- 6 minutes ago
Music catalogs have quietly become one of the most valuable assets in entertainment — so who’s really shaping the future of music ownership? Golnar Khosrowshahi, founder and CEO of Reservoir Media, joins Billboard On The Record to break down how she built a music catalog powerhouse before the space became crowded, why music rights offer long-term, reliable value and how her team approaches acquisitions with artists, estates and families. She also discusses preserving legacy while driving cultural relevance for new generations, how licensing, film/TV and biopics impact catalog value, the role of sampling in today’s music economy and how generative AI could reshape valuations across the industry.
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Billboard On The Record is a podcast in partnership with SickBird Productions.
Love what you hear? Follow Billboard On The Record on Instagram, Apple Podcasts, Spotify and Youtube @billboard so you never miss an episode.
Billboard On The Record is a podcast in partnership with SickBird Productions.
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MusicTranscript
00:00:00Britney Spears, Taylor Swift, Miles Davis, The Weeknd, Bob Dylan, and Whitney Houston.
00:00:07What do all these artists have in common? They have all bought or sold part of their musical
00:00:12catalogs over the last few years for eye-watering prices. We're here today in New York City to
00:00:17learn more about why that is and where the catalog market is going in 2026.
00:00:26Golnar Khosrowshahi, welcome to On The Record. Thank you so much for having me. Thanks for being here.
00:00:31I'm really excited to have you because I don't know if you know this, but you were like my first
00:00:35ever video interview when I got to Billboard in 2021, 2022. It was women in music. Yes. I remember
00:00:43you had like amazing lighting and at this amazing setup and I was like in my living room with like
00:00:48no lights on and I was like, oh my gosh, I should have prepared for this more. So we got
00:00:53the lighting
00:00:53here now. Okay. Great to be here. So today we're going to talk about like all things catalogs. You've
00:01:00been working in this market for a very long time through Reservoir, your company, which you founded
00:01:04in 2007, right? Yes. Okay. So I want to start there actually. Let's get some background before we head
00:01:11into what's happening in the catalog market in 2026. You founded Reservoir in 2007 at a time when
00:01:17this was not as hot of a market as it is now. So tell me about why you decided to
00:01:23start your company
00:01:23then and what you saw in the catalog market then that poses a great opportunity.
00:01:29Not hot is an understatement of what characterizes and how to describe the market in 2007. I wish I
00:01:35could tell you that it was with some great foresight in the future value of assets that at the time
00:01:43we
00:01:43were buying at two, three, four times multiples, but that's not the truth. The truth is that the
00:01:51business was attractive because of the value of copyright and the long-term value of copyright
00:01:57and this characteristic around perpetual cashflow. And so from just a business perspective, that was
00:02:06attractive, a continuous cashflow generating asset. But you're right. I mean, it was the not hot,
00:02:13darkest days of the music business. And there was the threat of piracy and there was the threat of
00:02:20uncertainty around future monetization. And there was the threat of whether streaming was going to
00:02:28become the platform through which people consume music. I think people weren't convinced of that
00:02:36by any means. And so all of that uncertainty led to an industry that contracted significantly in revenue
00:02:46from what it had been. We certainly saw it as an opportunity, but not with some magic
00:02:56or not through some sort of crystal ball that said, you know, in 15 years, that two, three,
00:03:03four times multiple that you're paying today is going to translate into a 20 times multiple for that
00:03:11same asset. Yeah. And can you explain real quick what you're referring to when you say multiples?
00:03:17Yes. So the value of these assets is determined by the cashflow that they generate
00:03:24industry has terms for it. But from a business standpoint, you're just looking at a gross profit
00:03:29line. So these assets generate a certain cashflow and the multiple is essentially valuing
00:03:38what the future cashflow is. And you are paying two times that gross profit line or today,
00:03:47anywhere from 15 to 20 times and has been higher for some other assets.
00:03:51Man, that's crazy. And so the catalog market started to become really hot in like, what would
00:03:58you say, the late 2010s or so? What was that inflection point when you started to notice that
00:04:04there were a ton of new entrants who are trying to buy music catalogs and the prices were starting
00:04:09to rise higher and higher?
00:04:12I mean, I think you're right. I think certainly there was compelling data.
00:04:17The compelling data really stuck when we hit this inflection point where the industry was
00:04:27no longer in this state of digital deflation, meaning that there was some growth now that
00:04:33was going to outpace essentially the suffering from the years prior. I agree with you that that's
00:04:40certainly when you saw new entrants. I do want to point out, though, that KKR, for example,
00:04:48had been in this business since the late 2000s.
00:04:54Oh, wow.
00:04:55So at that time, they were already in the business. They had a joint venture with BMG. I also want
00:05:04to
00:05:04point out that the Dutch pension fund was in the business. So investors that had very much
00:05:12the same characteristics as investors today, institutional pension funds, long hold people
00:05:20who are holders of these long hold assets, they were always interested in this because
00:05:28the constant, despite how the industry has changed, the constant has been that these are assets that
00:05:35generate a continuous perpetual annuity type cash flow. And that's always attractive to an investor.
00:05:41So the sophisticated investors were always there.
00:05:45Interesting. Yeah. Because when I think of, you know, before the big catalog boom,
00:05:49I think there were probably just a lot of bidding wars between your majors, reservoir, a few other places,
00:05:56and that's about it. But it sounds like.
00:05:59No, I mean, the other investors were there. Some of them, you know, you can replace one pension fund with
00:06:05another.
00:06:07But I always point that out because.
00:06:11It wasn't this mad Russian of private equity and institutional investor.
00:06:15Sure. They were certainly hovering at that time.
00:06:21Yeah. So it sounds like what you're saying is as streaming started to mature a little bit,
00:06:25people started to get a little bit more comfortable with buying music catalogs and more people started to come in
00:06:30then.
00:06:31What about hypnosis? I feel like people always point to hypnosis's entrant into the market as a turning point where
00:06:38the prices started to raise really high. So can you tell me about when they entered the market and how
00:06:43that impacted things?
00:06:44The impact was something that we all reaped benefit from, which was a significant amount of education
00:06:54to a Main Street investor and to a retail investor.
00:06:58And we all benefited from that because, you know, 20 years ago, I would have been laughed out of the
00:07:03room
00:07:03if I was talking about music royalties. And today people know what you're talking about.
00:07:07You don't really need to explain it because there is so much coverage.
00:07:10And also because of what, you know, people like you have done and educated people about the industry.
00:07:16So we've we all benefited from that education. It became a whole lot easier to raise money.
00:07:21It became a whole lot easier to dispel the fear around investing in something that is driven by consumer taste.
00:07:31Because that's what people are scared of. Right.
00:07:35Or investors are scared of.
00:07:37And so I think that was pretty significant.
00:07:40And then the other significant impact is that they were paying more.
00:07:46So that drove the prices up and these assets became more and more and more in demand.
00:07:51Yeah. So hypnosis was, I mean, at least the story goes that hypnosis was always kind of coming in really
00:07:56hot on a lot of these deals.
00:07:58Yeah.
00:07:58I imagine that made it really hard to compete at a certain point.
00:08:02I imagine that you're right.
00:08:03It never really impacted us because we have historically done most of our significant deals on an off-market basis.
00:08:12What does that mean exactly?
00:08:13Meaning that we weren't really, we weren't really transacting through auction processes.
00:08:20Our business is based on relationships.
00:08:23Our business is one that has an active platform.
00:08:26So we're not just a financial investor collecting rent on music IP.
00:08:30And we have creative services and we have management services and we have other services that are unique and pertain
00:08:38to music industry clients.
00:08:40We do all of our own administration.
00:08:42You know, all of this goes into being a music company versus being an investor in music IP.
