Trapital Have Record Labels Turned Into Private Equity Firms?
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Aug 7, 2025 The podcast dives into how major record labels are transitioning into private equity-like firms, focusing on acquiring legendary music back catalogs instead of signing new artists. It explores the financial shifts driven by streaming royalties, which elevate the value of proven hits. The discussion unveils changes in artist deals, a reduction in risk-taking by labels, and the rise of global investors seeking ownership in music assets. This transformation in the industry hints at a new future for both artists and record companies.
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Labels Shift to Catalog Investments
- Major record labels have shifted from prioritizing new artist development to acquiring valuable back catalogs with steady streaming royalties.
- Streaming revived older music revenue, making proven hits more predictable and attractive assets for investment.
Artist Leverage Changes Deals
- Superstar artists increasingly own their music rights, shifting revenue away from record labels.
- Labels offer more favorable contracts today because artists hold more leverage and ownership of masters.
Challenges for New Music Success
- New music today is less predictable and harder to sustain popularity due to vast releases and shifting tastes.
- The ceiling for success is lower, but the investment in making stars is higher compared to 15 years ago.