Music royalties and media
We buy legendary music albums and media assets like stock videos to earn royalties.
18.4 %
Historical returns
4 %
Maximum allocation
Why invest in music royalties?
Strength of music streaming
Streaming revenue is predictable
Streaming is bringing revenue back to music
Streaming industry market share
How much do streaming services payout to artists
Featured portfolio holdings
Media investment advantages
Predictable cash flows
Viewership on streaming platforms is predictable and such platforms use a lot of analytics to forecast viewership and subsequent cash flow.
Low correlation to general economy
Music spending has historically shown little correlation to broader economic activity.
Higher returns through amortization
Amortization is the process of gradually reducing or spreading out the cost of an investment or expense over a certain period of time. Amortization of intangibles like intellectual property is governed primarily by section 197 of the Internal Revenue Code. Music investments can be amortized to reduce taxability and generate higher net returns.
Universality of music
Music has no boundaries. Popular music apps are global businesses and song tracks are available to consumers all over the world. Apart from large market size, it also reduced cultural and behavioral risk.
Revenue sources
93%
Online streaming
Shared ad revenue and payment from online streaming platforms like Spotify, Apple Music and YouTube.
1%
Cover songs
Other musicians playing songs (also called cover songs) by popular artists for online and public performances.
4%
Corporate purchases
For training videos, presentations or performances in retreats and annual meetings.
2%
Advertisements
Used as background music on television, radio and online advertisements.
Featured portfolio holdings
Stock videos
23.4% IRR
Generic video snippets like helicopters flying, bomb blasts, and cityscapes are purchased by film production houses. It's cheaper than shooting.
90s Hip Hop collection
24.3% IRR
A collection of classic 90s hip hop songs that remain among the top streamed tracks.
Whistle by Flo Rida
16.2% IRR
The multi-platinum winning album is a favourite among clubs and on social media.
Collections of beats
22.8% IRR
Instead of composing, artists and music composers purchase or lease beats to be used in songs.
Invest in a diversified portfolio of unique assets
Consumer behaviour
Music assets are subject to change in trends and consumer tastes. However, it benefits from artist or genre loyalty. Cultural trends can change abruptly. Consumer spending on music is completely separate from general spending.
Risk management
Change of preference
The mic stops for no one but tastes and trends in music can change faster than artists can adapt. The music industry is cyclical so outdated music tends to become popular again after a few years ago.
Cancel culture
Artists may face consequences like being excluded from professional circles, losing sponsorships, and damaging business relationships if they are accused of misconduct such as drug abuse or sexual harassment.
Technology change
Napster disrupted music in the 2000s, resulting in a 15-year decline in the recorded music industry. The proliferation of smartphones and streaming has reversed this trend and helped the industry return to growth. Technological innovation can have a material impact on music royalties, for better or worse.
Inflation risk
Most types of music royalties do not immediately react to price inflation. As discussed, many royalty rates are regulated with a rate structure set for multi-year periods.