00:08:48That, along with some other dynamics, has created a moat around our business and has enabled us to execute on
00:08:55deals, off-market, build relationships, sometimes over years.
00:09:01And not really be in that hamster wheel of the bidding wars.
00:09:07Wait, so how did these deals come to you?
00:09:09You just hear it through the grapevine, like someone tells someone who tells you, like, hey, by the way, I'm
00:09:13about to go on the market with my catalog.
00:09:15I'm this big legacy act.
00:09:18Right.
00:09:18I'm ready to sell.
00:09:19So is that usually how that goes?
00:09:21I mean, listen, it is the most unregulated, disenfranchised deal flow structure of a business of this size or of
00:09:30an industry of this size.
00:09:31You're right.
00:09:32You're right.
00:09:32There's no portal.
00:09:34There's no standard mechanism through which these deals transact.
00:09:41The larger ones certainly go through representatives and agents.
00:09:45The lawyers do quite a bit of the facilitating of these transactions.
00:09:51Business managers are involved.
00:09:52Family members are involved.
00:09:54It really depends on who's running your business.
00:09:57Sometimes you're getting a call.
00:09:59Your team members are getting a call.
00:10:01You're getting contacted by lawyers, by managers.
00:10:03I mean, any of those representatives are the ones contacting.
00:10:08I think that these people are selective about who they want to involve in a process.
00:10:14I think that seller motivation and seller priority really plays into this.
00:10:22As you know, we're talking about somebody's creative body of work.
00:10:26And that is very, very personal.
00:10:28There are sellers that are looking for the biggest check.
00:10:31And that's completely fine.
00:10:32And they want an exit.
00:10:33And it's certainly a lot easier to divvy up a dollar than it is to divvy up a copyright.
00:10:37So that makes sense from an estate planning perspective.
00:10:41There are sellers who want to continue to retain a stake and be a partner with the company that is
00:10:51going to house their music and be the stewards of their legacy.
00:10:57And so they have different priorities.
00:10:59And that's definitely the seller to whom we appeal because we have creative services, because we do the administration, because
00:11:09we, even if we buy out a catalog, we consider that person to be an ongoing client of the company.
00:11:18Interesting. I imagine that when you're buying catalogs, you're often dealing with, like you were saying, like the estate, family
00:11:26members, stuff like that.
00:11:27A lot of the catalogs that get bought and sold are from older artists or deceased artists.
00:11:32I imagine that it's really challenging sometimes to work with these family members, especially when they don't have a lot
00:11:38of music business knowledge.
00:11:39Have you ever encountered difficulties in dealing with family members or estates?
00:11:45And how did you navigate a difficult moment?
00:11:48I mean, we really haven't.
00:11:50Really?
00:11:51I know. I'm trying to think.
00:11:52So our most recent estate deal is with the Miles Davis estate.
00:11:56OK.
00:11:57And I mean, I can't say enough good things insofar as how that relationship has evolved now.
00:12:06They run themselves very professionally and they have goals and they have objectives.
00:12:13And it is a very positive working relationship.
00:12:17We are in the centennial year.
00:12:19And so there's a lot of activations around that, which requires us to work very closely with the estate to
00:12:25execute on that and really take advantage of this moment that is his 100th birthday.
00:12:32The smaller ones that are estates, I'm just I'm trying to think we've really never had an issue, but we've
00:12:42just generally not had a lot of drama in our business.
00:12:45On that front, I know, I know.
00:12:49And I think we've been lucky.
00:12:51I really just think we've been lucky because it's the music business.
00:12:56There is a lot of drama.
00:12:57Drama is inherent to this business.
00:12:59But we really we we just haven't had that kind of drama.
00:13:03I can think of very few clients who are no longer with the company.
00:13:08Yeah.
00:13:08So, you know, most of our clients, when there is a moment to there where we have to establish a
00:13:15new relationship, you know, renew a contract, et cetera.
00:13:19We've always done that.
00:13:21So.
00:13:21Fair enough.
00:13:23Thankfully, people don't want to leave.
00:13:24I do think that also sometimes drama attracts drama.
00:13:27And maybe you guys are just straight.
00:13:30We're not very dramatic.
00:13:31I'll tell you that.
00:13:32Yeah.
00:13:32Well, OK, so I think, well, Miles Davis is obviously one of the all time greats.
00:13:37So that's an incredible legacy to uphold.
00:13:41And it's an incredible responsibility as well.
00:13:44And so how are you guys dealing with his centennial, his 100th birthday?
00:13:50And how are you finding new ways to bring life and to bring fans to his catalog?
00:13:56Um, so it's, as you can imagine, uh, all cylinders.
00:14:01Um, I think, you know, you put it perfectly.
00:14:05You have a responsibility to maintain the legacy.
00:14:10Um, and you have a responsibility to create a relevance for a younger audience.
00:14:16And you also have this huge opportunity.
00:14:18Uh, so the activations range from, uh, the Lexus, uh, commercial that I'm, I don't know if
00:14:29you watch TV, but it's been on all over the place.
00:14:31Um, there are product collaborations, uh, fashion collaborations and, and then specific
00:14:40performances, jazz festivals, et cetera.
00:14:43Those are all to be expected.
00:14:45Yeah.
00:14:45I think the challenge, and, you know, we'll know this in the next sort of nine to 12 months
00:14:51is what we do, which we're working on, uh, what we do to enhance the demographic of the
00:15:02Miles Davis listener.
00:15:04Yeah.
00:15:04And to reintroduce everything that is just so incredibly cool about him.
00:15:11Yeah.
00:15:12And that is going to be through fashion and all kinds of other partnerships, but it's
00:15:17also going to be, uh, through social media platforms and other kinds of, uh, initiatives.
00:15:24Yeah.
00:15:25I mean, I feel like I've recently seen, and I don't know if this is like a digital marketing
00:15:28campaign that's happening behind the scenes that I don't know about, but I feel like I've
00:15:31seen, uh, quite a few TikToks and posts on social media about Miles Davis's style, which
00:15:37I didn't realize how incredibly cool he was beyond just being a great musician.
00:15:43But his street style was insane.
00:15:45It was covered in the Wall Street Journal in, I believe it was in October.
00:15:50Okay.
00:15:51Maybe that's where it started.
00:15:52And so that sort of set off a, um, a little bit of a retrospective, uh, the rebirth of the
00:16:02cool.
00:16:02Yeah.
00:16:03Well, I love that.
00:16:05I love that because I didn't know anything about it and it's real, it's getting me more
00:16:10interested to listen to the music, even though it's not directly like pushing you into Miles
00:16:15Davis's music.
00:16:16It just gets you acquainted with him as a person.
00:16:18And thus you go back and listen to the catalog.
00:16:20Exactly.
00:16:21And, and all of these things is a path to grow the streaming numbers.
00:16:28Yeah.
00:16:28Right.
00:16:29Yeah.
00:16:29It might have some, some are immediate, some have immediate impact.
00:16:34Um, a fashion collaboration might be sort of three steps from actually connecting to that
00:16:42increase in the streaming numbers.
00:16:44But you have to take a perspective that this is a global, global, not geographically global
00:16:54across initiative, um, activation so that you're driving into new demographic and new
00:17:02market segments, new listeners.
00:17:04So obviously we're talking about Miles Davis, who is a great in the jazz world.
00:17:08I find the differences in how different genres are valued and treated in the catalog market
00:17:14to be really interesting.
00:17:15I feel like the, uh, what I've commonly seen at least, and correct me if I'm wrong, is that
00:17:20the most valuable type of asset is kind of like an older classic rock kind of thing.
00:17:26Um, and so you see those types of bands and acts fetching really, really high prices, like
00:17:31hundreds of millions sometimes.
