. The more content consumed, the more money is made by those who own it. This is a circular economy. Time to develop a model so all artists — and the cities they live in — can benefit.
Cities Are Music Investors…
- Cities own music assets already and earn from them. For example, Denver Arts & Venues ownership of Red Rocks Amphitheatre brought $65m in revenue in 2016.
- Cities have owned music venues for centuries. Greek amphitheatres were public investments.
- Cities fund music, the arts & culture. From public murals to community festivals, incentives to build amphitheatres to hiring music teachers in schools to subsidising recording studios, cities invest. And that means all of us — as taxpayers — invest (in addition to paying for it transactionally).
- Even in the most ‘limited government’ economic frameworks, music is being publicly funded. Austin’s new ‘heads in beds’ tax to support its music ecology is a great example.
- BUT… Cities fund the production of music; or the facilities to showcase it. IP is left to individual songwriters, their publishing companies, labels and management. Time to redraw this public /private partnership.
To Summarise
- If cities are providing emergency relief funds to musicians and artists through general, capital infrastructure or strategic investment funds…
- If musicians are making more music than ever…
- If the most lucrative tool we have to create better music economies in the future is to register more work, monitor it better and ensure those who are responsible for it are paid fairly for it…
- If we all agree we need better ecosystems for musicians, artists and creatives in the future (that provide workers rights, health care, fair pay, gender equality) etc…
We can change. Plus, music IP collection is diversifying. For example, Unison in Spain (which I am an owner of, for declaration purposes) is creating a private model to challenge centuries old practices.
The Solution…
City Music Registries (or state, or town)
Think of a local investment fund — owned by the city (and as a result, all the residents) whose investment product is music created locally. If a musician is provided a grant, relief or investment, a small percentage of its value — say 5% — could be placed in a local investment vehicle, whose sole responsibility is to use the revenues — which will add up over time — to invest in and improve the local music economy & ecology. Yes, this will take time. But we need a better foundation now, for a better future for all of us.
Denver did this with its Music Advancement Fund (which is made possible because it owns lucrative city assets). This could be done in partnership with global music rights organisations — be they public or private.
Over time, such a vehicle would increase the amount of rights (i.e songs) being registered in a place. That is genuine investment.
This article is part of a series. Read the rest here.
