Digital IP & Royalty Investing

Music Royalties

Streaming revenue, catalog investments, royalty platforms.

Investment Overview

Music royalties provide passive income from streaming (Spotify, Apple Music), radio, sync licensing (TV/films), and live performances. Investment access via: (1) Public royalty funds (Hipgnosis Songs Fund, Round Hill Music), (2) Fractional platforms (Royalty Exchange, ANote Music), (3) Direct catalog purchases. Market size: $15B music rights transactions annually. Catalogs trade at 10-20x annual revenue generating 5-8% yields. Top transactions: Bruce Springsteen $500M (2021), Bob Dylan $300M+ (2020), Shakira $300M (2021). Streaming drives 70% of music industry revenue ($17B globally, 2024), growing 10-15% annually as emerging markets adopt Spotify/YouTube.

Market Context & Trends

Music catalog valuations peaked 2020-2022 at 25-30x revenue multiples as investors (KKR, Apollo, Blackstone) bet on streaming growth. However, market corrected 2023: Hipgnosis NAV fell 25%, sellers pulled catalogs as valuations compressed to 15-18x. Cause: Interest rate hikes (private equity used cheap debt to buy catalogs), streaming growth slowed to 10% (vs. 20%+ 2015-2020). Bright spot: Legacy artists (Beatles, Eagles, Fleetwood Mac) maintain premium valuations due to cultural staying power. Risk: Generational taste shifts—Boomer artists (60s-80s) may decline as streaming audience skews younger. Sync licensing (ads, TV, films) provides premium income ($10K-$500K per placement).

How to Invest in Music Royalties

Hipgnosis Songs Fund (SONG): $2B portfolio, Shakira/RHCP/Blondie, 4-5% dividend, London-listed, $1-2/share

Round Hill Music (RHM): $500M portfolio, Beatles/Stones/Parliament, 5-6% dividend, London-listed

Royalty Exchange: Fractional catalogs, $500-$5K minimums, 8-15% target yields, accredited investors

ANote Music: European platform, €50 minimums, 6-12% yields, secondary market liquidity

Primary Wave Music: $2B+ AUM fund, Whitney Houston/Stevie Nicks/Nirvana, $100K minimums (accredited)

Key Platforms & Access Points

Hipgnosis Songs Fund (SONG): Largest public fund, 146 catalogs, $2B AUM, Shakira/Journey/Neil Young

Round Hill Music (RHM): Smaller but outperformed Hipgnosis 2020-2023, Beatles/Stones focus

Royalty Exchange: 1,000+ catalogs auctioned, $500+ minimums, transparent streaming data

ANote Music: EU-regulated, €50 minimums, 100+ catalogs, French/Italian/global artists

Primary Wave Music: Premier fund, institutional quality, Whitney Houston/Stevie Nicks/Bing Crosby

Key Investment Metrics

Streaming trends: Is artist growing (+10% YoY streams) or declining? Check Spotify Charts, Chartmetric

Revenue diversification: Streaming 70%, radio 15%, sync 10%, live/merch 5% = healthy balance

Catalog age: 1960s-1990s catalogs (Boomer nostalgia) most valuable; 2000s+ face displacement risk

Ownership clarity: Co-ownership disputes common (50%+ of catalogs); verify clean title

Revenue multiple: 10-15x fair, 15-20x expensive, >20x speculative (compare to Hipgnosis NAV)

Risk Considerations

Understanding these risks is critical before investing in music royalties.

Streaming rate cuts: Spotify/Apple/YouTube can reduce per-stream payouts 10-20%; directly impacts revenue
Artist mortality: Death boosts streams short-term (+3,000% Tom Petty after death) but long-term uncertain
Generational shifts: 1960s-1980s music may decline as Boomers age out; Gen Z prefers current artists
Catalog overvaluation: 2021 peak saw 25-30x revenue; 2023 correction to 15-18x = 20-40% NAV declines
Illiquidity: Direct catalogs take 12-24 months to sell; limited buyer pool for mid-tier catalogs

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