Copyright Pimping as Novel Business Practice?

I don’t think so. Who knows, maybe Harry Fox or ASCAP will file a business methods patent infringement suit:

Bertelsmann and K.K.R. in Music Rights Venture (pdf)

Less than a year after Bertelsmann, the German media giant, exited the music business, it is taking a novel approach to get back in.

The company said Wednesday that it would form a joint venture with the private equity firm Kohlberg Kravis Roberts & Company to license and administer music rights.

The new company will combine Bertelsmann’s existing BMG Rights Management unit with the financial muscle of K.K.R., which will own 51 percent of the joint venture, with Bertelsmann holding the rest.

And while BMG’s indirect competitors will be the music publishing titans of the world, like EMI, Warner Music, Universal and Sony — companies that market the immense catalogs they own — BMG is counting on signing artists who are seeking someone who will administer their intellectual property without actually owning it.

Also, we get this sign that the NYTimes is struggling to manage their own content: Partners Fancy a Trove of Songs (pdf). I mean, really — this should all have been put into a single article.

That has raised expectations that copyright owners like EMI, which is highly leveraged, may need to sell assets to pay down debt and fix their recorded music operations. Similarly, Warner may seek to monetize part of its library to finance a bid for the recorded music arm of EMI, should its owners at the buyout firm Terra Firma wish to sell.

And copyrights owned by the estates of Michael Jackson and Allen Klein, the former Rolling Stones manager, may come on the block. The Jackson estate’s share of its venture with Sony, which holds the rights to most of the Beatles’ music, was valued at $390 million in a 2007 audit.

Though Bertelsmann sold its music business last year, some of its executives stayed on and Bertelsmann kept some of its music rights. So the venture has the skill to build a rights business. Now it also has the cash. K.K.R. is contributing 50 million euros ($69.2 million) for a 51 percent stake and has earmarked another 200 million euros ($277 million) for future acquisitions.