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Sony's $250 million bet on Michael Jackson's music could be threatened by HBO documentary

Key Points
  • Last year, Sony Music Entertainment entered a $250 million deal with Michael Jackson's estate for the rights to distribute the musician's recordings.
  • While online streams could get a bump, major radio networks could pull Jackson's songs from the air.
Michael Jackson performing "Thriller" in 1988.
George De Sota | Getty Images

Last year, Sony Music Entertainment entered a deal with Michael Jackson's estate for the rights to distribute the musician's recordings over the course of seven years. Now, in the wake of HBO's explosive documentary "Leaving Neverland," that investment could take a hit.

According to The Wall Street Journal, Sony paid $250 million for Jackson's music, allowing it to reap royalties from music streaming services and radio stations that play songs from the "Thriller" singer's catalog.

While figures from Spotify and Apple Music concerning Jackson's music in the wake of HBO's documentary won't be available until next week, in the past, the number of streams has increased for artists in the public spotlight, regardless of whether the news is good or bad.

In January, after Lifetime aired its "Surviving R. Kelly" documentary series, the R&B singer's songs generated more than 4 million on-demand streams in the U.S., according to Billboard. This was a 116 percent increase in the number of streams that R. Kelly's songs had pulled in the days before the series aired.

"Leaving Neverland" aired on HBO in two parts on Sunday and Monday. The documentary detailed the accounts of two men who say Jackson abused them when they were children.

While online streams could get a bump, major radio networks could pull Jackson's songs from the air for the time being until listener sentiment about Jackson improves. So far, several radio stations in Canada and New Zealand have decided not to play Jackson's music unless it is part of a news story. In both cases, the networks that owned the stations cited a change in public opinion about Jackson for the removal.

Radio remains a big moneymaker for music companies. Deloitte currently predicts that global radio revenue will reach $40 billion in 2019, a 1 percent increase over 2018. The data analytics company also foresees more than 85 percent of the adult population will listen to the radio a least once a week.

"Many readers may scoff at these robust predictions for radio," Duncan Stewart, director of research for technology, media and telecommunications at Deloitte Canada, wrote in a report in December. "'That can't be right … nobody listens to radio anymore.' But radio has commonly been underestimated. Radio is the voice whispering in our ear, in the background of dinner, in an office, or while driving the car."

Read the full report from The Wall Street Journal.