Bowie Bonds

David Bowie in Twin Peaks: Fire Walk With Me (1992)

In the early 1990s David Bowie began to detach himself from the weight of his own musical legacy, and in doing so – which involved disappearing from the hit parade – he nonetheless ended up as one of the richest rock stars in the world. And while it is true that reinvention was more or less the norm for Bowie, what he began in the nineties was nonetheless a novel attempt at finding a way to move forward in a creative sense; one that seemed, indeed, to separate him from many of his peers.

Unlikely as it may have seemed at the time he was recording the records that made him in the seventies and eighties, this was on the cusp of an era – the late nineties into the new century – when it would not be uncommon to see ageing rockers, some associated with its most decadent excesses, being feted by world leaders, or awarded medals of honour and suchlike.

Recently, Bob Dylan accepted a Nobel Prize. But before that the American Presidents Obama and Clinton handed out awards to the likes of Dylan, as well as Led Zeppelin and The Who, while at the same time the list of British rockers enjoying use of the title of ‘Sir’ seemed to grow each year, with Paul McCartney and Elton John joined recently by Sir Ray Davies of the Kinks, Sir Van Morrison, Sir Rod Stewart and Sir Ringo Starr.

Only one of the rock icons of the same generation as those mentioned managed to avoid this symbolic embrace of the establishment, refusing all offers of state-bestowed honours: David Bowie.

Unsurprisingly, given the lengths he went to throughout his career to move past exhausted ideas or forms of presentation, Bowie was very aware of the need to keep himself within the artistic sphere at this particular time, and to resist the lure of nostalgia that accompanied the music industry’s resurgent interest in its own past. This was first as a result of the CD era and then the emerging digital era, which together promised new and unforeseen income streams for recordings that often seemed doomed to enjoy the limited lifespan of chart popularity to keep them in stores, and thus available to be listened to by new audiences.

But once the dawn of the CD made it possible for the industry to see a means to sell once again old music, now repackaged in the new format, and because the CD revolution also freed up physical space in stores, there was just so much more room for a lot of music that had been forgotten about.

The danger in this for artists living through it, if they submitted to revivals based on former glories, was that their careers could easily end up revolving around a demand that they keep revisiting that past, as their audience grew with both old fans rediscovering their music, and new audiences discovering for the first time the hits of a golden era.

At around the same time as he was plotting a new way of working the catalogue that might result in freeing him from the claim of the past, Bowie’s odd cameo in Twin Peaks: Fire Walk With Me – as an FBI agent who had disappeared years before and suddenly, out of the blue, appears in the most mysterious circumstances – seemed quite in tune Bowie’s (music) career at that time: now you see him, now you don’t.

You see, Bowie ‘retired’ his greatest hits (not himself, as rock stars had previously done) after some final performances at the turn of the new decade. I witnessed one of these last shows at which he was going to play the hits from the golden years – the ‘Sound + Vision’ tour, in 1990 – before he temporarily tried to vanish within pseudo-metal / hard rock band, Tin Machine, a number of film roles, but also the world of the visual arts (he had a one man show of his art in London in 1995, and wrote for the magazine Modern Painters during the decade).

Tin Machine (1989)

Some surmised that Tin Machine was just another of Bowie’s disguises: an attempt to disappear himself. It was reported that he introduced himself onstage as David ‘Jones’, and on the cover of the first Tin Machine album cover what we see seems to be a shrunken Bowie, as if he was the least significant figure of the four band members.

When Bowie pops up as Agent Phillip Jeffries in Twin Peaks: Fire Walk with Me, it is entirely unexpected, and not prefigured in any way in what the viewer had seen up to that point. As such, it disrupted whatever the story unfolding on screen. Was it ‘a flash-forward,’ Sean Redmond asks in a recent article, ‘a fragment or figment from Agent Cooper’s dream(ing), or a ghost walking in plain sight?’[1]

Whatever the answer might be, the sense of dislocation that the moment of his appearance represents within the film seemed to produce an oddly typical Bowie moment. It’s like he disappeared in real life and appeared out of nowhere as this fictional character – as if the two events had more than a coincidental continuity. And wasn’t it true that whatever disguise Bowie adopted, we always knew that it was David Bowie anyway?

Bowie as Agent Phillip Jeffries in Twin Peaks: Fire Walk With Me

But that was hardly the most significant event in Bowie’s life at this time.

