Turn your passion into income: Invest in music royalties!
Turn your passion into income: Invest in music royalties!
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Convinced by the benefits of investing in music royalties via the purchase of music rights to create your passive income? Decided to invest in a subject that makes more sense to you than the stock market, and that allows you to support your favorite artists? Ready to take action?
If the answers to these three questions are “yes, yes and YES”, then the next question is “but how do I do it?!”
Don't panic, I'll explain everything! ⬇️
1. How to invest in music royalties
1. How to invest in music royalties
There are several ways to invest in music royalties:
1) Via rights trading platforms
1) Via rights trading platforms
Over the past 10 years, several music rights trading platforms have emerged, such as ANote Music, Bolero Music and Royalty Exchange. These platforms are also responsible for collecting revenues and distributing them to investors and rights holders.
I've written a comparative analysis of ANote Music and Bolero Music, the two biggest music rights trading platforms in Europe. Find my final opinion here.
2) Via shares or investment funds
2) Via shares or investment funds
Another way to profit from the perenniality of the music industry is to buy shares in record companies and publishers, such as Universal Music or Warner Music.
There are also funds specializing in the purchase of rights, such as Hipgnosis Songs (public, exchange-traded) or Music Royalties Inc (private).
There are many ways to gain exposure to the fast-growing music market. However, only buying and trading platforms allow you to be both the copyright holder and the direct recipient of related royalties. The other solutions are riskier, involving the stock market and its turbulence.
ANote Music is my platform of choice. It's the first (and only) European platform for buying and trading music rights. This has a number of advantages, not least that it complies with European legislation, and transactions are carried out in euros. Safer and less risky, this is the platform I use for my examples below.
(By the way, ANote Music is offering you €25 on registration using the referral code "faf5f85ZM4".)
2. What should I look out for when buying music rights?
2. What should I look out for when buying music rights?
1) Different types of rights
1) Different types of rights
I'm giving a simplified and incomplete view here, as the subject is vast, but this information should enable you to understand what you're buying.
When a song is created, it is divided into two types of intellectual property:
Publishing: this refers to the composition of the song (lyrics, rhythms, melodies, notes, etc.).
Mastering: the recording of the composition.
These two intellectual properties (Publishing & Master) each hold 3 types of broadcasting rights:
Synchronization right: when the song is used in a film, commercial, etc.
Reproduction/mechanical rights: each time a copy of the music is issued (when buying a CD, a track or a digital album on Itunes, etc.).
Performance rights: each time the song is broadcast on the radio, at events, etc.
On ANote Music, you'll often find “Master” or “Publishing” rights for sale, but also “Producer” or “Songwriter” rights: these are rights comprising a percentage of the Publishing and Master rights.
2) Rights lifetime
2) Rights lifetime
The lifetime of the rights you purchase defines the period during which the rights are in circulation, during which you will receive royalties.
This means that when a lifetime is defined for the rights, they will be taken back from you without compensation once the expiration date has been reached. It's as if you were “renting” the rights temporarily in order to receive temporary royalties. This may seem disadvantageous to you, but these rights often include “future titles”, which over time increases the number of songs on which you receive royalties.
When the duration is marked as “Duration of rights”, this means that you own these rights until 70 years after the artist's death. This is a date that is difficult to estimate in advance.
(Tip: it's when famous artists die that their songs become popular again. Let's hear it...)
3) Les caractéristiques du catalogue
3) Les caractéristiques du catalogue
In addition to the different types of rights available for purchase, two additional criteria interest us:
Buy back: The buy-back clause allows the original holder of the rights to reclaim them if they wish, at a buy-back price set at 15% above the market price.
Future tracks: This feature indicates whether the purchased rights include the artist’s, catalog’s, publisher’s, etc., upcoming titles. This is particularly interesting because it means the catalog is renewed, and we benefit by default from the success of new releases.
Curious? Discover ANote Music for yourself by creating a no-obligation account.
Main composition of the “MRI Selection” catalog on ANote Music, featuring Drake, The Who, Avicii, The Kinks, Avril Lavigne, Elle King...
4) The included songs
As Warren Buffet said, buy what you know. It’s always easier to estimate the success of songs and artists you are already familiar with. The number of views and listens is also a good indicator of a catalog’s popularity.
As an anecdote, my first purchase of copyright was for a catalog featuring songs by Vianney. Not exactly my cup of tea, but I knew he had some success in France and Belgium. And my royalties were on point!
5) Past earnings to estimate your return on investment
5) Past earnings to estimate your return on investment
Average performance is a good way of calculating the value of your future royalties. Taking the results of the “MRI Selection” catalog, here's what we can deduce for the year 2022:
13,956€ have been distributed to rights holders;
There are 10,000 rights shares for this catalog. This means that one share has earned its holder €1.3956 (13,956/10,000);
Also to be taken into account is the evolution of the value of the share. At the beginning of 2022, a share was worth €20. By the end of 2022, this same unit was worth €21.1, i.e. an additional €1.1 per unit;
Over one year, the total return per unit is therefore ((1.3956+1.1)/21.1) = 11.83%!
It's also interesting to compare income from previous years. Stable annual revenues indicate that the songs in the catalog are still being listened to, and are “aging” well with fans.
Discover ANote Music.
Create your own passive income. Make the most of it!
Careful? You're right. Take the time to discover the platform at your own pace. And if you decide to invest, you'll receive €25.
Register with no obligation at www.anotemusic.com, quoting the referral code “faf5f85ZM4”,
Discover the platform at your leisure,
Deciding to get started? You'll receive €25 as soon as you invest your first €200.
3. Take action & create passive income
3. Take action & create passive income
Now that you know what to look out for, are you ready to take action? If so, all that's left to do is :
Choose your investment platform,
Analyze the various offers available,
Place an offer to buy,
Take advantage of dividends 💰
How much to start with?
How much to start with?
The important thing is to start at your own pace, and with an amount you're comfortable with.
That said, you can get off to a good start with 221.11€. Why this amount?
There's a 1.11€ transfer fee (the only fee payable on the platform).
Shares generally cost between €15 and €40. With 220€, you'll be able to build up an already varied portfolio, such as
2 shares of 'MRI Selection' (Drake, The Who...) at €20 per share,
1 share of 'Sterling Fox' (Avicii, Britney Spears...) at €40 per share,
5 shares of Dynoro at 10€ per share,
3 shares of 'Steve James Producer' (Martin Garrix, Justin Bieber...) at 15€ per share,
7 shares of 'EL Editions' (Vianney, Boulevard des Airs...) at 6€ per share.
With your €220 invested like this in 2022, you would have received €23.67 in dividends at the end of the year, i.e. a performance of 10.71%, not counting the increase in share value!
What's more, ANote Music offers you €25 when you invest your first €200. Your return on investment is boosted to €48!
Of course, it's important to take your time and do your homework before you buy, and never invest money you can't afford to lose. Safety first!
You're more French rap ?
You're more French rap ?
Then Bolero is the platform for you. Every week, new titles from the rap world are added.
Use this code when you register to get 10% off your first purchase: LMZlt9w99UZx
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