Israeli Music Industry Eyes Catalog Sales as Lucrative Long-Term Investments

International music producer and DJ David Bowie pioneered the concept of treating music catalogs as financial assets by selling future royalties from his 25 albums for about $55 million in one deal. This approach, known as "intellectual real estate," has since been adopted globally, with major artists like Tina Turner, Bruce Springsteen, Michael Jackson, and Queen selling their catalogs for hundreds of millions to over a billion dollars.

In Israel, music entrepreneur Benny Menashe, co-founder of Aroma Music and the "Iron Sheep Music" rights acquisition fund, explains that while contemporary hits generate quick revenue, their long-term value is uncertain. He prefers investing in classic Israeli music catalogs that have proven enduring appeal, such as works by Yoram Taharlev and Aviv Geffen, whose songs remain popular across generations. Menashe notes that Israeli catalogs typically sell for a few million shekels, limiting institutional investment.

However, some industry insiders challenge this view, pointing to recent Israeli hits, including Eurovision entries and songs by Omer Adam, as having strong future catalog potential. Singer-songwriter Ivri Lider highlights the risks of losing control over one’s repertoire when selling catalogs, emphasizing the importance of contracts that respect the artist’s values and restrict inappropriate uses of their work.

Menashe illustrates this with examples from the catalog of the late Tzvika Pick, where posthumous duets with contemporary pop stars were carefully managed to honor the original artist’s spirit. He stresses the importance of partnership models where artists retain at least 50% ownership, ensuring mutual benefit and respect.

Lider also recalls his pioneering 2005 collaboration with cellular company Cellcom, which helped commercialize music in Israel despite criticism. He believes that classic Israeli songs like "Zachiti Le'ehov" and "Percha BaMercedes" are becoming timeless and that catalog owners in Israel might play a key role in correcting royalty distribution injustices, potentially benefiting both artists and rights holders.

The article underscores the growing recognition of music catalogs as valuable assets in Israel, balancing financial opportunity with artistic integrity and legacy preservation.