obras musicales

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Exploiting musical works takes very different forms. Earnings can be generated when they are synchronized in audiovisual works, broadcast on the radio, sold in physical formats or made available and reproduced on online platforms offering musical services upon request, for example.

Another, increasingly popular practice among authors who wish to capitalize their copyrights is selling their musical works as portfolios of rights. The author irreversibly transfers a catalog of songs to a third party interested in exploiting them, for a price. These third parties are varied in nature, although they tend to be investment funds and music publishers.

The transactions cover, at least potentially, the exploitation rights on the works sold, particularly rights of reproduction, distribution, public communication and transformation. The intention and function of the acquiring party is to recover its investment and capitalize it by exploiting the rights obtained through traditional practices that, until recently, lay solely in the hands of music publishers. By legal mandate, however, the authors retain their moral rights on the songs.

What is striking about this is that investment funds are looking to invest in rights as stable securities, and they do so based on commercial success and the revenue obtained in exploiting the songs in previous years.  This capitalization mechanism, therefore, does not appear open to any musical work but only to those that have shown they are capable of generating reliable revenue over time.

Artists like Neil Young and Shakira have chosen to entrust part of their catalog of songs to the investment fund Hipgnosis Songs Fund, founded by Merck Mercuriadis, an evergreen of the music industry. Taylor Swift did the same with Shamrock Capital, as did Bob Dylan with Universal Music Publishing Group. Recently, Ryan Tedder, a songwriter for artists such as Adele, Beyoncé, Paul McCartney and Stevie Wonder, has also taken this step with investment fund KKR.

Ultimately, this practice appears to modify one of the links in the exploitation chain of intellectual property rights on musical works, yielding a more efficient and enticing way of attracting and channeling investment in music. The sound creation industry is therefore moving towards a model in which authors avoid the uncertainty of the market, as a third party assumes the risk on the future earnings on their works.

In any case, this apparent growth in economic power or influence of this branch of the creative industry seems to be adequately compensated by the protectionist nature of intellectual property regulations, which advocates for the protection of the authors.

Author: Clara Sánchez

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clara.sanchez@cuatrecasas.com