Music royalties are rapidly becoming one of the most underrated yet highly profitable investment opportunities, offering both passive income and long-term asset appreciation. While most investors turn to stocks, real estate, or bonds, savvy investors are now exploring music catalogs—assets that generate quarterly income while maintaining resale value.
A perfect example is the recent $350,000 sale of a catalog featuring hits from Trey Songz, Drake, Nicki Minaj, Juicy J, and Justin Bieber, which earned its previous owner a 66.4% total return in just 1.66 years. This investment not only produced quarterly royalty payments but also proved that music catalogs can increase in value over time, creating lucrative resale opportunities.
So what made this catalog such a valuable investment? Let’s break down three key stats that highlight why music royalties can generate an annualized ROI of over 30% and why more investors are jumping into this high-growth asset class.
Stat #1: The Catalog Sold for $350,000, Up from $219,603 in 1.66 Years
A 66.4% total return in just 1.66 years is an impressive feat in any asset class, but for an investment that also produced passive income along the way, it’s even more significant.
Key Stats from the Catalog Sale:
- Original Purchase Price (June 2023): $219,603
- Resale Price (February 2025): $350,000
- Total Holding Period: 1.66 years
- Total ROI: 66.4%
- Annualized ROI: 34.1% per year
Why This Matters for Investors
This sale proves that music royalties are not just income-producing assets, but also resale-friendly investments. Unlike real estate, which can take months to sell, or stocks, which can be volatile, a catalog like this maintains consistent value due to the ongoing popularity of the songs it contains.
Lessons for New Investors:
- Buy catalogs with recognizable artists – Big names like Drake, Justin Bieber, and Nicki Minaj ensure steady demand from streaming platforms, radio stations, and licensing deals.
- Look for catalogs with at least 5-10 years of earnings history – This catalog was over 13 years old and still produced strong revenue, proving that older catalogs can still appreciate.
- Consider resale potential on the secondary market – Many investors don’t realize they can sell their catalogs later for a potential profit, even before recouping their initial principal just from royalty earnings alone, just like this one.
Stat #2: Earned $37,870 in Royalty Payments Before Resale
Beyond the capital appreciation of the catalog, the original investor collected $37,870 in passive income before selling. That means they didn’t just make money from the resale, but also received quarterly royalty payouts along the way.
Breakdown of Passive Income from Royalties:
- Total Royalty Earnings: $37,870 over 1.66 years
- Quarterly Payments: Average of $5,706 per quarter
- Earnings Yield (Based on Initial Price): 17.2% per year
Why Music Royalties Offer Stable Cash Flow
- Unlike stocks, where dividends can be cut, music royalties are paid based on song performance, not market sentiment.
- Streaming platforms like Spotify, Apple Music, and YouTube provide recurring revenue that fuels steady earnings.
- Unlike rental properties, there are no tenants to manage or maintenance costs—just passive income every quarter.
Example: The Power of Recurring Income
This catalog’s consistent earnings made it an attractive resale asset. Even if the resale had never happened, the investor still had a 17.2% annual yield just from the royalty payments.
Mistakes to Avoid When Buying a Catalog for Passive Income:
Ignoring earnings history – Always check if a catalog has at least 5-10 years of stable revenue trends.
Underestimating artist longevity – Songs from established artists like Drake and Nicki Minaj continue earning long after their release.
Not reinvesting royalties – Some investors withdraw earnings instead of reinvesting in additional catalogs, missing the opportunity for compound growth.
Stat #3: Stable Growth—$25,912 in Last 12 Months, Up 2% from the 3-Year Average
One of the biggest concerns for investors is whether a music catalog can sustain its earnings over time. This catalog provided a clear answer: yes, it can.
Key Stats on Earnings Stability:
- Last 12 Months Earnings (LTM): $25,912
- 3-Year Average Earnings: $25,412
- Earnings Growth: +2% YoY, despite being 13+ years old
Why This Matters for Investors
- Earnings stability makes catalogs attractive for both passive income and resale.
- Older catalogs can still grow, proving that music royalties are long-term assets.
- Streaming revenue is compounding, meaning even slight growth leads to long-term gains.
How to Spot a Catalog with Stable Growth Potential:
- Check the LTM vs. 3-year average earnings – If earnings are stable or growing, it’s a good sign the catalog will hold its value.
- Look at the artist’s continued relevance – Drake, Nicki Minaj, and Justin Bieber still dominate streaming, ensuring their back catalogs remain profitable.
- Assess the catalog’s revenue sources – This catalog earned from streaming, radio, and sync licensing, reducing risk by diversifying income streams.
Reason Why Streaming Growth Ensures Longevity
- Songs from Trey Songz, Drake, and Nicki Minaj remain on major Spotify playlists, ensuring continued streaming revenue.
- The catalog includes tracks featured in films and commercials, meaning licensing deals can provide additional unexpected earnings.
- Older songs are being rediscovered by new listeners, especially with TikTok and social media platforms driving new engagement.
Final Thoughts: Why Music Royalties Are a High-ROI Investment
The $350,000 resale of this music catalog proves that music royalties are not just passive income generators, but also appreciating assets with strong secondary market liquidity.
Key Takeaways from This Investment:
- The original buyer earned 34.1% annualized ROI in 1.66 years.
- $37,870 in royalty earnings provided steady cash flow.
- The catalog’s earnings grew 2% YoY, proving its longevity.
How to Get Started Today:
- Sign up for Royalty Exchange to browse active music catalog listings.
- Analyze past earnings and growth trends before placing a bid.
- Start earning passive income and plan for potential resale opportunities.
For investors looking for a stable, high-yield alternative to stocks and real estate, music royalties offer one of the best opportunities available today.
On Royalty Exchange you can sign up as an investor and search through thousands of music catalog listings that include producer and songwriter royalties to some of the biggest songs of the past few decades. Discover why song royalties are one of the best investments to grow your wealth in 2025 and download the free Ultimate Guide To Music Royalties to learn everything you need to know about investing in royalties.
Song royalty acquisitions can be extremely lucrative investments as you can see from this example. Invest in music today and reap the benefits of earning passive income from music rights whose value is independent of macroeconomic markets. Discover how music royalty investing is one of the best passive income ideas to grow your wealth in 2025 and beyond.
