Unwilling to wait for future earnings, during 2021, Bruce Springsteen and Paul Simon sold their music catalogs. Meanwhile, last year’s deals included Kenny Chesney, Justin Timberlake, and Sting.
Now it’s Justin Bieber
In what is probably a $200 million deal, Hipgnosis Songs Capital bought the right to get income from a big chunk of Justin Bieber’s recordings. As a result Bieber receives his probable future earnings today instead of waiting for future paychecks. He is monetizing what could be called his intellectual property.
A catalog sale could include copyrights and royalties from streaming.and radio plays. The buyer receives revenue when songs or even their snippets are played in films, commercials, at football games, or in bars. In addition to Hipgnosis. the buyers have included Sony and private equity groups. Paul Simon reputedly got 30 times his annual revenue. Had the Bieber sale existed last year, Hipgnosis would have received the income from Bieber’s 16.6 billion on-demand official streams.
These were past deals:
Our Bottom Line: Monetization
For governments and entertainers, the definition of monetization is somewhat different. Yes, it always relates to directing money where it had not existed. However, for government, the central bank has to be in the loop.
With government, monetization starts when a country’s treasury department issues debt as some type of a bond. Next, the central bank buys the debt. As a result, the central bank has the bonds and the treasury has the money which it can spend. So–we have the creation of money by a central bank–its monetization–that went to the treasury. After the treasury spends the money on a war or a stimulus program, it winds up in people’s pockets and their bank accounts.
Sort of like Justin Bieber, the government has money to spend now instead of waiting for later.
My sources and more: After hearing about Justin Bieber from Bloomberg Radio, I went to Billboard to learn more. My path from there took an unexpected turn when I discovered an excellent Yale primer on monetization. I had not realized that private and public monetization were fundamentally different. And finally, for more on other entertainers Forbes and econlife had the facts.