Distancing himself from his past was a process that gained momentum when he acquired the rights to the valuable master recordings of his back catalogue in 1997 (although it seems to have stemmed from an impulse that actually dates back to that 1990 tour, when he first decided that this was the end of the line for the old hits).

What was significant about 1997 was the the emerging realisation that digital file-sharing presented a real problem for artists who relied on income from record and CD sales. These fears were most notably aired when Metallica sued the main pre-iTunes platform, Napster, for theft of copyright by allowing the sharing of music files via its peer-to-peer platform: a seemingly logical outgrowth of the old counterculture wisdom that drove Silicon Valley tech geeks to innovate, the idea that information wants to be free and could not be contained. Well, it was true: in the digital age, music became information – a collection of zeroes and ones. Files that once copied, could be copied endlessly with little or no time or effort.

Bowie’s own back catalogue, which he was no longer interested in promoting in performance, he realised, could quickly end up worthless in an era of declining sales and rampant file-sharing. So, rather than using the circumstance of obtaining his masters back from RCA Records to become the curator of his own legacy – as others would do – Bowie and his manager tried to devise a way to put this catalogue to use while it still had a present value, in order to finance his continued artistic experiments. It was to be a different way of using a past to sustain future development. And so, Bowie and his business manager Bill Zysblat invented, along with a stock market analyst named David Pullman, what came to be known as ‘Bowie Bonds’. 

Billboard magazine, 15 February 1997.

A calculation was made of the likely cash flows from royalties due on Bowie’s recorded back catalogue up to 1990, which he now owned outright. As the Financial Times reported at the time of his death in 2016, ‘Bowie struck a licensing deal with EMI for his back catalogue’ giving the record company limited-term rights to all of his albums – 25 in total – released between 1969 and 1990. They could re-release, repackage and do whatever they wanted with the catalogue, and in return Bowie would receive substantial funds.

Financial Times, 12 January 2016

‘Those rights were then securitised, turned into $55m of Bowie Bonds, offering a 7.9 per cent annual coupon. The bonds were “self-liquidating”, meaning the principal declined each year, and the rating agency Moody’s blessed the deal with an investment grade credit rating.'[2]

The bonds would mature over a ten-year period, between 1997 and 2007, after which the royalties from this pre-1990 music would once again start to flow back to Bowie himself. Bonds were issued to the value of $55m and sold to investors who might otherwise have put their funds into real estate or more traditional investment ventures.

Others following Bowie into the bond market included James Brown

With the income windfall, Bowie was now free from dependence on record companies, or the need to raise income through touring his greatest hits over and over to please the fans who preferred an earlier version of David Bowiet (as so many of the ageing artists of his generation had been forced to do in the face of declining record sales and resurgent back catalogue CD reissues). Remarkably, by the mid-1990s, it was reported that his personal wealth had been transformed beyond the amount raised by the bond issue, with Britain’s Daily Telegraph newspaper reporting in 1995 that he was ‘the richest man in British rock music’ – outstripping even Paul McCartney – and with a personal fortune of ‘more than half a billion pounds, thanks to canny overseas investments, a bond issue and rights to his back catalogue.'[3]

In 2002, more than ten years after this experiment in fund-raising, Bowie was still anticipating that things would go much further in the same direction for the music business as the internet promised to affect every facet of life. ‘I’m fully confident that copyright, for instance, will not exist in ten years. Authorship and intellectual property is in for such a bashing. Music itself is going to be like running water or electricity’, he said.[4] Yet, there was much that had not yet happened, including the arrival of iTunes to normalise the idea of paying for downloaded music.

In the last decades of his life – and hindered by serious illness in the early 2000s – Bowie kept working an artist who was living in his own present time, thinking about the future as opposed to the past. Following the Bowie Bonds were a series of eclectic albums, not always received with affection, from 1997’s Earthling to 2016’s Blackstar (completed weeks before he died) that demonstrated his unwillingness to let time and age erode his artistic impulses.

Notes
[1] Sean Redmond, ‘David Bowie: In Cameo,’ Cinema Journal, Vol. 57: 3 (Spring 2018), p. 152.
[2] Dan McCrum, ‘A Short History of the Bowie Bond,’ Financial Times, 11 Jan, 2016.
[3] Alison Boshoff, ‘Bowie Tops the Money Charts,’ Daily Telegraph, 29 Oct, 1997, p. 3.
[4] Jon Pareles, ‘David Bowie, 21st-Century Entrepreneur,’ New York Times, 09 June, 2002, p. 30.