Justin Bieber hasn't sold out - selling your back catalogue is good business

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Why artists like Justin Bieber are selling the rights to their songs 🔎 _emilybootle

These funds do more than just boost the money by selling shares – they try and make the artist and their work more valuable, by marketing events, trying to get major sync placements, and working to increase artists’ profile. None of this sounds particularly different to the functions of a label or publisher. I ask Moughan if there’s any real difference. “To be honest, not really,” he says.

Many artists do want to make sure their buyer has a creative offering for their brand or career, Moughan explains. But it seems to me that catalogue sales are primarily a business decision as opposed to an artistic one. The financial advantage of selling your catalogue as an older act is obvious: you may not live long enough to earn the equivalent amount in royalties over the course of the rest of your lifetime.

Bieber’s sale is less clear. We can’t know for sure why he did it, but we can consider the mitigating factors. In the US, income tax is significantly higher than – almost double – capital gains tax. Though it varies according to state, as a rough estimate we can assume that wealthy artists such as Bieber would pay around 40 per cent of their income from royalty payouts as tax.

Money, of course, was not incidental to Taylor Swift’s re-record saga. Swift wanted not only artistic control, but to collect more of the royalties from her own work . Yet we also know she is fiercely protective of her work and her image, and so has taken a risk on – and poured capital into – her re-records, for the sake of her artistry.

 

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