Music Publishing and the Catalogue Question

“Who controls the past controls the future. Who controls the present controls the past."

Somewhere in a field back in the summer of 2008, Rage Against the Machine used this line as the bridge in their opening song ‘Testify’ during their Friday headline act. It was the first time I had heard the phrase. Only later did I learn it was lifted from George Orwell’s 1984, where the line is a party slogan referring to the control of history and memory in the process of power consolidation.

In the recorded music industry, the past remains controlled by major labels. They still control 69% of recorded music and 45% of publishing revenue, largely through a business model that capitalises on favourable copyright laws that extend 75 years after the death of the composer. Owing to consolidation over the past few decades (where the big five has now become the big three of Universal, WMG and Sony), this has become even more pronounced in a streaming economy where what remains scarce is not distribution or music itself, but valuable copyright.

But is this set to change, and is the past becoming, well, out-of-date? Catalogue underpinned the CD boom, convincing music fans to re-purchase old albums they already owned on prior formats. Then, through the emergence of the digital economy, it provided a stable respite from the volatility of declining overall revenues in the wake of peer-to-peer (P2P) file sharing. With high margins (recording costs etc already covered, many re-issues being premium products) and low marketing costs (with fan audiences already established), catalogue has become the investment fund that labels use to turn artists into superstars.

Streaming threatens this through upending the business model that made catalogue so successful. As the business shifts to the lower margins of streaming and a model based on engagement, the early warning signs are there that catalogue will struggle to remain an influential component of labels’ revenue mix. With streaming’s emphasis on the new set to create a world of mega-hits and audiences with less inclination towards looking back, catalogue is at a tipping point. Either it changes to meet the market, or the market leaves it behind.

Labels are now seeking ways to repurpose older music into relevance during the streaming era. Films such as Yesterday and Bohemian Rhapsody seek to ameliorate the issue, but they are swimming against the consumption tide of streaming. Album listening has cratered in recent years, while playlists, amorphous and curated, are becoming the lingua franca of streaming.

While it is not quite a case of catalogue being dead, we are most certainly on the cusp of a tipping point, where conflicting interests over who controls copyright means catalogue’s slow decline will seek to be offset by smart product strategy and the continued marketing efforts around biographical films and documentaries that use music fans’ social and listening graphs over time to help them fall back in love with the music that sound-tracked their lives.