Got $300K?
Investing wisely requires planning and a clear understanding of your financial goals whether you're seeking long-term growth, steady passive income, or a balance between risk and reward.
Some of the more popular venues include real estate and stocks. But for savvy investors, alternative investments like music royalties have allowed their money to work for them.
With music royalties, you can diversify your investment portfolios beyond traditional assets through payments that artists, producers, and songwriters earn whenever their work is played, streamed, or sold. By purchasing a stake in these royalties through platforms like Royalty Exchange, you can tap into a steady income stream tied directly to the performance of music.
Remember the ‘90s hit, "I Got 5 On It"?
An investor purchased its royalties (including that of two more tracks) for $150,000 in May 2023.
In August 2024, they sold it for $235,000. Talk about earning $85,000 in just 15 months! Not only did they profit from the increase in the sale price, but over the course of holding the catalog they also earned $21,379 in royalty payments as well!
Another highly successful sale comes from Harry Styles' debut album whose domestic royalties fetched $214,500 in April 2023. A year and a half prior, the investor only paid $85,000 for the listing. After earning $33,295 in royalty payments during the course of holding the catalog, their ROI was a massive 175.4% in just over a year and a half of holding!
Royalty Exchange offers investors a way to support the arts while diversifying income sources. You can enjoy both financial rewards and the satisfaction of contributing to the ongoing success of the artists and creators they admire. Plus you can earn money from some of songs by some of your favorite artists of all time!
Understanding Your Investment Objectives
Traditional investments like stocks and real estate often correlate with broader market trends, but music royalties offer a different risk profile. By adding this asset class to your portfolio, you can spread risk across different sectors and reduce your exposure to market volatility.
If your primary goal is generating passive income, music royalties can offer a reliable revenue stream, with regular payments based on the usage and popularity of the music in your portfolio. As streaming continues to dominate how people consume music, the potential for earning from royalties grows.
And if you have passion for music, investing in music royalties offers a chance to support independent artists. For instance, American indie pop band Passion Pit's producer royalties were sold in 2022. The initial offer came at $120,000 until the seller eventually settled for $266,250 after several offers from investors.
By purchasing a share of their future earnings, you're investing in a financial asset and also contributing to the success and sustainability of artists who may rely on this income to continue their careers in the industry. This catalog in particular has earned the buyer $51,965 in royalty payments in under 2 years of holding the asset and they can continue to earn from this catalog for life or resell it to another buyer if they receive an offer they like.
Diversifying Your Music Royalty Investments
If you have $300K or more than that, it doesn't mean you'd have to invest in only one catalog.
Just as with any investment, putting all your capital into a single asset can expose you to unnecessary risk. In the context of music royalties, this means spreading your investments across various music genres, artists, catalog age, and catalog sizes.
For example, if one genre experiences a downturn in popularity, royalties from other genres in your portfolio can help balance out any losses.
And Royalty Exchange listings are not just limited to music.
The royalties for the book series, "How to Draw Cool Stuff," by Catherine Holmes was sold for $200,000 in August 2024. Every holiday season, royalty earnings go up since Amazon customers order copies as gifts for their friends and family who are interested in refining their drawing skills.
Another successful listing includes Listerine Antiseptic royalties, which comes with a 142-year earning history of monthly payments for gross sales for the mouthwash. Fun fact: The royalty agreement calls for a flat rate royalty on worldwide Listerine sales, for as long as Listerine is sold. The agreement has been in effect since 1881, and in 1959, its perpetual nature was upheld in U.S. federal court. This particular listing was purchased for $260,000 at Royalty Exchange.
Investing in a range of artists, catalog sizes and listing types allows you to benefit from both established hits, emerging tracks, and trusted brands, so you have a mix of steady income and potential growth.
Successful Investing at Royalty Exchange
Thinking of where to put your money? Here are some successful deals below $300K.
Pop and R&B
Royalties from Mary J. Blige’s “Family Affair,” which is one of her most popular releases from her fifth studio album, "No More Drama," was purchased for $250,000 in May 2024. Mary J. Blige is a legendary artist whose music is timeless and will continue to earn for a very long time. This catalog has seen growth the past year above its 3-year average earnings of 20.27%! Seeing growth of this magnitude from a song over 20+ years old is a huge indicator of success.
Nicki Minaj, Drake, Justin Bieber and other artists, whose works are included in this 54-track catalog, was sold for $219,603 in 2023. The earnings for this catalog are super consistent and the buyer has already received $31,134 in royalty payments in just over a year of holding this catalog.
SZA's debut album, "Ctrl," had its producer royalties sold at Royalty Exchange for $205,000 in 2023. That's 6.26 times the value in the last 12 months at the time of the sale. From what we can tell just based on this other live listing that features songs from SZA's debut album as well, this buyer has seen tremendous growth in earnings since acquiring it. In the previous sale of SZA song royalties, the last 12 months earnings at the time of the 2021 sale were $23,051. As of today, that same catalog has earned $69,396 in the last 12 months!
Rock
Fans of Yellowcard were excited to take part in the sale of the rock band's music catalog in 2018. The term of this deal was for just 10 years of future earnings, but the investor who acquired the catalog for just $56,900 has already collected $105,353 in royalty payments in just over 6 years of holding the catalog so far! That's a total yield of 183.3% already, with 4 years to go of continuous passive income royalty payments. Now you can see why investing in music is so lucrative. Buying music rights from music catalogs is one of the best passive income ideas in 2024.
Dance and Electronic
90's Dance music from Fatboy Slim, was resold on the secondary market to a new buyer in July, 2021 for $25,000. Since then, the earnings have exploded after the song "Ya Mama" was featured in TV and Film. The earnings from this catalog soared from $2,526 in 2021 to $12,860 in 2022! The current holder has already made a total yield of 114.5% in just over 3 years and can continue to collect passive income royalty payments for life!
Movie and TV soundtracks
Quentin Tarantino’s 1991 movie “Pulp Fiction” isn't only popular for being a cult favorite, but also for its soundtrack. The initial royalties buyer paid $129,000 in March 2021, then eventually sold it for $189,000 2 years later! That's a very impressive ROI of 65.2%.
New to Music Royalties Investing?
Check out the hundreds of music catalogs that are up for auction today, and see how you can invest your money wisely and earn a huge ROI. Register now to get started. Invest in music today and reap the benefits of earning passive income from music rights whose value is independent of macroeconomic markets.
Discover why so many investors today are using Royalty Exchange to buy royalties to expand and diversify their portfolio. Get your hands on your favorite music catalog today!
