When Streaming Giants Meet Passive Income
In the world of royalty investing, few opportunities shine as brightly as the chance to own a share of the earnings from global megahits. That’s exactly what the winning bidder in a recent Royalty Exchange auction secured—publishing royalties from hit songs by Drake, Beyoncé, and Megan Thee Stallion. The final bid of $535,000 gave the investor access to income from streaming, radio plays, sync deals, and sales for 36 tracks, including Drake’s viral sensation "In My Feelings".
So, what made this music catalog so valuable, and why did it draw 72 offers from 8 different investors? Let’s break down the financials and long-term prospects of this asset.
What Was Sold: A Look at the Asset
- Sale Price: $535,000
- Last 12 Months' Royalties: $65,559
- 3-Year Average Annual Earnings: $68,551
- Total Earnings Since 2018: $534,721
- Tracks Included: 36 songs
- Top Hits: "In My Feelings," "Nice For What," "Break My Soul," "Ride or Die"
- Term: Life of rights (life of the author plus 70 years)
This catalog’s earnings come from a variety of revenue streams, including streaming platforms like Spotify, YouTube, and Apple Music, as well as sync placements in movies, commercials, and TV shows.
The Hits That Make This Catalog Shine
1. "In My Feelings" – Drake (2018)
- Spotify Streams: 1.4 billion
- YouTube Views: 740.5 million
- TikTok Views: 540 million
When "In My Feelings" dropped, it took over the world thanks to the viral #InMyFeelingsChallenge, with millions recreating the now-iconic dance moves to Drake’s infectious hook. The song topped the Billboard Hot 100 for 10 weeks and remains a streaming powerhouse.
2. "Nice For What" – Drake (2018)
- Spotify Streams: 1.2 billion
- YouTube Views: 506.5 million
This empowering anthem, built around a Lauryn Hill sample, became a cultural touchstone and another Billboard No. 1 hit for Drake.
3. "Break My Soul" – Beyoncé (2022)
- Spotify Streams: 411.5 million
- TikTok Views: 1.1 billion
Released as a motivational anthem during the pandemic era, Beyoncé’s track became the first No. 1 single from her album Renaissance and sparked a wave of viral content celebrating resilience and independence.
Streaming royalties drive the majority of this catalog’s revenue, with Spotify alone generating consistent payments. However, the growing impact of sync placements—such as commercials and film features—adds significant upside potential.
Bidding History: A Competitive Auction
The bidding war for this catalog was intense, with 72 offers exchanged among 8 different investors. Here’s a snapshot of how the bidding escalated:
- Starting Offer: $427,000
- Rejected Offers: $461,500, $475,250, and $480,500
- Final Accepted Bid: $535,000
The demand for this catalog underscores investor confidence in the consistent earnings of music from artists like Drake and Beyoncé, whose releases dominate charts and streaming playlists.
Why This Asset Attracted Investors
1. High-Impact Catalog with Viral Success
In My Feelings wasn’t just a hit—it was a global phenomenon. Viral moments on social media platforms like TikTok have amplified the earnings potential of popular tracks, making catalogs like this particularly appealing to investors.
2. Stable Earnings History
This catalog’s five-year dollar age indicates that it has reached a stable earnings phase. The last 12 months' earnings only deviated by 4% from the three-year average, signaling consistent revenue performance.
3. Favorable Streaming Trends
The U.S. streaming mechanical royalty rate rose to 15.1% in 2023, and this catalog benefits from those increases. Platforms like Apple Music, which offer higher per-stream payouts, have boosted recent earnings by 64% over the previous year.
Pros and Cons of Investing in Music Royalties
Pros:
- Passive Income: Regular payouts from streaming and sync placements provide steady cash flow.
- Diverse Revenue Sources: Earnings come from domestic and international markets, adding resilience.
- Cultural Longevity: Hits from artists like Drake and Beyoncé tend to remain relevant for decades.
Cons:
- Top-Heavy Dependence: Nearly 40% of royalties come from Drake’s "In My Feelings," creating some concentration risk.
- Market Volatility: Changes in streaming policies or licensing agreements could impact future payouts.
- Reversion Clause: Once the life-of-rights term ends, royalty payments cease for the investor.
How to Start Earning Passive Income with Royalty Exchange
- Sign Up: Create a free account at Royalty Exchange.
- Browse Listings: Explore catalogs from artists like Jay-Z, Jimi Hendrix, and Ariana Grande.
- Review Financials: Analyze historical earnings reports to evaluate potential investments.
- Bid on Auctions: Participate in live auctions or place offers directly.
- Collect Royalties: Enjoy passive income from streaming, sales, and sync placements.
Final Thoughts: Investing in Global Superstars
The $535,000 sale of publishing royalties from Drake, Beyoncé, and Megan Thee Stallion proves that hit songs aren’t just cultural moments—they’re financial assets with enduring value. With consistent payouts and the potential for viral resurgence, this catalog offers more than just impressive returns—it’s an investment in the music that defines our time.
If you're a huge fan of these artists or just want to get started with music royalty investing, now you can do so on Royalty Exchange. 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 2024 and download the free Ultimate Guide To Music Royalties to learn everything you need to know about investing in royalties.
