📈 The Comeback of Bowie Bonds
Back in 1997, British Music Legend David Bowie took on Wall Street and raised $55 Million by launching 'Bowie Bonds', which seem to be making a come-back in 2021
Happy Friday everyone!
Remember Bowie Bonds?
I’m sure you don’t because it was back in 1997, that legendary British artist David Bowie decided to take on Wall Street with a bit of financial engineering which would be both so audacious and ahead of it’s time, that they seem to be making a comeback, now in 2021 💸
Before we break this down further, let’s first round-up the biggest stories in Music and Business for this week 👇🏻
Shopify & Spotify’s Strategic Partnership 🤝
The two most exchangeable brands/verb combinations in the Tech space just partnered up to end all your tongue twisting woes.
Spotify announced a partnership with Canadian E-Commerce giant Shopify that will allow artists to connect their Spotify profiles with their Shopify stores, and let them market their merchandise directly to fans through the Spotify app 📲
Pretty sick right?
After connecting their ‘Spotify for Artists’ accounts with their Shopify online store, artists will be able to sync their product catalog to Spotify to display whatever merch they want to show-off to their fans 👕
With fans and investors having a track record of mixing up the two tickers of $SHOP & $SPOT on Nasdaq, both the companies founded incidentally in 2006, had a sweet exchange on Twitter announcing the move 👇🏻
Wu-Tung Clang’s Album bought by a DAO for $4 Million
We know a lot of people minted a lot of money in the Crypto bull run of this past 18 months, but when digital organisations start changing how real-world stuff works, one’s gotta step up and take notice 🤔
PleasrDAO, a Decentralised Autonomous Organisation of 70 plus members with north of $100 Million locked in its value, just bought the rarest of rare albums by New York based legendary Hip-Hop group Wu Tung Clang 💽
The album: ‘Once Upon a Time in Shaolin’ has only one published copy, and a wild background story of being originally owned by former hedge-fund manager and convicted felon Martin Shkreli, and eventually being re-possessed by the US Government 🇺🇸
Check out the entire piece by Forbes, as they break down the colourful history of what is considered the original NFT in Music, long before Crypto ever existed 👇🏻
The name’s Bond, Bowie Bonds 🤵🏻💰
And finally, our topic of the day: Bowie Bonds 📈
In a career spanning more than half a century, in which Bowie released 25 Studio Albums and recorded more than 400 songs, establishing himself as one the best-selling artists of all time, the ‘Starman’ accumulated a net-worth of $230 Million at the time of his death in 2016.
A big chunk of this cash pile is credited to him securitising his multi-million dollar royalty income into ‘Bonds’ which paid out a fixed rate of interest to investors over a 10 year period starting from 1997.
How did it work?
Conceived with investment banker David Pullman, Bowie offered a fixed annual return of 7.9%, over a period of 10 years, all backed by his royalties, and managed to raise $55 Million from the proceeds of these Bond sales 💰
However, that’s hardly the impressive bit and this is where Bowie’s sheer genius comes into play 🙌🏻
Bowie used the money these bond-buyers ‘lent’ him to re-acquire his own recordings catalog, which is probably now worth somewhere up to $1 billion 🤯
Despite this, things did not go as smoothly as planned. One must remember that the entire Music Industry was disrupted to its core in the late 90s once Napster rode the Internet wave to crash the money-printing machine
In the case of Bowie bonds, the underlying asset – i.e. Bowie’s music, and the money it was generating – suddenly looked rather vulnerable as the age of piracy crashed into the age of CD sales.
In fact, Bowie had the foresight to actually predict how big the Internet would be in 1999, when everyone around was still scratching their heads around it 👇🏻
Check out this entire piece by Music Business Worldwide, as they explain how the ‘Bowie Bonds’ suddenly looked vulnerable in the 2000’s due to the nosedive in royalty income post the Internet era, and how they’re making a comeback in 2021
David Bowie remains one of the most charismatic and experimental artists of all time, and I personally have started going down the rabbit hole of his entire discography.
Check out some of his playlists on our app, and soundtrack your weekend with music that is bound to be relevant even a century from now 🎶
Have a good weekend everyone!