Entry Yield
Definition
Entry yield is the trailing royalty income divided by the buyer's all-in entry price. In music royalty auctions, it usually means last-twelve-months royalty income divided by purchase price, sometimes before buyer-side marketplace fees. A catalog that earned $15,000 over the trailing year and sells for $100,000 has a 15% entry yield.
Why it matters
Entry yield is useful because it standardizes price across royalty streams of different sizes. It is also dangerous because it describes the past, not the future. Music royalty income can decay, spike, mean-revert, or shift by platform and territory, so a 15% trailing entry yield does not mean the buyer will earn a 15% realized return.
Common misconceptions
- •Entry yield is not the same thing as IRR, cash-on-cash return, or realized return.
- •A higher entry yield is not automatically better. It may reflect short remaining term, concentrated income, recent bonus inflation, or expected decay.
- •Entry yield should be computed on the all-in cost, including buyer fees, when comparing deals.
Technical details
Basic formula
Entry yield = trailing annual royalty income divided by purchase price. If buyer fees are material, the cleaner formula is trailing annual royalty income divided by purchase price plus buyer fees.
Royalty Exchange context
Royalty Exchange auction data surfaces entry yield as a marketplace pricing measure. AltStreet's Royalty Exchange review treats the median 16.6% trailing entry yield across 2,460 completed transactions as a pricing observation, not a performance claim.