By James L Walker Jr
ATLANTA – The death of pop music icon Whitney Houston has executives at Sony huddling up with marketing reps in its music and film division for a windfall of revenue from movie and DVD sales over the next year and many decades to come.
Houston was found Saturday at the Beverly Hilton Hotel in Beverly Hills, California where she was scheduled to perform at her mentor Clive Davis’ popular annual Grammy eve black-tie party.
Reports have surfaced that drugs and pills were in the room with an autopsy report due in two months, but nothing official has been released.
Despite this downward spiral of the R&B diva, it is unquestionable that her music catalogue will now shoot to the top of every music chart, i.e., Billboard, iTunes and Amazon.
And for music industry player Sony, it could not happen at a better time. Record sales have dropped significantly since Houston’s debut in 1985 as the “girl-next-door” with a squeaky-clean image who backed up singer Chaka Khan. Her sad, untimely death could reap $1 billion in box office and album related revenue.
Three of her movies have grossed over half-billion dollars and broken all types of records.
Houston’s hit with Kevin Costner, “The Bodyguard”, did a whopping $400 million plus worldwide; “The Preacher’s Wife” with Denzel Washington did about $50 million worldwide and “Waiting to Exhale” (based on the popular Terry McMillian book) with Angela Bassett did over $80 million at the box office.
Her final upcoming film is “Sparkle” featuring Houston, American Idol winner Jordin Sparks and comedian Mike Epps and loosely based on a group of singers trying to become stars but facing issues of family strife, drugs and mobsters. She sings the gospel classic “His Eye Is on the Sparrow” on the soundtrack.
Loosely based on the lives of the Supremes, the movie is a remake of the 1976 classic with Irene Cara (Fame movie) and Phillip Michael Thomas (Miami Vice television series). It was estimated to do $100 million at the box-office, but should double or triple that number with the outpouring of support in the wake of Houston’s death and the muscle of the T.D. Jakes empire that is Sony’s partner.
Meanwhile on the music side, the 170 million records she sold grossed over $2 billion dollars worldwide.
Two years ago, for Houston, Sony celebrated the 1985 release of her debut album “Whitney Houston” which featured the hits “Saving All My Love” and “Greatest Love of All” and sold over 25 million copies worldwide prior the news of her death that sent 42 of her songs into iTunes top 200.
Her rendition of the Dolly Parton penned “I Will Always Love You” sold over 40 million copies when originally released on The Bodyguard soundtrack. It has already shot to the top of iTunes and will mostly like keep selling through the spring and summer.
And, an assortment of music producers and songwriters like Narada Michael Walden, Diane Warren, Babyface, Antonio “LA” Reid, and even Clive Davis will also see millions off future re-releases from producer and songwriting royalties.
A songwriter generally earns 9-cents for every CD sold. So, Babyface who wrote or co-produced on over a dozen songs for Houston could see $90,000 per song, per every million copies sold if his songs are used and re-released. Not to mention BMI and ASCAP royalties for Houston’s music resurfacing on radio again.
The value to Houston, or rather her estate is somewhere in the neighborhood of $50 to $500 million, depending on whether she owned her catalogue or was signed as a regular artist as it is believed.
When you own your catalogue, you license it to the major companies like Sony BMG Music and you can retain 80% to 90% of the revenue. When you are signed simply as an artist, the record label pays you a royalty rate and sometimes gives you an advance against royalties.
For example, when Michael Jackson died three years ago, despite many who disagreed, I reported on CNN the night of his death that he was not in debt per se, and his catalogue was easily worth billions. A few months thereafter, every major outlet confirmed the Jackson music empire could be worth as much as $2 billion or more to Jackson and much more to Sony, which estimates it has sold 35 million records worldwide since his death.
Houston will be no different in terms of worldwide records.
Currently, she is tracking among the top 10 on Billboard. She was originally signed to Arista (Clive Davis’ company), then J Records and now Sony BMG. Collectively there are about 15 albums, which consist of six studio albums, six extended play albums five compilation albums, five box sets, two soundtrack albums and dozens of singles released. Sony marketing will cleverly mix up songs, add never released songs before, and figure out a way to release music for the next 50 years and make over a billion dollars in the end when you combine this with film revenue and DVDs.
Houston for her part, most likely had a superstar royalty rate clause in her contract, which generally pays anywhere from 18% to 25% of the sales price minus the label’s fixed costs, depending on how her representatives negotiated the final agreement with Sony BMG.
With those superstar royalty rates, the estate of Houston would see anywhere between $1.50 cents to $2.00 for every record sold. Thus, assuming her re-releases sell 20 to 25 million copies over the next few years, it is easy to see how her estate could see a windfall of cash to the tune of in upwards of $50 million dollars on just music alone.
On the other hand, had she owned her masters (the final finished project recorded), she would have seen five times as much because her estate would then just license the songs or masters to Sony, which is what the Jackson family and estate has done.
It was reported by the Wall Street Journal in 2010 that Sony inked a 10 album deal with Jackson’s estate two years ago that paid the family $250 million dollars for future albums.
Sadly, The King of Pop did not live to see his musical talents appreciated.
In her death, Houston, as the Queen of Pop, will sell more records in the next few months than she did in the last few years and not be here to enjoy it either!
Attorney James L. Walker, Jr., is based in Atlanta and is an entertainment lawyer. He is the Author of the top selling urban legal music book, “This Business of Urban Music”. He can be found at www.JamesLWalkerEsq.com or you can email him at [email protected] .