00:17:34Um, but then on the other hand, I've also heard that it's more difficult, um, if you're
00:17:38a country artist, a dance artist, a hip hop artist to sell your catalog for those same
00:17:43like eye-watering numbers.
00:17:45Can you explain like why that is?
00:17:47Like, what are some of the difficulties with some of these genres like country, dance or hip
00:17:52hop, um, and why it might be a little less attractive to a catalog buyer?
00:17:55Yeah.
00:17:56I don't know if I would say it's difficulties.
00:17:58I think I would say if I were really to break it down, I would say how widespread is the
00:18:07listenership of the music and how long is that going to last?
00:18:12For how long is this music going to strike a chord with somebody?
00:18:17And really what that gets you to is at what rate is the revenue on this music going to
00:18:25decay?
00:18:26Yeah.
00:18:27Right.
00:18:28Is it here forever?
00:18:29Is it take me home country roads that you will keep listening to and you will be in a
00:18:39situation like we are today where there are hundreds of covers and user generated content?
00:18:45Or is it not going to stay with us forever?
00:18:49Yeah.
00:18:49Some hits don't really stick around.
00:18:52And some hits are great and they are hits in the moment and they are, and they could
00:18:57be a culturally defining moment, but that doesn't mean that they will sustain that cultural
00:19:06impact two decades from now.
00:19:08Got it.
00:19:09So if you're like a massive country artist, like a, I don't know, like a George Strait
00:19:12or something or a Willie Nelson that's been around and already stood the test of time,
00:19:16you can still fetch a really high price for something like that.
00:19:18Yes.
00:19:19And I, and I think there are, there is a finite group of artists and songwriters across genre
00:19:27who will command that premium.
00:19:29Yeah.
00:19:30Yeah.
00:19:31But really with all, with everything else, that's what you're asking yourself is, is
00:19:37this going to be worth, or what is this going to be worth in 10 years, in 15 years, in
00:19:4220
00:19:43years?
00:19:43Yeah.
00:19:44Are we still going to be able to license Take Me Home Country Road to Google?
00:19:49Yes.
00:19:50I think the answer is yes.
00:19:51You guys, you guys have that song, right?
00:19:52John Denver.
00:19:53We, yes, we do.
00:19:55And on the publishing side of the business, and Google launched the Google Home product
00:20:01a few years back during the Super Bowl with an instrumental version of that song.
00:20:07Wow.
00:20:07But what was the streaming uptick that you saw from that?
00:20:10Was there much of one?
00:20:12I mean, I'd have to, I don't know that number off the top of my head.
00:20:16That song is pretty stable in the sense that you don't see significant upticks because it's
00:20:23licensed all the time.
00:20:25That's true.
00:20:26I also feel like, isn't it like at the University of West Virginia, something they always sing?
00:20:31I don't know.
00:20:32The state of West Virginia licenses that music.
00:20:35Oh, really?
00:20:36Yes.
00:20:36Okay, wow.
00:20:36Okay.
00:20:37And I believe it's the state of West Virginia Tourism Board.
00:20:41And I'm sure they sing it at the university.
00:20:43I don't know.
00:20:44I just feel like it's so deeply-
00:20:45That's not the lion's share of our income from Take Me Home Country Roads.
00:20:48It's definitely not from the-
00:20:49The state of West Virginia?
00:20:50Singing at the university.
00:20:52Yeah.
00:20:52No, but it just, it embeds itself into American culture.
00:20:56And, but I also wonder with a song like that, it's so American.
00:21:00Does it translate internationally as well?
00:21:03It does translate internationally.
00:21:06Yeah.
00:21:07And there is a whole class of music that for some reason is really popular in different
00:21:12territories that is completely, it just stumps you.
00:21:17Yeah.
00:21:18You know, Miles's popularity in Japan and France.
00:21:21Huh.
00:21:22Japan kind of makes sense to me.
00:21:24Yes.
00:21:25Because like-
00:21:25Because like-
00:21:25There are these pockets, you know, country music is very popular in France.
00:21:30There are these, there's pockets of genre, geography marriages that are very, very surprising.
00:21:37I kind of love that.
00:21:38That's great.
00:21:39I can't imagine someone in France, like putting on a cowboy hat and listening to country music,
00:21:43but hey, if they're doing it.
00:21:44It's popular.
00:21:45Well, I've also heard that like sometimes with genres, like, I mean, I keep using the country
00:21:52dance, hip hop examples, but like it's, there are less opportunities for film TV licensing
00:21:57as well and that might impact things.
00:22:00I think so.
00:22:01I think lyrics has a lot to do with it.
00:22:02Yeah.
00:22:03It's got to be conducive to film and TV.
00:22:05Yeah.
00:22:06I mean, we see quite a bit of licensing, not for advertising, across the genres.
00:22:14I think that if the music is in a certain caliber.
00:22:19Yeah.
00:22:19That you are going to get all the licensing opportunities.
00:22:24But I would agree with you that in looking at how we value something, we are going to
00:22:32be more or less optimistic on film and TV sync if we're, you know, looking at music that
00:22:42is filled with expletives.
00:22:45Like that's, that's not going to be easy.
00:22:47Yeah.
00:22:47Same with like, I imagine samples too.
00:22:50Like if you have a hit song, but it has a bunch of samples in it and there's like 32
00:22:53writers on the credits, it's probably not going to be the thing that like every, everyone
00:22:58in the film and TV business is trying to license because it's just too difficult.
00:23:01Maybe.
00:23:01I mean, you want, you want the, the clearest, straightest path to do your job.
00:23:07I mean, we all do.
00:23:09So yes, that, that can also be a little bit disruptive.
00:23:12I wanted to touch on film TV licensing a little bit more.
00:23:17When I think of country and having great sync opportunities there, I think of Yellowstone.
00:23:22That was one where we saw really, really big streaming upticks after any country song was
00:23:26synced on that show.
00:23:28But another one kind of, well, I mean, they really license everything.
00:23:32One of the big TV shows for streaming uplifts for music was Euphoria.
00:23:37It's coming back for season three this spring, but you guys actually have a song from your
00:23:42catalog that was synced in a really important part of season two, Sinead O'Connor's Drink
00:23:46Before the War.
00:23:47I'm just wondering how that came together and what kind of an uplift you see from a show
00:23:54as big as Euphoria.
00:23:55Can that really bring a song to a new generation and instance?
00:23:58Absolutely.
00:23:59Especially with an artist like Sinead.
00:24:01You know, that example particularly has had a few of these unsteady moments or moments
00:24:09where it just hasn't been steady performance because sadly she passed away, as you know.
00:24:15And so there have been these moments with her music.
00:24:20There are so many examples of reintroducing music.
00:24:26I mean, you can look at Fast Car.
00:24:28You can look at the Johnny Cash movie.
00:24:29That was a huge moment in reintroducing music as well as just having a spike for these events.
00:24:37I think Grey's Anatomy really started this trend of not only being this show that everybody
00:24:46was, you know, glued to, but also being a place where people were discovering music.
00:24:53Yeah.
00:24:54So they almost had to meet themselves every time.
00:24:57We certainly see that and we see those spikes.
00:25:01And I think there are certain TV shows that have become or have captured this persona of
00:25:09having, you know, some sophisticated musical taste.
00:25:14Yeah.
00:25:15And being very, very deliberate about the music.
00:25:19Yeah.
00:25:20I mean...
00:25:20And Euphoria is one of them.
00:25:21Euphoria is definitely one of them.
00:25:22I really feel like, honestly, people are still seeking gatekeepers.
00:25:27People are still seeking, like, kind of that tastemaker, whether it's a TV show with a great
00:25:32soundtrack or an influencer online.
00:25:35Even though, like, a lot of our kind of typical gatekeeper-like institutions have fallen by the
00:25:40wayside.
