In this article, we discuss two very different copyright matters. The first deals with the fact that the finance industry is suddenly showing a great deal of interest in music copyright. The second deals with the illegal sale of a single CD. Yet, both stories highlight some important aspects of copyright law.
COPYRIGHT AND THE FINANCE INDUSTRY
Selling future royalties
For some time there have been reports of music catalogues being sold – a while back David Bowie's estate sold his music catalogue to Warner Music for USD250-million, whereas more recently Bruce Springsteen sold his music catalogue to Sony Music for some USD500-million. The attraction of such a sale to the seller is obvious – the musician (or his or her heirs) receives a large lump sum, the sort that would allow for a very comfortable retirement. As for the buyer, well it clearly takes a calculated risk, betting that over time the copyright will bring in far more than the purchase price.
The finance industry enters the market
A recent article that appeared in the Financial Times, “ Asset manager Pimco joins song copyright investment frenzy” discusses the fact that the finance industry is now showing a real interest in music copyright. It seems that finance companies are buying up music catalogues in the expectation that these will deliver impressive returns.
Some big numbers
According to the article asset manager Pimco (which has some USD2.2-trillion under management apparently) is teaming up with music giant BMG in order to acquire music catalogues. A year ago the same BMG agreed a huge deal with private equity group KKR, allocating USD1-billion to buy music rights. Two other finance companies that have invested in music are Blackstone and Apollo Global Management. There's clearly a great deal of interest in music right now!
Many happy returns
According to the FT article, the perceived benefit of music rights is that there are consistent cash flows. The article makes the point that revenue from recorded music has grown for six consecutive years, with a 7.4% rise in 2020 to USD21.6-billion. The article says this about music copyright: “Large institutional investors are treating music copyrights like bonds that offer a predictable yield. Copyrights generate consistent cashflows and are relatively uncorrelated to financial markets or the global economy.”
There's always a COVID-19 angle
The article goes on to say this: “As more buyers enter the market, song valuations have soared, spurring musicians and songwriters to become ‘willing sellers' of their catalogues, particularly with touring income on hold during the pandemic.”
The legal point
Copyright lasts for a very long time. Which no doubt explains why it is seen as such a good investment!
A COPYRIGHT INFRINGEMENT CASE ABOUT A SINGLE CD
Slow-hand?
Turns out that Eric Clapton is no slow-hand when it comes to dealing with copyright infringers. Clapton recently sued a woman in Germany for copyright infringement in a case where the stakes were, on the face of it, very low indeed – the woman had offered and sold on eBay an Eric Clapton CD that her husband had bought in the 1980s. She ended up with a court judgment against her, together with an order to pay Clapton's legal costs in the sum of roughly GBP3000. Something that must have been very galling if you consider that she sold the CD for EUR9.95.
It doesn't pay to be stroppy
Unsurprisingly this case attracted some negative publicity. It then came to light that the woman's response to the cease-and-desist letter had been quite feisty. This is what she said: “I object and ask you not to harass or contact me any further…feel free to file a lawsuit if you insist on the demands.” Clapton's lawyers accepted the challenge!
Some things just don't play well in the media
When this case made the news Clapton's team sought to justify its actions by suggesting that the woman had herself to blame: “Had she explained at the outset the full facts in a simple phone call or letter…any claim might have been waived and costs avoided.”
The matter was finally resolved with this comment from Clapton's management: “When the full facts of this particular case came to light Eric Clapton decided not to take further action and does not intend to collect the costs awarded to him….She is not the type of person Eric Clapton or his record company wish to target.”
The legal point
The unauthorised doing of any act that falls within the exclusive rights of the copyright owner is an infringement, no matter how trivial it seems. Prosecuting cases like this does, of course, send out a clear message that infringement will not be tolerated.
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