Turn and Face the Strange: David Bowie and IP Financial Innovation

Glam rock, gender-bending costume changes, massive set-piece operas starring aliens fallen to earth … and asset-backed securities.

David Bowie’s endless energy for creative self-invention and musical innovation attracted worldwide fame, making him one of the most-admired performers of his generation. Less well known was his trailblazing role in the use of IP.

Bowie in 1997 sold $55 million of what his representative termed “Bowie Bonds” – 10-year securities paying 7.9 percent, backed by 25 Bowie albums recorded before 1990. He aimed to secure a “higher advance than possible from [a] new distribution deal with [his] record company” and “to buy back publishing rights in some songs owned by a former manager and invest in internet companies,” according to the original “Bowie Bond” prospectus.

“This was a creative, pioneering use of the copyright system - but it is not available to all creators, because many of them do not own all the necessary rights to their works, so securitization of future royalties is difficult, or the creators may not have access to the market for other reasons,” says Michele Woods, Director of WIPO’s Copyright Law Division. “That’s why WIPO is working hard to help the world’s creators boost their earnings in a number of ways.”

“Bowie Bonds”

Bowie Bonds were the first in a line of financial instruments underpinned by creators’ earnings, with followers including James Brown, Marvin Gaye and others. The bonds allowed artists to monetize their work immediately, handing them investment cash up front to diversify their portfolios or make other large acquisitions. Such securitization continues within the creative sector. A recent example, reported by Variety in 2014, is Miramax’s $250 million securitization of its 700-strong film library to support its television and film ventures.

Berne Convention, Beijing Treaty

Existing WIPO Treaties, including the Berne Convention, provide the framework for creators to monetize their creations, and WIPO member states are working on new ways to benefit creators.  On June 24, 2012, WIPO member states adopted the Beijing Treaty on Audiovisual Performances, which grants performers four kinds of economic rights for their audiovisual performances, such as motion pictures: the rights of reproduction, distribution, rental and of otherwise making available their performance. The treaty also grants performers moral rights, among other benefits to help creators.  It will cover music performances contained in audiovisual works such as films and television program.

It will take effect when 30 eligible parties have ratified or acceded to the treaty – 20 more are needed, as of the beginning of 2016.

Bowie himself foresaw how the Internet would cause changes in the distribution of artists’ work, including illegal downloads. In the end, ratings agencies downgraded the rating of the “Bowie Bonds,” as torrent downloads became popular in the early 2000s, cutting into creators’ earnings.

Content Streaming

Now, with the rise in streaming services, such as Netflix, Amazon Prime, Spotify and Apple Music, a new vector for distribution is increasingly available to creators.

WIPO is helping support artists during this technological transition. In fact, World IP Day this April will be looking at the opportunities and challenges arising from the emergence of a global digital content marketplace, with a high-level conference taking place at WIPO in Geneva a few days earlier.