00:25:40I do think that people are always looking for someone that they can trust that's always going
00:25:45to feed them something that they want.
00:25:46It's interesting that you said Grey's Anatomy, though, because I didn't realize that that
00:25:51could be seen as a touchpoint, but I really feel like it could be.
00:25:54It was.
00:25:55I think at the beginning...
00:25:56I don't know if it is still now.
00:25:58I think it is a little bit.
00:25:59People still rewatch that show like crazy.
00:26:00But from a musical perspective, I think, you know, licensing to Grey's and being on Grey's
00:26:06was...
00:26:07I even remember it was a goal for songwriters.
00:26:12Yeah.
00:26:12Oh, that's so crazy.
00:26:13And you mentioned the Johnny Cash biopic and how that led to a big uptick in his catalog
00:26:19and renewed interest in Johnny Cash's person.
00:26:22We've seen a ton of musical biopics in the last decade or so.
00:26:26Is that correlated to the fact that the catalog market has gotten hotter and catalogs are changing
00:26:31hands and new catalog owners are trying to increase the value and a legacy of the people
00:26:37that they've purchased music from?
00:26:39I think it's partly that.
00:26:40I think it's partly that these stories are interesting and people like to see interesting
00:26:47stories.
00:26:48I mean, right now, I don't know about you, but you can't look anywhere without seeing something
00:26:55about love story.
00:26:56Yeah.
00:26:56Right.
00:26:57So that is of the moment.
00:26:58And that's, again, a real story.
00:27:00So it's interesting and it captivates an audience.
00:27:03So generally, all of these biopics are rooted in stories that are just attractive to tell.
00:27:12These are not inexpensive projects and somebody has to finance them.
00:27:18You mean getting Timothee Chalamet to play Bob Dylan is not a cheap thing?
00:27:22And so I think just more liquidity and budgets, because the business has grown, enables either
00:27:33rights holders or filmmakers adjacent to these music companies to underwrite these projects.
00:27:41And so I think that's why you're seeing more of these projects come to life.
00:27:45I guess in general, you're probably just seeing across the board in film and TV, just reviving
00:27:49old IP, whether it's musical IP.
00:27:52It's safer.
00:27:52Oh, yeah.
00:27:53It's so much safer.
00:27:53Will you not say it's a form of sampling?
00:27:58Ooh, I like that.
00:28:00I think that's true.
00:28:01Because you sample for artistic reasons.
00:28:06But you also sample because you've got something that's tried and true.
00:28:10Yeah.
00:28:11In my mind, I equate the things a little bit because you know there's some equity in that
00:28:15story of that artist or that music that you're telling.
00:28:18Totally.
00:28:19Totally.
00:28:19And I'm glad you brought that up because I think one of the most interesting things I've
00:28:23seen in the last five, seven years is this rise of flipping songs.
00:28:29Um, so to describe this for people who are not familiar with what this is, um, I think
00:28:34you started seeing around 2021, 2022, a lot of artists were hitting the top of the charts
00:28:39with songs that had really heavy interpolations or samples of past songs.
00:28:43So Kiss Me More by Doja Cat has the exact same melody as Fiscal by Olivia Newton-John.
00:28:49Um, First Class by Jack Harlow.
00:28:51The whole chorus was basically Glamorous by Fergie.
00:28:54There are tons more examples of this.
00:28:56And it turns out, like I did some stories on this back when it got popular, but the
00:29:01reason why some, some of those happened is because people who owned the catalogs of these
00:29:06older songs were trying to revive them.
00:29:09And so they were like, Hey, we'll easily clear Fiscal by Olivia Newton-John for you.
00:29:13If you want to make it into something new, it would be a win-win.
00:29:16Right.
00:29:17And I just found that to be so fascinating, but it's also a very labor intensive way to market
00:29:22a catalog.
00:29:22So have you guys tried flipping like flip camps or offering songs to songwriters and producers
00:29:29to try to get new songs made?
00:29:31And is it worth it?
00:29:33All of the effort that goes in.
00:29:34Um, we don't have an active flipping department.
00:29:40Thankfully.
00:29:41Yeah.
00:29:41Um, we certainly have benefited from this.
00:29:46Okay.
00:29:46Um, so we, we own the Delphonics catalog, um, in that catalog is Ready or Not.
00:29:54Uh, and I think the most relevant example in recent history is Bridget Mendler.
00:30:03And, you know, yeah, but that song has been interpreted many times and the Fuji's rendition
00:30:13of that is certainly more popular than the original Delphonics version of that song.
00:30:18Yeah.
00:30:18There is a group of Cornerstone songs that are suitable for this and will continue to have
00:30:29this revival and this new life when you have that caliber of artists coming to, you know,
00:30:36to, to do, to do a new version.
00:30:39Beyond that, it's not something that, you know, we sort of have teams of people dedicated
00:30:45to creating.
00:30:47I think if you bring it back to the basics, you need to invest and create a catalog of really,
00:30:54really high quality music, the high quality music is determined by the number of people
00:31:01and the frequency with which they're listening to it.
00:31:03And so if you do that, those opportunities are going to come about.
00:31:09Yeah.
00:31:10Yeah.
00:31:11Those opportunities are going to come about for artistic reasons, for creative reasons.
00:31:15And those are to me, the right reasons, because then it's about the music.
00:31:19Yeah.
00:31:20Yeah.
00:31:21That makes sense.
00:31:22And I think that all the stuff that we have just talked about, the biopics, the flipping,
00:31:27all of these kind of creative things that provide a huge uplift often for an older song.
00:31:32Those are all great, but I don't really know how you can, like when you're in the buying
00:31:36process of buying a catalog, how you can really account for that.
00:31:40Because those are all things that it'd be great if they happened, but it's not like you
00:31:44can have like the euphoria music supervisor on speed dial and be like, hey, can you do this
00:31:47for the next episode?
00:31:48It's not how it works.
00:31:49So how do you, I just like, I don't even really understand how valuations come about,
00:31:56how you reach that final number of, this feels like an appropriate number for this
00:31:59catalog.
00:31:59And also, how do you account for those random blips on the radar that are really positive
00:32:04for a catalog?
00:32:05You just wing it.
00:32:06You guessed.
00:32:08I know there's so much that goes into valuing a catalog.
00:32:11There is.
00:32:11I mean, you have to look at what has been done historically.
00:32:14Right.
00:32:15So you have to look at the percentage that of the revenue that is coming from actual
00:32:20licensing.
00:32:21You have to look at that it's coming from licensing to advertisers or film and TV, et cetera.
00:32:27Has the catalog been neglected?
00:32:29Has the music been neglected?
00:32:32Not out of any ill intent.
00:32:33Maybe it was just, you know, sort of collecting dust.
00:32:36Who knows?
00:32:36Um, or maybe you're inheriting or buying a catalog that has been maximized from that
00:32:45standpoint.
00:32:46So we are certainly not going to look at a catalog and say, oh, as soon as we take over,
00:32:53we're going to do 20% better because that's just not always going to be true.
00:32:58You pointed out earlier, certain genres are conducive to certain licensing.
00:33:03Some aren't.
00:33:05So that's not a, you can't just do that across the board.
00:33:10We actually do a lot of due diligence internally and sometimes externally to think about what
00:33:17the sync opportunities are.
00:33:19And our sync team is obviously very aware of what the trends are in that moment and what
00:33:23the licensing future is.
00:33:25And, you know, is this something that you want in the catalog?
00:33:28And do you think that you're going to be able to do better, um, marketing this music to
00:33:33all the music supervisors in your database?
00:33:36Uh, so we do factor that in.
00:33:38You could have music that has historically just said no to licensing.
00:33:45So that creates a whole bunch of opportunities.
00:33:48So why do people say no?
00:33:49Is it just like they,
00:33:51they don't want to license it.
