What do the rappers Nelly and 50 Cent, rock legend Stevie Nicks, and folk-rock icon Bob Dylan all have in common? Each are among the dozens of recording artists who sold rights to their music catalogs—or significant stakes in those holdings—to private equity firms, record labels, investment companies and other corporate ventures in the past five years. The deals have included Sony Music’s acquisition of recordings and music publishing rights for Bruce Springsteen’s song catalog for a reported $500 million to Sting’s sale of rights and royalties for his songwriting catalog to Universal Music Group for some $300 million.
In a Q&A, Jeanne Fromer, vice dean of intellectual life and Walter J. Derenberg Professor of Intellectual Property Law, discusses why the phenomenon of song catalog auctioneering is happening now, explains what makes copyrights in the music industry especially complex, and describes how Taylor Swift successfully crafted an influential template that blends artistic expression with artistic empowerment.
Can you describe the role of copyrights in the music business?
There are copyrights in two aspects. There is the copyright to the musical work, which is the composition, and the copyright in the sound recording. Typically, the record label owns the copyright for the sound recording, and the songwriter or a music publisher typically owns the copyright in the musical work. And then it gets more complicated. There is a bundle of rights in a copyright, including a right to publicly perform the work and a right to distribute the work.
The way it’s worked out in the music industry is that different entities tend to end up controlling each of these different rights in this bundle of rights. So the rights are parceled out to these different entities. The goal of that has been to make things easier for the entities that want access to music (such as radio stations) to obtain the rights for many songs at a time without having to get a license from each party owning the underlying copyrights.
What that has meant is that many artists, I think, have felt that they haven’t gotten their fair share. There are all of these corporate entities that have taken over their rights. And often, artists made deals signing away or licensing their rights when they were starting out, well before they were famous.
As a result, you wind up seeing two phenomena. One concerns artists trying to get back their rights. Copyright law calls that termination. If you sold your house to someone, you can’t come back in 30 years and say, “OK, I want my house back now.” The deal is done, and you sold it. But with a copyright, the author can come back many years later and say, “I want to terminate this deal.” The idea is to give artists a second bite at the apple.
An important exception to the possibility of termination is the concept of “works made for hire.” In general, individuals who create a work own the copyright unless they transfer it subsequently. But there’s special treatment for works created for hire, which is typically when someone is working for a company and creates a work within the scope of employment. In that case, the employer owns the copyright in the work outright from the get go. A number of record companies have been trying to argue that their artists’ songs were works made for hire. I don’t think they’re right in most cases, because most artists are not their employees.
Some think terminations of transfer are great for poor, starving artists—that if they become successful, they can renegotiate and are not going to be stuck with lousy deals they once made. Then there are others who are critical, arguing that termination only helps artists who ultimately become successful. Who else is going to terminate a transfer except for the Bruce Springsteens and the Bob Dylans of the world?
We’re seeing many artists who have decided to sell the copyrights to their recordings. Why is this happening now?
This is a second and newer phenomenon, with musicians and bands selling off their copyrights to private equity firms and other entities that are not traditionally part of the music world. The musicians doing this realize how complicated copyright law is, how complicated the music licensing marketplace is. And they think, “Okay, I’ve navigated this so far. But copyright lasts so long.” And they’re thinking, “My kids and my grandkids are going to have to deal with this. They don’t know anything about this industry. I’d rather just give them money.” The artists themselves also often want a cash infusion of some kind. It’s easier to have cash than to have copyrights that you have to manage and make decisions over.
You also have willing buyers of copyright, whether inside or outside of the music industry. Does it matter who owns these copyrights? Business decisions about the music can be different if it’s a record company or the artist themselves making those choices, or if it’s a private equity company that doesn’t have experience in the music industry deciding. In terms of songs showing up in advertisements for certain products, maybe the artists wouldn’t want that. But if the artists sell the rights to a private equity company and the private equity company licenses the rights for use in a commercial, the artists have to live with that decision.
Ultimately, I think people realize that music is an asset. It’s the same way that a painting is an asset. If you’re an investor and you’re looking to make money, why not invest in music that you think will have a long life?
But is it the case that artists believe there’s a finite window in the value of their recordings?
There’s been some scholarship that has shown that the economic value of a song is usually pretty short in the grand scheme of things—very far from the time frame of copyright law, which protects work generally for the lifetime of the author plus 70 years.
But I think economic value can cycle, as the music industry has changed from when it was a world of radio and records. Back then, musicians and the labels made a lot more money off of records. And then the world changed into one in which people started going online and file-sharing—that really brought down the value of music. But not that long thereafter, a marketplace was being created with iTunes to buy music digitally, and then eventually with streaming on Spotify and so forth, which infused a lot more value back into the music.
There are some holdouts with artists like Alice Cooper and Jay-Z staunchly refusing to ever sell their rights. Some critics have raised the issue of artistic integrity with the sell-offs. How do you see it?
A lot of people have issues with artists selling out, but [artists are] already typically working with a record company that is distributing their work. And many artists are working with an entire industrial apparatus that, I think, is often very obscure to consumers. And so I leave it to other people to judge for themselves whether they think artists have sold out by doing that. But if they don’t think that they’ve sold out by doing the traditional component of selling and licensing rights in the industry and of bundling various products and merchandise, then selling the rights to a private equity company doesn’t necessarily feel that different to me.
Are there any thorny legal issues that you see with these deals?
You can have different rights in the bundle of rights with different owners. So you just have to be very cautious in navigating the thicket of rights to make sure that you’re in the clear if you want to use music in a particular way. People outside the music industry who are buying into the space need to understand that.
In 2019, Taylor Swift and her then-record label, Big Machine Records, dueled over the ownership to the masters for her first six albums—resulting in her decision to re-record those works. Can you talk about the significance of that?
There has long been this technicality to copyright law that allows artists to record new versions of their older music, just as artists can cover others’ previously released music. Swift was very skillful in exploiting this technicality with the re-recordings. She really brought a lot of attention to the issue. And she was also able to tell a story from her perspective about this awful thing that happened to her with the label and her music, which got her fans behind her.
More broadly, I think Taylor Swift has exemplified the possibilities for artists in the current era. She’s often releasing new versions of albums, books, and videos while touring for years on end. This is an extreme example. But I think it shows the different ways that musicians can monetize what they do, even though it’s also very grueling to do.
What issues are you watching in relation to the music industry and copyright law?
How do you figure out how to compensate artists and copyright holders for the use of their work in ways that are fair and make the music industry vibrant?
There’s long been a criticism that artists themselves are not left with much, but there are now all of these mechanisms arising around the artists to distribute and publicize their works. It’s a complicated beast, and I think it’s growing more complicated over time with streaming and the use of music online that will require keeping an eye on. Congress has been attentive to thinking about how to parcel out money and the mechanisms for doing that. But I think it’s going to require continued attention.
Posted March 27, 2025