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Music Royalty

Published:

Dec 12, 2020


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Published:

Dec 12, 2020


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The music royalties business has seen a resurgence of late, with two high profile transactions announced recently -- Bob Dylan sold the rights to his entire song catalogue (some 600 songs) to Universal Music Group for $300m, and Stevie Nicks of Fleetwood Mac fame sold an 80% interest in her catalogue (which is estimated to be valued at $100m) to Primary Wave. Let’s not forget Taylor Swift either, whose early recording catalogue was purchased by Shamrock Capital Advisors for over $300m.

The recent deals highlight the rising value of music in the streaming era (with multiples paid increasing significantly), and will be income generating assets for the new owners for many years to come. Some of Bob Dylan’s songs, for example, could produce income until 2106. The rise of platforms like Spotify “have brought about a more quantifiable and predictable model for the industry”, meaning investors with very little music industry experience are more confident in their ability to enter into the field as valuations are easier to determine.

While listeners get to consume the product instantly, artists, record labels and songwriters all have to wait months to receive any type of royalty payment as there is a supply chain bottleneck. It is estimated that $100b is trapped across the media ecosystem in accounts receivables. Fintech is playing a crucial role in solving low-cost streaming payments and lending solutions.

Streaming aside, or perhaps because of it, music has generally proven to be a stable, recession-proof asset where returns are much less correlated to the broader economy. Who would have ever thought that in today’s world, music royalties would have so much in common with Bitcoin? Take it from the queen herself (who somehow managed to release yet another album overnight), these really are extraordinary times.

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Music Royalty


From Bob Dylan to Blondie — why investors are buying up hit songs - As artists starved of touring income because of coronavirus pandemic restrictions cash in on old classics, there are plenty of takers. According to music industry sources, the feeding frenzy for publishing rights has effectively doubled the value of such catalogues in the space of five years. Huge pools of money, which normally find a home in assets such as property or infrastructure, are backing companies such as Hipgnosis, Round Hill Music, Primary Wave and Concord. Read more

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