00:33:53They don't,
00:33:55they might have an issue with what the purpose of the license is.
00:34:01Again, it might just be neglected.
00:34:04Um, you know, people have different reasons for that.
00:34:08You could have music that was heavily sampled without cleared samples.
00:34:13Interesting.
00:34:14So can you go back in time and be like,
00:34:16Hey, I'm the catalog owner now.
00:34:17Pay up.
00:34:18Well, we did.
00:34:19So we did that with De La Soul.
00:34:21Okay.
00:34:22Uh, we purchased the catalog in, in, we purchased Tommy Boy in June of 2021.
00:34:29The first call was to them.
00:34:32And then we spent 18 months clearing the samples.
00:34:36I wonder how that exercise would look different today.
00:34:40Okay.
00:34:41Because I wonder if 18 months would be one month because we would be able to use AI
00:34:48tools to help us clear the samples.
00:34:50Wow.
00:34:50Wait, so is AI use used in sample clearance a lot now?
00:34:54I don't know.
00:34:54Okay.
00:34:55But I'm sure it can be.
00:34:57Yeah.
00:34:57Um,
00:34:58I mean,
00:34:58that's like one of the most tedious processes that no one wants to go through.
00:35:02And it was run on an Excel spreadsheet with weekly phone calls and,
00:35:06you know,
00:35:06a lot of human interaction and,
00:35:10uh,
00:35:13recall.
00:35:14Yeah.
00:35:15You know,
00:35:16man,
00:35:16like,
00:35:16Hey,
00:35:16do you remember what this was?
00:35:17Go find it,
00:35:18clear it,
00:35:19et cetera.
00:35:20That was an 18 month exercise to get the music ready for the first time that it was going
00:35:29to be distributed,
00:35:31uh,
00:35:31on digital platforms.
00:35:33Um,
00:35:34that also opened up licensing for three is the magic number in the credits of Spider-Man,
00:35:41which happened the November before I believe we released the first single,
00:35:46uh,
00:35:46in January.
00:35:47And then we released the rest of the music on March 3rd.
00:35:53Wow.
00:35:53Because three and three,
00:35:55um,
00:35:56in 2023,
00:35:58man.
00:35:59I mean,
00:35:59that must've been such an undertaking not only to clear the samples,
00:36:02but also since they haven't been on digital platforms or streaming services,
00:36:06De La Soul kind of fell out of the public consciousness a little bit.
00:36:09They're one of the most pioneering groups in all of early hip hop,
00:36:13but yet because it wasn't there on digital platforms,
00:36:17easily accessible to people today.
00:36:18I imagine there was a lot of marketing that also had to go into just reminding people,
00:36:23Hey,
00:36:23De La Soul is here and he's your favorite artist,
00:36:25favorite artists,
00:36:26favorite artists.
00:36:27Um,
00:36:28so,
00:36:29but another thing with the De La Soul catalog is you guys announced that you had acquired
00:36:34the catalog and then the next month,
00:36:35David from De La Soul passed away.
00:36:37Yes.
00:36:38And so I'm wondering how you handle sensitive times like that as someone who's just spent
00:36:44all of this money to acquire this catalog.
00:36:46You're so excited about it,
00:36:47but you also don't want to be disrespectful or push too hard during a time of mourning.
00:36:53So how did you guys handle that?
00:36:54It was a very,
00:36:56very difficult time.
00:36:57And,
00:36:58you know,
00:36:59outside of just,
00:37:02somebody has passed away far too soon.
00:37:05So outside of just the human emotional aspect of it,
00:37:12we were three weeks shy or two weeks shy of releasing the music on the digital platforms.
00:37:22Okay.
00:37:22And personally,
00:37:24what makes me or,
00:37:26and what made me the most sad at the time was that they wouldn't enjoy this moment together,
00:37:34the three of them and with their families.
00:37:38Yeah.
00:37:38Forget about,
00:37:40you know,
00:37:40buying the catalog or paying them like that.
00:37:43That was,
00:37:43that's,
00:37:44that was just not a part of.
00:37:46Yeah.
00:37:47What we were thinking.
00:37:48It was,
00:37:50this was going to be such an important moment for them to enjoy the three of them together.
00:37:55And we went with Mason pause.
00:37:59We went to time square where over the course of that day,
00:38:05I believe we had six or seven billboards and just to be with them and,
00:38:10you know,
00:38:10with family and enjoy that moment.
00:38:13You really felt,
00:38:14you know,
00:38:14it would have been great if,
00:38:15if Dave had been there.
00:38:16Yeah.
00:38:16To,
00:38:17to enjoy that,
00:38:18to see that,
00:38:18to see the legacy,
00:38:20how the legacy,
00:38:21what he meant to people where,
00:38:24you know,
00:38:25so,
00:38:25um,
00:38:27that it was devastating.
00:38:29Yeah.
00:38:29Yeah.
00:38:30And so we've touched on like a lot of ways where a catalog can increase in value,
00:38:36whether it's a biopic flipping,
00:38:37a cover that becomes really popular,
00:38:40but also as we know,
00:38:42artists can be unpredictable and sometimes artists damage their own legacy.
00:38:47So when you're dealing with artists that are still alive,
00:38:49where there's a scandal that takes place,
00:38:51I think of like someone like a Kanye West or David,
00:38:55or,
00:38:55um,
00:38:56like even something as small as like a,
00:38:58a relationship gone sour that makes them look bad in the press for a
00:39:02while.
00:39:02Um,
00:39:03how can that impact the value of the catalog and how do you manage the
00:39:06uncertainty of a living artist?
00:39:10I told you before,
00:39:11we haven't had a lot of drama and I mean,
00:39:14we haven't had a lot of drama now.
00:39:16That's not to say people go through life.
00:39:19We're in business with people and people get divorced and people have
00:39:23breakups and,
00:39:24and we're in the music business.
00:39:25So maybe certain things are exacerbated and heightened and that's fine.
00:39:30We're using artists and songwriter interchangeably.
00:39:33Yeah.
00:39:33Right.
00:39:34So songwriters,
00:39:35a lot of them you wouldn't even know by name,
00:39:38not you,
00:39:38but most people.
00:39:40Yeah.
00:39:41Any,
00:39:42uh,
00:39:43changes that happen,
00:39:45that's not really a public event.
00:39:48Uh,
00:39:49and,
00:39:49and for a songwriter,
00:39:50for a songwriter and for the company and for the business.
00:39:53Yeah.
00:39:54for the most part,
00:39:55I would say that life happens to people and we're sort of in business with these
00:40:00songwriters and things ebb and flow and that's all fine.
00:40:05Um,
00:40:06on the artist side,
00:40:07we've been kept safe from notoriety in that we don't really have that notoriety on the artist roster.
00:40:17Um,
00:40:18and I'll go back to what I said before.
00:40:20I think we've just been really lucky.
00:40:22Yeah.
00:40:23We're not only dealing in classical music,
00:40:25for instance,
00:40:27where we're shielded from perhaps some of the things that you're thinking about.
00:40:31Yeah.
00:40:32So it just hasn't come up yet.
00:40:33It just really,
00:40:34we've,
00:40:34we've,
00:40:35we've been pretty protected on that front.
00:40:40I just think it must be so devastating when,
00:40:44you know,
00:40:45you decide to acquire something and then all of a sudden the value that you thought you were getting has
00:40:50completely changed or the artist's reputation has completely taken a downturn.
00:40:55Um,
00:40:56but it sounds like you haven't had to deal with it yet.
00:40:58And I'm fingers crossed that you don't in the future.
00:41:00And this may not,
00:41:01I don't know,
00:41:02maybe,
00:41:03maybe I'm not supposed to say this,
00:41:04but we do look at deals and we do say,
00:41:07okay,
00:41:07are these people we want to be in business with?
