You don’t have to look far to see streaming and music tech dominating industry headlines. But an equally crucial sector flying under the radar is music assets management and catalogue trading. This complex world of acquisitions, valuations, and rights management remains largely unseen, even as investment banks and funds aggressively enter the space.
Through major deals for artists like Bruce Springsteen, Bob Dylan, and Stevie Nicks, financial giants have now spent billions picking up legacy music assets. Why the big interest? As streaming increasingly drives growth, music catalogues providing long-term royalty yields are a hot commodity. Groups like Hipgnosis Songs Fund, Round Hill Music, Primary Wave, and Tempo have been on a spending spree locking up catalogs acutely aware of their lasting value.
Yet, the average music fan or even industry outsider likely knows little about this sector. That may be precisely how insiders want it to retain control and domain expertise in analyzing catalogues. But signs point to a potential wave of new financial entrants to this space. As major assets get picked over, mid-tier and rising artists are untapped markets. The right catalogue at the right time can deliver windfall returns over decades of royalty earnings.
While publishing rights and old recordings may not be as sexy as TikTok hits, they form the bedrock of an evolving industry. As music assets management matures into its robust branch of the business, expect valuations, activity, and technologies around trading to accelerate rapidly in the 2020s. The hits of yesterday remain big financial assets fueling the industry’s future. Savvy investors in search of real revenue diversification would do well to start tuning into this oft-overlooked corner of the music economy.
Fueling this boom are new players focused specifically on facilitating catalogue transactions. Royalty Exchange is one pioneer — an online marketplace that allows rights holders to sell royalty streams to investors through auction. The ability to buy into songs at the individual track level opens the door for smaller investors and publishers looking to strategically boost specific parts of their portfolio. As technology continues lowering the barriers of catalogue trading, even greater transparency and efficiency around deals are on the horizon. Platforms like Royalty Exchange democratise participation beyond the Wall Street giants. Now everyday investors can gain portfolio exposure to music assets with less capital but potentially significant long-term earnings. Much like the startups disrupting media consumption models, forward-thinking music and royalty trading platforms contain the seeds of the next industry transformation.
The gold rush is on. But for now, few seem to be talking about it or even aware of the mania. That may soon change.
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