Music royalties, the passive income that generates me an average return of 13% a year.
Music royalties, the passive income that generates me an average return of 13% a year.
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Investing in music royalties has become an increasingly attractive option for investors seeking stable passive income. It allows investors to share in the profits generated by the right of songs and musical compositions.
Let's explore the many benefits of investing in music royalties, based on industry data as well as my own personal experience.
The benefits of investing in music royalties
The benefits of investing in music royalties
1. A booming sector
1. A booming sector
The explosion of smartphones, online streaming and social networking has revolutionized the music industry. Artists and labels are benefiting from the growing popularity of streaming platforms such as Spotify and Apple Music, and consumers are taking out subscriptions like never before.
As a result, industry growth forecasts are being blown out of the water: in 2017, Goldman Sachs predicted that streaming would reach a value of $14.1 billion by 2030. Just eight months later, the company revised that forecast, doubling it to $34 billion. The investment bank also sees the total music revenue market reaching $130 billion by 2030, up from “just” $62 billion in 2017.
Goldman Sachs forecasts for the music industry in 2030. Source : Goldman Sachs "Music in the Air" report, 2023.
Low correlation between spending on music and personal consumption expenditure (PCE), 1994-2019. Source : Euromonitor ; Goldman Sachs Investment Research.
2. Resilient and uncorrelated with financial markets
2. Resilient and uncorrelated with financial markets
We listen to music at all times, regardless of economic conditions.
A study by Nielsen found that consumer spending on music remained constant during economic downturns. Even when discretionary spending (spending on wants/leisure, not needs) declined, music was often seen as affordable and accessible entertainment by consumers. Streaming has reinforced this trend, offering unlimited access for a fixed cost.
Invest in something that makes sense.
Don't get caught up in the complexities of the stock market.
Support your favorite artists and enjoy regular income from their music.
With the boom in streaming platforms and the universal presence of music, it's a simple and practical way to earn money while staying connected to what makes you tick.
Annual revenues for the “Sterling Fox” catalog on ANote Music. Sterling Fox is a producer who has collaborated on tracks by Avicii, Lana del Rey, Tiesto, A$AP Rocky...
3. Predictable income
3. Predictable income
As we have seen, music royalties are now mainly generated by online streaming services. For example, Spotify and Apple Music pay royalties based on a pro-rata model, where revenues are distributed proportionally according to the total number of streams for a given period.
Also, where the success of a new track is fairly unpredictable, an intelligent investor will favor catalogs of well-known, well-established songs, which will continue to generate revenue over time.
This stability, combined with the predictable remuneration system of streaming platforms, enables rights holders to estimate their potential earnings very reliably.
4. Long-term residual income
4. Long-term residual income
Unlike other forms of investment, songs can continue to generate income even years after their release. Streaming makes songs accessible and available on an ongoing basis, helping to maintain their popularity and generate long-term residual income without the need for promotional activities.
The algorithm of streaming platforms has also widened the potential audience for songs, reaching audiences all over the world. This translates into increased opportunities for distribution and long-term revenue generation.
Create your own passive income and earn €25
Create your own passive income and earn €25
Start investing in music royalties and earn €25 as soon as you invest your first €200 in ANote Music.
Register at www.anotemusic.com
When you register, mention the referral code “faf5f85ZM4”.
Invest and buy 200€ of rights on ANote Music
Receive €25!
5. Risks to consider
5. Risks to consider
Before you embark on buying the rights to your favorite artist, there are a few things to keep in mind. Any investment carries an element of risk, and investing in music royalties is no different.
1) Music popularity
1) Music popularity
Income from music royalties depends on the popularity and diffusion of songs. However, it is difficult to predict the longevity of a song's popularity.
Solution: focus on titles that have already proven their resilience, and favor catalogs that include “new” titles.
2) Value of rights
2) Value of rights
Assessing the value of music rights can be complex. Some titles may be overvalued due to their current popularity.
Solution: Use a clear and precise platform, providing all the information, both financial and legal, on the titles in question, so that you have all the keys in hand to assess the value of a title.
3) Management of streaming platforms
3) Management of streaming platforms
As streaming is the primary source of revenue, we need to consider the behavior of the platforms. They could increase their subscription prices, reduce payments, or decide to withdraw certain titles and albums from their platforms.
The solution: keep a close eye on news about these giants and the world of music.
Are you more into French rap?
Are you more into 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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