00:41:10I mean,
00:41:11the scenario that you are painting is,
00:41:15we think about that.
00:41:18And there are deals that have transacted that we don't want to be a part of.
00:41:24Because that's not necessarily a client that we see would have,
00:41:32um,
00:41:34that,
00:41:34that we would be the right partner for.
00:41:36I imagine that there's a lot of people who also go in with that exact same mentality.
00:41:40It's like,
00:41:41I mean,
00:41:41it's like how,
00:41:42how,
00:41:43uh,
00:41:43risk averse are you going to be when you're entering into a partnership with someone?
00:41:47Um,
00:41:48but I imagine that does affect the value of a catalog.
00:41:50If there's a bunch of people who's not willing,
00:41:52who are not willing to bid on your catalog because they're worried about you,
00:41:57then I imagine that it probably has some adverse effects.
00:41:59It does.
00:42:00But I mean,
00:42:00you're,
00:42:00you're going to find a class of financial investor that who wouldn't have any impact.
00:42:04Yeah.
00:42:05And that's something.
00:42:06So would they care?
00:42:07Yeah.
00:42:07I,
00:42:08we would care.
00:42:09We have an active platform.
00:42:11We are in the music business.
00:42:13We represent writers.
00:42:14We are looking at future relationship and collaboration.
00:42:20I do want to touch on that.
00:42:21I mean,
00:42:22you have your kind of financial investor types,
00:42:24your shamrocks or KKRs,
00:42:25stuff like that.
00:42:26You also have your institutional music investors,
00:42:29your major labels,
00:42:30your,
00:42:31um,
00:42:32you know,
00:42:32reservoirs of the world.
00:42:34How do you,
00:42:35how do those two sides see catalog investing differently?
00:42:39Um,
00:42:40what attracts the shamrocks of the world?
00:42:43What are those types of companies looking for versus what your music companies are looking for?
00:42:48I think we value assets differently in so far as how we view the exit.
00:42:54So if I'm a financial investor or I'm private equity or I'm a pension fund,
00:43:00I'm an institutional investor.
00:43:01I am solving for a three to five year exit.
00:43:05However,
00:43:05that exit materializes.
00:43:07Um,
00:43:08and so I am looking at an investment and a return on that investment in that five year window.
00:43:14Uh,
00:43:15that's where there's a little bit of disconnect with these assets,
00:43:20particularly in that exit assumption.
00:43:23And I would say that financial investors have maybe shifted a little bit on that five year
00:43:28in that these assets have a much better return in a 10 year window or a 15 year window than
00:43:36they do in a five year window.
00:43:38These are long hold assets.
00:43:40That's how they behave.
00:43:42But how you think about the exit and what return you're going to realize at that exit is the difference
00:43:49between the various platforms.
00:43:52Um,
00:43:52as a music company,
00:43:53we are in it for the long term.
00:43:55So we're not running forecasts for 30 years because who knows what's going to happen in 30 years.
00:44:00But we're certainly looking at a 10 year window or a 15 year window versus if I'm private equity,
00:44:06I want to realize a meet mid teens unlevered return by year five.
00:44:10I just,
00:44:11I imagine there's a lot of artists who don't want to go for that.
00:44:14The idea of,
00:44:14okay,
00:44:14I'm going to sell my catalog.
00:44:15I'm going to pick who I want to sell it to,
00:44:18but then they might flip it around three to five years.
00:44:21Like,
00:44:21yeah.
00:44:22I mean,
00:44:22so are we seeing a lot of second sales now or third sales of catalogs from financial investors?
00:44:27Uh,
00:44:28yes,
00:44:28we are.
00:44:29I mean,
00:44:29we're reading about it every day,
00:44:31but I mean,
00:44:33I understand what you're saying that if I'm an artist,
00:44:36do I want that?
00:44:37There's also some very large transactions and that makes sense.
00:44:42Right.
00:44:42So some artists,
00:44:43I think it,
00:44:45I guess basically what you're saying is like,
00:44:46it kind of depends on what the artist is looking for.
00:44:48If they just want the money,
00:44:49then yeah,
00:44:50great.
00:44:50And then that's great.
00:44:51You're maximizing value for a body of work that you poured your heart and soul
00:44:58into for decades.
00:44:59Yeah.
00:45:00And I don't think there's anything wrong with that.
00:45:02Yeah.
00:45:03And then I imagine there's some artists who want to be like kind of partners in it.
00:45:06Sure.
00:45:07And they would probably go more for like a reservoir.
00:45:09Maybe.
00:45:09Yeah.
00:45:10I mean,
00:45:10that's,
00:45:10you have different priorities and different,
00:45:12every seller in,
00:45:13in every asset class has a different priority.
00:45:15Mm-hmm.
00:45:16Well,
00:45:17one of the most famous catalog sales of all time,
00:45:20or I guess you could probably call it the most famous catalog sale of all time is Taylor Swift's Masters
00:45:24being sold from Big Machine,
00:45:26the label that she originally signed to in the 2000s,
00:45:29selling those Masters to Shamrock.
00:45:32This was very upsetting for her.
00:45:34And I feel like it brought so much attention to the catalog market,
00:45:39which was already starting to rise a lot by that point anyway.
00:45:43Right.
00:45:43But did the notoriety from that experience have any impact on the overall catalog market?
00:45:49Or was that really more about public perception opening up to the catalog market?
00:45:55We didn't feel any impact.
00:45:57I think that it was a perfect storm of who was involved, first of all, and the numbers that were
00:46:07being thrown around,
00:46:11and the impact on the person, or at least the way that it was written about,
00:46:17the impact on this person who has such a huge fan base and who is so loved.
00:46:25Outside of that, I think that for at least those who are more engaged in the business,
00:46:35it started to shed light on this bifurcation between the two different kinds of companies that have interest in music.
00:46:45And there are those with the platforms, and there are the majors, and they have platforms,
00:46:50and there are those companies with ongoing financial interest in music that doesn't yet exist.
00:46:59And then there are financial investors.
00:47:02And it sort of shed a little bit of light on that, on, you know, who the players are,
00:47:09and what are the various businesses that these players are in.
00:47:14Some are in a business of cash flow acquisition, again, nothing wrong with that.
00:47:22And some are in the business of preserving legacies and nurturing artists and developing new music.
00:47:29That situation also really put a spotlight on the fact that Taylor Swift did not own her own masters.
00:47:38This was very common at the time in the 2000s when she signed her deal.
00:47:41She was, I believe, a teenager.
00:47:43So not much leverage, brand new on the scene, signs a deal with Big Machine.
00:47:48And that was kind of how record label contracts looked at that time.
00:47:51And so it was within Big Machine's right to do with the catalog what they wanted to.
00:47:56Nowadays, we're seeing much more artist-friendly deals at these record labels.
00:48:00We're seeing a lot more artists, even really small, young artists, getting record deals where they will either have the
00:48:08ownership revert to them at a certain period of time,
00:48:10or they get to own 50% of it, or something like that.
00:48:14I imagine that as time goes on, 5, 10 years, 20 years down the line, when these artists are current
00:48:21today, looking to sell their catalogs in the future,
00:48:24you're going to be dealing with more artists who are selling their masters rather than the labels that they were
00:48:29with.
00:48:30How do you see that impacting the future catalog market?
00:48:33I agree with you in that you have a more sophisticated seller.
00:48:37You have better representation.
00:48:38You have an industry that has been essentially democratized because people have access to so many different things
00:48:48and people can do so much more on their own than they used to be able to.
00:48:50All of that being said, you're still going to see the same cycle of very high-quality music that has
00:49:04a long life ahead of it.
00:49:06I don't think all of a sudden we're going to see a deluge of opportunities like that.
