In recent years, as streaming has rapidly become the format of choice for much of the world — and the primary revenue source for recorded music — the value of copyrights has soared. That value climbed even higher when the pandemic flattened the financial engine of the music business — the live-entertainment industry — and copyrights proved themselves to be a remarkably durable asset.

Over the past few months, Bob Dylan sold his song catalog to Universal Music Publishing for between $300-400 million, Neil Young sold half of his to fast-rising upstart Hipgnosis Songs for $100 million, and Stevie Nicks sold hers (along with other intellectual property) to Primary Wave for $100 million as well, sources say. Dozens of artists, songwriters and producers have piled on, commanding dozens of millions for some or all of their music assets, slicing and dicing the pies in a head-spinning variety of manners, many of them selling to investors rather than music companies.

So now that you’ve bought this iconic song catalog, what are you going to do with it? It’s clear how a global music-publishing giant like UMPG will exploit Dylan’s catalog — respectful uses in film, TV, commercials and similar areas — and Primary Wave has spent 15 years building a business to monetize not just songs but artists-as-brands, with everything from official Kurt Cobain Converse sneakers to a recent partnership between Alice Cooper and, believe it or not, Cooper Tires. Hipgnosis is just three years old but has significantly disrupted the business not just by driving up the value of catalogs by paying a jaw-dropping $2 billion-plus to acquire recent hit catalogs from the Red Hot Chili Peppers, Barry Manilow, Fleetwood Mac’s Lindsey Buckingham, Motley Crue’s Nikki Sixx as well as lesser-known but highly lucrative hitmakers; it also has a stated dedication to upend the traditional music-publishing model for a purportedly more hands-on approach it calls song management (a description that makes many established publishers apoplectic — “Isn’t that exactly what we’ve done for decades?,” one says).

Music publishing and related intellectual-property management and exploitation is not a business one enters lightly. Famously called “a business of pennies,” it requires attentive nurturing and development in order to maximize the value of the assets, which accrue passive value, but much more when exploited strategically. A song catalog is an asset much more complicated than, say, a Picasso or even many real estate properties, and some investors seem to enter the arena on the mistaken premise that all songs, or even all hit songs, are created equal. In reality, they are demanding, ephemeral assets that require a lot of attention — pitching, repackaging, finding new opportunities — without oversaturating and thus damaging the artist (a.k.a the brand) or the songs.

On that note, Primary Wave CEO Larry Mestel stresses, “We’re always working in conjunction with the artist or their estate — we’re creating a marketing plan that they sign off on, and then we go and get.” He reels off a dizzying array of recent and forthcoming gets, including biopics and Broadway shows for Whitney Houston, a destination show in a specially built Las Vegas theater for Bob Marley, even a partnership with the Red Cross during the pandemic for Burt Bacharach’s song “What the World Needs Now (Is Love”), along with contests, TikTok campaigns and more. Bolstering the artist’s reputation and brand is as important as commerce: “We did ‘Devo Day’ in their hometown in Ohio — a whole campaign to get the group into the Rock and Roll Hall of Fame,” he says, although that effort has not borne fruit yet. “We’ve got 15 digital strategy people who do playlist pitching, website construction, ecommerce development, social media enhancement, we’ve got seven branding people. Our competitors, aside from the majors, are not built to do what we do.”

As the value of copyrights has soared, Primary Wave has vaulted into the upper leagues of the catalog business, but selectively. “The majors dabble in the acquisition business, and obviously they’re fantastic companies, but they all have millions of copyrights,” Mestel says. “We’re one of the largest music companies in the world right now and we only have 25,000 copyrights — who’s gonna have an easier time prioritizing and marketing?”

Strong words, but an executive for a major publishing company counters, “The people who are paying attention know what we bring to the table, as far as adding value to songs, increasing the value of catalogs, and making sure that every penny in every single corner of the world is collected,” the executive says. “We try to super-serve every catalog, and it comes down to the quality of the people we have. That’s what we bring to the table with our [hundreds of] employees around the world.”

Hipgnosis is just three years old but has significantly disrupted the business, not just by driving up the value of catalogs by investing a jaw-dropping $2 billion-plus for dozens of catalogs ranging from the above-mentioned as well as Shakira and the Chainsmokers, with an emphasis on top writer-producers like Mark Ronson, Timbaland and Jeff Bhasker. Like Primary Wave, it claims to offer a level of TLC that majors can’t always provide.

