Did George Harrison Accidentally Create the Modern Music Business?

It’s not often that The Wall Street Journal inspires one of our posts, but a recent article there by financier Josh Harlan ties neatly, if oddly, into the music history we love so well.

A lot has been written about the changing fortunes of the music business as it transitioned from physical media like vinyl and CDs to (mostly) electronic distribution. Individual artists may be struggling harder than ever to make a living, but the industry as a whole has found a new footing.

When Spotify announced that it paid more than $11 billion in royalties and related payouts to the music industry in 2025, the headline landed like a milestone. A decade ago, streaming was still fighting for legitimacy; today, it’s the engine of a global intellectual‑property economy. But the deeper story is stranger and more circular: the modern music‑rights marketplace—catalog valuations, royalty securitization, private‑equity funds buying up songbooks—can be traced back to a single moment of frustration from George Harrison.

It begins with a protest song. It ends with Wall Street. And in between is one of the most improbable chains of cause and effect in pop‑culture history.

A Protest Song Born From a 95% Tax Rate

In 1966, the Beatles opened Revolver with Harrison’s “Taxman,” a sharp, funky track that captured the band’s growing resentment toward Britain’s punitive tax structure. At the time, top marginal rates reached 95% on “unearned” income, a category that included songwriting royalties. Harrison distilled the absurdity into a single line: “One for you, nineteen for me.”

For a band that had gone from Liverpool clubs to global fame in four years, the math felt like punishment. But unlike the Rolling Stones—who would later decamp to the South of France to escape similar pressures—the Beatles wanted to stay in Britain. Their solution wasn’t exile. It was financial engineering.

That decision would cost them control of their own songs. But it would also create the blueprint for one of the most lucrative asset classes of the 21st century.

Northern Songs: A Tax Shelter That Became a Time Bomb

To blunt the tax bite, the Beatles and their advisers created Northern Songs, a music‑publishing company floated on the London Stock Exchange in 1965. The idea was simple: wrap Lennon and McCartney’s compositions in a public corporation, spread the income across shareholders, and reduce the band’s exposure to the highest tax brackets.

As Harlan deftly explains, “for a while, it worked. Royalties flowed. The Beatles held significant stakes. The Inland Revenue took less.

But the stock market is a ruthless custodian of art.

In 1969, Northern Songs co‑founder Dick James sold his controlling shares to ATV, the media company run by Lew Grade. Lennon and McCartney tried to counter the move, but they were outmaneuvered. In a single transaction, the most valuable song catalog of the 20th century slipped out of the Beatles’ hands.

Authorship remained eternal. Ownership did not.”

Michael Jackson Enters the Story

The saga could have ended there—a cautionary tale about artists losing control of their work. But the next chapter is even more surreal.

In the early 1980s, Paul McCartney collaborated with Michael Jackson on a series of duets. During those sessions, McCartney offered Jackson a piece of friendly advice: the real money in music wasn’t in touring or record sales. It was in publishing.

Jackson listened.

So when ATV came up for sale in 1985, he moved quickly, paying $47.5 million for the catalog. The deal included the Lennon‑McCartney songbook and thousands of other works. McCartney was blindsided. His collaborator had just purchased his band’s legacy.

A casual chat between music-titan friends became one of the most cold-blooded maneuvers in music-biz history. Sir Paul was not pleased…

Sony Steps In: The Birth of a Global IP Empire

Jackson’s next move was even more consequential. In 1995, he merged ATV with Sony’s publishing division, creating Sony/ATV, a joint venture that would become one of the most powerful rights‑management entities in the world. After Jackson’s death, Sony bought out his estate’s share and took full control.

It’s hard to imagine the four young Beatles foreseeing how their songs would become first, a tax shelter, and then a cornerstone of a Japanese conglomerate’s intellectual‑property empire, but that’s what happened.

This improbable chain—Harrison’s protest, Northern Songs’ flotation, Grade’s takeover, Jackson’s coup, Sony’s consolidation—did more than shift ownership. It revealed a new way of thinking about music: not as ephemeral culture, but as a durable, cash‑generating asset.

How Publishing Became a Financial Instrument

Before this saga unfolded, music publishing was a quiet, back‑office business. It involved sheet music, radio plugs, and modest royalty checks. But the Beatles’ catalog showed something new: predictable, diversified, legally protected cash flow.

A song can earn money in many ways: radio airplay – and now streaming; film and TV placements; commercials; cover versions, international performance rights; and even TikTok snippets

Each revenue stream was small, but together they formed something close to an annuity. “Yesterday,” for example, has been recorded more than 2,000 times. Every version sends another trickle of income through the metaphorical pipes.

Investors took notice. Publishing catalogs began to behave like utilities—steady, low‑volatility, inflation‑resistant. The Beatles had accidentally created a model for how creativity could be converted into finance.

Today, that model is fully mature. The past decade has seen all sorts of financial engineering leading to breathtaking catalog sales. Underneath it all is a simple logic: great songs don’t depreciate. They compound.

Streaming accelerated this shift. With billions of plays per day across platforms, the royalty flow has become more predictable than ever. Spotify’s $11 billion payout in 2025 is not just a milestone—it’s proof that the pipes built over the past 60 years now carry a global river of money.

And the blueprint for that system traces back to a Beatle trying to keep more than 5% of his income.

On the topic of “one for you, nineteen for me,” the impressive total revenue in the current streaming payouts is concentrated at the top, flowing mostly to pre-internet superstars and catalogs. Modern artists have a much different trajectory, as streaming usually accounts for a negligible portion of their income. Here’s a case in point:

(To be fair, there are also entirely new revenue opportunities for creators. The phonk genre, for example, is making some composers rich as their music gets used as the soundtrack to multiple TikTok clips. But that’s another story for another day…)

The Irony at the Heart of the Story

There’s a poetic contradiction in all of this. George Harrison—the Beatle most associated with spirituality, introspection, and a search for transcendence—ended up sparking a financial revolution.

He wanted liberation from the taxman. What he helped create was securitization.

Yet the irony doesn’t diminish his insight. Harrison understood something fundamental: creativity has value, and systems shape how that value flows. The Beatles tried to defend themselves from an aggressive tax regime. Instead, they pioneered the conversion of art into tradable equity.

Sixty years after “Taxman,” the catalog behind it continues to generate wealth for corporations, investors, and rights holders who had nothing to do with its creation. That’s the paradox of intellectual property: once organized and centralized, it can outlive its creators and compound for generations.

Harrison wrote a protest song. Lennon and McCartney wrote masterpieces. Jackson made a shrewd acquisition. Sony built a global machine.

Together, they invented the modern music business, for better and worse.

-Al Cattabiani (with thanks to our pal Rick Passov for the WSJ tip)

Photo: George Harrison/Getty Images