00:49:12I think that's going to be a finite group, and there's a scarcity around that group.
00:49:19But you're just going to see a lot more catalogs, sure.
00:49:23Yeah, yeah.
00:49:24Do you want to buy them? I don't know.
00:49:25Yeah.
00:49:26I think one of the most interesting things about the Taylor Swift catalog situation is that she decided to re
00:49:32-record her Masters in Retaliation,
00:49:33which I think when she announced that, most people were probably scratching their heads wondering how this could possibly work.
00:49:39But it worked.
00:49:40It worked.
00:49:41Somehow, the Taylor's version stuff, like everyone switched over to Taylor's version and were loyal to her in that.
00:49:48And then we started to hear at Billboard that there were major labels who were starting to add clauses into
00:49:54contracts against re-recording
00:49:57to try to prevent what Taylor Swift had just done in the future.
00:49:59I thought that was super fascinating.
00:50:02But I also just kind of think, like, could anyone else ever actually do that?
00:50:06Well, that's the thing.
00:50:07I mean, it's a unique situation because of who she is.
00:50:11Yeah.
00:50:11I just don't think that most people have the fan bases that would switch just when you say, hey, this
00:50:16is wrong.
00:50:17I want you to listen to my new version.
00:50:18Yes.
00:50:19But, yeah, I mean, but I guess it does pose a risk to a catalog.
00:50:24If you say that you're investing in these certain Masters and then they go ahead and do another version, that
00:50:30could be risk.
00:50:30But I don't know.
00:50:33But that artist has completely changed the structure of how you connect with your fan base.
00:50:43And so and she completely changed how you establish a fan base and then connect with your fan base.
00:50:53So when she then follows that up years later with, OK, now I'm going to do Taylor's version, she's already
00:51:01talking to an existing group of people who are just out there supporting her.
00:51:05Yeah.
00:51:06You know, so.
00:51:08So there's a lot of legwork that went into being able to have a message like that that would stick.
00:51:13Yeah.
00:51:13Have you ever heard of any other like re-recording projects working?
00:51:18And not like that.
00:51:19Yeah.
00:51:19I feel like the only thing I can think of is Def Leppard re-recorded some stuff.
00:51:23And I think it was for the purposes of film TV licensing or something like that.
00:51:27Well, I mean, that that happens all the time.
00:51:29There'll be trailerization of music.
00:51:31There are companies out there that trailerize music.
00:51:33Yeah.
00:51:33For use in trailers.
00:51:35Sure.
00:51:35Yeah.
00:51:36Those revisions are not meant to replace the existing tracks on a DSP that you would listen to.
00:51:46So one of the things about the catalog market that always kind of irritates me, I guess, as someone who
00:51:52reports on this area, is that I'll see people online.
00:51:55They'll see the headline and they'll say it'll say, I guess one of them was like, Justin Bieber sells this
00:52:01catalog for 200 million or something like that.
00:52:03They don't read past the headline to see exactly what was bought and sold.
00:52:07Right.
00:52:07And so you'll look at one catalog deal and compare it to another one and be like, well, why did
00:52:11Justin Bieber get this price?
00:52:12And this other artist got a totally different price.
00:52:15Isn't this person more popular?
00:52:17And I'm like, OK, we got to think about what they actually were selling.
00:52:21Because when you see a catalog deal, that doesn't mean it's always 100 percent of the exact same rights.
00:52:29And I mean, we're talking about Taylor Swift.
00:52:31Her deal was about big machines selling her masters.
00:52:35But you can also sell your publishing, which is the songwriting rights.
00:52:38Those are two different things.
00:52:41So masters versus publishing, a lot of people want one or the other or both.
00:52:46Tell me about what the difference is in buying masters versus buying publishing.
00:52:51How do you treat that differently once you own that catalog?
00:52:53We're looking at different teams on those two different businesses.
00:52:59So the recorded team is different than the publishing team.
00:53:02There's a recorded marketing team.
00:53:04There's overlap on the digital side, but it's not the same people doing the same work.
00:53:11As far as our desire for either or, I would say in the early days, the masters were, I mean,
00:53:22in the early days, because there was so much risk, the publishing was far less risky.
00:53:27Today, I would tell you that these assets are trading at parity.
00:53:32But if you're going to take on publishing rights or master rights in an active way, not in a passive
00:53:48way, you're going to need to release vinyl.
00:53:52You're going to need to have promotion and marketing on the record side, which is an entirely different business than
00:53:59what you would do on the publishing side.
00:54:00You don't, you're not releasing physical product on the publishing side.
00:54:04Yeah.
00:54:04So publishing is more like a, I want checks to come in the mail.
00:54:07Yes.
00:54:08And versus masters are like, I'm out there.
00:54:10I want to market.
00:54:11I want to make it more valuable.
00:54:13Yeah.
00:54:13I guess you also have to consider if you're the one who's looking to buy publishing, for example, who owns
00:54:18the masters and are they doing a good job?
00:54:20Do I trust that they're going to keep marketing it?
00:54:22Is that something that interests consideration?
00:54:23We definitely look at who, you know, who, who does own the masters.
00:54:30I'm not sure if it's, are they going to keep doing a good job versus are they going to keep
00:54:36doing any job?
00:54:38And, you know, because that's what you really want to know.
00:54:44And are you looking at a major or are you looking at, you know, a record label that might not
00:54:49be here?
00:54:50And it also depends on the age of the music, right?
00:54:53So if it's a complete unknown, you're, you're going to think twice about it.
00:54:59We look into it to gather the knowledge.
00:55:01We don't necessarily, it's not really a major factor in how we value an asset.
00:55:06Yeah.
00:55:07And one of the biggest deals of the last few years was Queen, Queen sold to Sony Music Publishing.
00:55:12It was over a billion dollars, or at least that's what was reported.
00:55:16I imagine there's a finite number of artists who can really get over a billion dollars.
00:55:21I think that's the biggest one I've ever heard of.
00:55:23Um, I'm wondering, like, is there a time when we kind of run out of the very, very top, top
00:55:30tier catalogs that are on the market?
00:55:33I worry about that all the time.
00:55:35Really?
00:55:35I worry about that all the time.
00:55:37And I worry about, at what point is a song, a catalog that is 30, 40, 50 years old, at
00:55:50what point does it just transition out of cultural mainstream?
00:55:57Yeah.
00:55:57At what point is it just no longer relevant?
00:56:00Yeah.
00:56:01Are we listening to the music from the 20s or 30s?
00:56:05No.
00:56:05No.
00:56:05Would you name an artist from the 20s?
00:56:09I, well, maybe, if you give me enough time.
00:56:12I know.
00:56:12But, like, yeah, I think that's really fair.
00:56:15I think also, like, recording technology was not very good until probably about the 40s, 50s.
00:56:20Yes.
00:56:20But I feel like the 60s onward.
00:56:24Maybe even, like, you could lump in late 50s because you have, like, Elvis then and Dion is someone that
00:56:29you guys work with.
00:56:30I feel like the popular music canon kind of starts there.
00:56:33Right.
00:56:34But it's like, yeah, does it ever become just old people music?
00:56:38Well, that's what I'm saying.
00:56:39So I do think about what you're saying a lot because we also have shorter attention spans.
00:56:47We also have much more music that we are exposed to.
00:56:52We have much more choice.
00:56:53We have much more ease with which we can listen to music and find music.
00:57:01So are we listening to our tried and true artists on repeat the way we used to?
00:57:10Even though we're listening to more musical hours per week, I don't think that—I would be surprised if you told
00:57:18me that we were listening to the same concentration and not to a more diverse concentration.
00:57:24Yeah.
00:57:25I don't know what the data is.