“I believe that proper song management requires 500-1,000 songs per person, not 20,000, like the majors,” says CEO Merck Mercuriadis, former manager of Elton John, Guns N’ Roses and Morrissey. “We’re about halfway to where I want to be, and ideally, in a couple of years we’ll have 150,000 songs and around 250 people looking after them, and that’s the ceiling.” He points to his company’s work with late songwriter-musician Al Jackson’s catalog (Al Green, Otis Redding, Booker T. & the MGs), which it has raised from $400,000 to $600,000 in annual income in just two years. “When we bought this catalog it was earning reliable income, but 82% of that income was concentrated on one song: [Al Green’s] ‘Let’s Stay Together.’ All of the others had been allowed to languish to the point where they were doing virtually nothing. In the period of time we’ve owned it, ‘Let’s Stay Together’ has gone from 82% of the earnings to less than 50%. [Booker T’s classic instrumental] ‘Green Onions’ has been in 10 different movies in the past 12 months, [Green’s] ‘Call Me’ and ‘Still in Love With You’ in films and commercials, and John Legend interpolating ‘Still in Love With You’ into a new song for his last album. And similarly, [songwriter] Starrah, who is on our advisory board, is constantly interpolating songs from our catalog, and you see some of those become big hits.” (He declined to provide other examples of such successes, in order not to favor any artist or creator, he says.)

However, one criticism leveled at Hipgnosis has been not just the extremely high prices it is paying for catalogs but its investments in what is called “near catalog,” songs that are five years old or less. Many feel that a song’s longevity needs to be proven over years or even decades.

“When you’re buying music four to seven years old and you’re buying it off of its peak earnings,” Mestel says. “Those songs are starting to come off of the radio and they’re streaming a lot less than they were at their peak, so the earnings are going to fall 30% or even 50% or more, depending on how current the songs are. That’s why we buy [I.P. of proven artists like] Ray Charles, Bob Marley, Olivia Newton-John and the Four Seasons, because those earnings can only go up with expanded exploitation.”

Mercuriades has heard all of this before. “What we buy isn’t just successful — it’s extraordinarily successful, and it’s also of cultural importance,” he counters. “Look at the songs we own that are less than 10 years old: Beyonce, Jay-Z, Kanye West, Ed Sheeran, the Chainsmokers, Justin Bieber, Taylor Swift. We own four of the top five Billboard songs of the last decade — these are songs that are not going to go away,” he says, verging into overstatement (Hipgnosis owns a piece of most of those catalogs and songs). “But we also have Neil Young, Lindsey Buckingham and Dave Stewart’s songs with Eurythmics, Nile Rodgers and Bernard Edwards of Chic sitting alongside those newer songs — and importantly, they reflect streaming consumption. It’s a very small catalog with an incredibly high ratio of success.”

Not surprisingly, the activity has attracted many newcomers, and music business veterans are quick to throw shade at private equity and others new to the music-catalog game, scoffing at “people in suits” who “don’t have relationships with songwriters or artists.” But Rob Amir, a partner at the entertainment-focused Vine Alternative Investments — which has a 15-year history in film and TV, notably in its acquisition of Village Roadshow, and recently added the catalogs of superstar artist-DJ Calvin Harris for “around” $100 million as well as Lizzo/Thomas Rhett collaborator Sean Douglas — is ready for them.

“We really believe in the long-term value of creative content, whether generating new content or enhancing the value of the existing IP, and we’ve done this extremely effectively over the past 15 years in film and TV,” he says. “Our focus on film allows us to tap into those relationships and elevate these music catalogs toward symbiotic opportunities beyond music — film, TV, videogames, sports, book publishing — and this gives us a wide perspective of how content can be repurposed, and synergistic opportunities.” And while he says the company has just “a couple” of full-time staffers focusing on music opportunities, he points to the company’s wide network of portfolio companies and its currently small catalog of just a few dozen music copyrights.

“If we need more bodies we’ll take that step — we handle over 600 titles on the film and entertainment side and we’ve exploited that very effectively,” he says. “We started out owning passive assets — film libraries — then we started investing in more actively managed libraries, then structured investments in distribution and content-creation companies, and finally controlling interest, like we have with Village Roadshow. I’m not saying that’s exactly going to be replicated with music, but we do have a blueprint.”

And of course, as values continue to soar, many wonder how long it can last. “To me, there’s no sign of it slowing down, but I do think there are people who are overpaying for catalogs and I think there will come a day where they’re going to have to answer to that, one fund in particular,” the major-publisher executive says, in a clear dig at Hipgnosis. “There will be a day of reckoning, but I think that’s on a company by company level.”

Mercuriadis counters, “You haven’t said this word, but a lot of people have: There’s no bubble here. A bubble is when somebody is overpaying for something that doesn’t have the sort of metrics that these investments have, and I think you’re going to see even more people coming into this space on the back of our success.

“I believe this is only scratching the surface,” he concludes. “I’m not focused on short-term thinking: we’re all in it for the long haul.”