These are boom times for acquisitions of publishing catalogues, with the likes of Hipgnosis, Round Hill Music and Primary Wave competing with traditional rightsholders and deep-pocketed investment firms to snap up music rights.
As chief content officer at Primary Wave, Natalia Nastaskin has a close-up view of what happens once these acquisitions are closed and the work begins on making the most of those catalogues. At the NY:LON Connect conference yesterday, she was interviewed by journalist Bernard Zuel about what she has learned.
Nastaskin joined Primary Wave at the start of 2021 from United Talent Agency. Two different worlds, but not so different, as she explained.
“Talent representation, particularly inside of a large agency – music talent in my case – really encompasses touching and collaborating with other parts of the agency. So whether that’s brand partnerships, digital, film, television, books etc,” she said.
“And talent representation requires us to mine all opportunities for the client, the artist. Well, at Primary Wave, the practice is very, very similar… We represent catalogues the way an agency represents artists.”
“We look at brand partnership opportunities. We look at film, television, podcasts, emerging platforms, games, NFTs. So it’s very very similar in terms of how Primary Wave views its business, and does its business.”
‘Multiples are the highest they’ve ever been’
Nastaskin went on to outline the key trends that she sees driving the current boom in catalogue sales. First, there’s the predictability of revenue streams for songs, which she noted have “become an asset class” in investors’ eyes.
Second, and more US-specific, the capital gains tax rates – charged when someone sells an asset that has grown in value, for example a song catalogue – are low at the moment, but there has been speculation that they may rise in the near future. Something that may nudge musicians into seeking a sale now rather than later.
“There are also the opportunities that may not have been mined or uncovered for a lot of these catalogues in the past, that now are becoming more and more common,” said Nastaskin. In other words, some musicians are selling their catalogues to companies they believe can do a better job of unlocking the value.
Another incentive to sell now: “Multiples are the highest they’ve ever been,” noted Nastaskin. “Because songs do have these predictable revenue streams, you have venture capitalists all over the world looking at them, and as more competition enters the marketplace, the multiples are driven up.”
She outlined how Primary Wave approaches acquisitions, drawing up a list of “opportunities that we feel have not been mined or have not been identified for a particular song or catalogue of songs” to pitch to the songwriter or their representatives / estate.
Primary Wave prefers to keep a hands-on approach with its songwriters and their representatives, including leaving a stake in catalogues with them.
“Our model is not to buy 100% of a catalogue, usually. Now, if a songwriter or an estate says ‘you must buy 100%’ then of course we will take that into consideration and we’ll base our offer on that,” she said.
“But where we can, we prefer to have the songwriter or the estate retain a chunk of the catalogue… Number one, because we like the partnership, frankly, and we want to do justice to the legacy of the artist, and we want to make sure that we are always in touch about where we’re heading with some of our marketing efforts, and making sure that we are on brand and on message and on target, frankly!”
“But also, we love seeing the value of the catalogue enhanced and increased, so that through our efforts, whatever pice remains with the songwriter, they’re seeing it grow in real-time, or the estate is seeing it grow in real-time.”
‘It’s still feeling a little wild wild westy!’
Among those opportunities for music catalogues, NFTs loomed large in Nastaskin’s keynote. They are a big part of Primary Wave’s pitch when it is trying to buy catalogues, and she is working hard to identify what that space can do for songs and songwriters.
Here, too, partnership is key. “I can ideate NFTs all day long, but I want our artists to tell us: ‘You know what’s really special to my fans? You know what I think my fans would really get a kick out of? You know what my fans would really consider collectible is X, Y and Z’,” she said.
“And then I want to make sure I take that into consideration as I’m launching some of the initiatives that we’re working with.”
Music NFTs is still a very new space. “It’s still feeling a little wild wild westy!” said Nastaskin. “But what we’re learning is really interesting… we think of them as community-building, fan-engaging, collectible, gamified extensions of the artist merch table.”
What is Primary Wave learning from its experimentation with NFTs? Nastaskin said that one lesson is that fans appreciate “luxury drops” that are scarce and more expensive, but that they still want the more affordable, accessible tokens too.
“They want the 10-dollar ones and they want the 15-dollar ones, because that actually breeds more attainability and more sustainability for the relationship. So that it’s not just the quote-unquote whales who are able to get into this space and buy everything up. That we’re also serving the everyperson.”
One interesting point: Primary Wave is not yet diving in to selling music rights as part of NFTs. Nastaskin explained why.
“We are trying to steer clear of that. I know it sounds crazy coming from a publisher, that we’re trying to steer clear of incorporating compositions and recordings into our NFTs!” she said.
“But for the time being, we’re trying to steer clear of anything that is subject to a publishing deal or a recording deal. Because there is no standardised method of clearances at the moment.”
Nastaskin stressed that Primary Wave is not letting new opportunities like NFTs distract it from the healthy business that can be done from more traditional revenue sources: film, musicals and TV for example.
“The boomers, the Gen Xers, the Gen Yers, they’re still very much consuming content in the more traditional ways,” she said. However, the company is also keenly aware of the need to also unlock opportunities from what younger people are doing.
“For the younger gens, I think you need to meet them where they are, whether that’s TikTok or it’s YouTube or it’s any number of technologies where young people are not only discovering music, but are also creating and accessing content,” she said.
“We just have to be more forward-thinking and embrace those platforms, and be ready to launch there as much as we are ready to launch on Netflix and Amazon and HBO.”
Nastaskin’s keynote was part of the ‘Publishing – Buying & Managing Catalogs and Growth Markets’ track at NY:LON Connect, which was sponsored by Muserk. Music Ally and Music Biz co-run the conference, and you can read all our coverage here.