00:57:26When people are valuing catalogs and trying to come to that number where it feels like an accurate representation of
00:57:32how much the music will be worth and how much it's worth at that moment, people rely on streaming data
00:57:36a lot for that.
00:57:37But what happens if five, ten years down the line, there's something past streaming that we're not really aware of
00:57:43yet?
00:57:44Is that scary?
00:57:46Is that risky?
00:57:47That is.
00:57:50It's—yes.
00:57:51But that's exactly where we were 20 years ago in that something came along that, you know, people didn't realize
00:57:58was going to come along.
00:57:59I don't think the conduit matters as much as the rights protection and the—and just the importance of copyright and
00:58:12maintaining copyright.
00:58:14Whether it was ringtones or CD's or streaming or Roblox or Peloton, fundamentally, the business is one where IP is
00:58:27licensed and revenue is derived from that license.
00:58:30So that unknown distribution vehicle that could come about in the next 10 years, we need to make sure and
00:58:43focus on the IP being licensed.
00:58:47AI-generated music, that's today's version of what that unknown is.
00:58:52We need to make sure that that music is compensating the IP on which it is trained.
00:58:59So the principle remains the same, and the precedent that we set on IP licensing will determine how well or
00:59:10poorly we do in the future.
00:59:11Yeah. I remember a couple years ago, I started asking around because I cover both publishing and AI, and so
00:59:18I started asking around with various catalog buyers, lawyers, et cetera, asking, are you valuing or factoring in the rise
00:59:28of generative AI into your catalog valuations?
00:59:30At that time, people were saying no. Is that still the answer? Are people still—
00:59:35Meaning an upward tick or a threat?
00:59:37I mean, they're just like, I'm not super concerned about it.
00:59:41Okay, we're not—I mean, we are not projecting—because we don't have compelling data, not because we don't have faith, but
00:59:54we're not projecting any licensing income as yet from those platforms.
01:00:02But we're also not projecting cannibalization because there are whatever the number is now, hundreds of, you know, 150, whatever
01:00:11that number is of the number of tracks that are added to platforms on a daily basis.
01:00:18So we're neither creating uptick assumptions nor cannibalization assumptions because of it.
01:00:27Yeah. The one area that I have been told before is an area where maybe AI is projected to cannibalize
01:00:34is stuff like production music, which is essentially just like background music that's easily licensable.
01:00:39It's not really tied to any artists. It's not really tied to any artists. It's just kind of like library
01:00:42music.
01:00:43I also have heard that about like wellness, ambient, that kind of thing. Is that also what you've heard?
01:00:49It is. And we're really not big in either of those businesses.
01:00:55I would—you know, production music has historically been a very labor-intensive, time-intensive business.
01:01:03It—labor because just to create the music, and then it needs a sales team to actually sell the music.
01:01:09Even before this threat and before where we are today as far as creating music automatically, we've never been compelled
01:01:18by that business.
01:01:19So we just don't have anything significant outside of some big theme songs of which aren't, you know, getting replaced
01:01:27but are existing.
01:01:28We've never invested in that business as a—on an ongoing basis.
01:01:32But I completely agree with you that there is a certain class of commodity music that will be or has
01:01:44been wiped out.
01:01:45Yeah. Yeah. And one of the things that I've been talking with my co-workers over the last year is
01:01:51that there weren't a ton of like big headline deals in 2025, at least not that ended up in the
01:01:55press.
01:01:56Maybe some of them happened behind the scenes.
01:01:58But we're also hearing, though, that the catalog market is just as hot as ever.
01:02:04So is that true?
01:02:06Yeah.
01:02:06Okay, so it's still red hot?
01:02:07We're seeing that.
01:02:09We're still reporting over a billion dollars in our deal flow.
01:02:12We're still seeing processes that are competitive.
01:02:15And we're still seeing some pretty significant size deals on the market.
01:02:21Got it.
01:02:21Okay.
01:02:22So we are nearing the end of our time here.
01:02:25I wish I could talk to you for a longer time about like all of the kind of new revolutions
01:02:31and how people are financing these deals and stuff like that.
01:02:34But I think we'll just have to have you back on for another time to talk about ABS and all
01:02:39those fun topics.
01:02:40But for now, I wanted to end off our show with what we do at the end of every episode
01:02:45of On the Record, which is what would you cue?
01:02:48And so I did give you these in advance so you could prep on this part because I never want
01:02:53to blindside someone with asking them about their favorite music.
01:02:56I feel like that's tough.
01:02:58Especially somebody in music.
01:03:00In music.
01:03:00Exactly.
01:03:01I hear all the time from people that this is the hardest part of the interview for them and they
01:03:06all agonize over it for hours.
01:03:08So, okay.
01:03:09What would you cue to take you back to your childhood?
01:03:12Video kill the radio star.
01:03:14Great answer.
01:03:16Okay.
01:03:16What would you cue to represent your favorite era of music?
01:03:21The 90s.
01:03:22And I'm going to cheat a little bit.
01:03:26De La Soul, Me, Myself, and I.
01:03:291989.
01:03:291989, but still it's the 90s.
01:03:32Yes.
01:03:32Popularized maybe in 1990.
01:03:34Maybe.
01:03:35Exactly.
01:03:35We'll do that.
01:03:37Okay.
01:03:37What would you cue to remember the best concert you ever went to?
01:03:41Interestingly, it's recent.
01:03:43Hmm.
01:03:44Okay.
01:03:44Not recent, but it's not like 20 years ago.
01:03:48We as a team went to see Silk Sonic in Las Vegas.
01:03:52Fun.
01:03:52It was amazing.
01:03:54I wanted to go to that residency so bad.
01:03:56My mom's like a huge fan of, well, I put her on to Anderson .Paak.
01:04:00Okay.
01:04:01And she was a big fan of Bruno Mars.
01:04:02I feel like every mom is a fan of Bruno Mars.
01:04:04Of course.
01:04:04Yeah.
01:04:04And so I wanted to take her to that, and we never did, and I still regret it.
01:04:09I still regret it.
01:04:10They put on, it was incredible.
01:04:12They need to do a reunion so we can go.
01:04:14I know.
01:04:15Okay.
01:04:16And a bonus specific to you is what would you cue to represent the Reservoir catalog?
01:04:21Havana and Senorita.
01:04:23I know you said just one.
01:04:24Ooh, okay.
01:04:24But female songwriter, Ali Tamposi, turning point for us for sure from just being on the
01:04:31charts.
01:04:32And I have all the respect and time for her.
01:04:36And, you know, she's one of our longstanding clients.
01:04:40She's incredible.
01:04:40And I have to shout out another woman.
01:04:42Yeah, I love it.
01:04:43Well, Golnar, thank you so much for coming to On The Record.
01:04:45Really appreciate it.
01:04:47Thank you so much for having me.
01:04:49All right.
01:04:49Thank you so much to Golnar Khosrowshahi for joining me to talk about the year ahead
01:04:53in catalog sales and how we got here.
01:04:55Thanks so much for listening to this week's episode of On The Record.
01:04:58And if you like today's show, give us a follow on Instagram at BillboardOnTheRecord, where
01:05:02you can find new clips of this show every single week.
01:05:04We'd also appreciate it if you rated our show on your favorite podcast platform, because
01:05:08all of these things help On The Record grow bigger and better than ever.
01:05:13Also, if you like the kind of content that we have on this show, you might like Billboard
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01:05:17So maybe consider giving it a subscription.
01:05:18Head to our website for more information on that.
01:05:21And again, I'm your host, Kristen Robinson.
01:05:24Tune in next week for another peek behind the curtain of the music business.
01:05:26I'll see you then.
01:05:38Tune in next week for another peek behind the curtain of the curtain of the curtain of the
01:05:40curtain of the curtain of the curtain of the curtain of the curtain of the curtain of the
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