Imagine a world where you get paid every time you listen to your favorite songs at the gym or on your way to work. This is the world of music investments. Big companies like BlackRock have paid a lot of money to own music from famous singers like Bob Dylan and Aerosmith. But now, regular people like you and me can also invest in music without spending tons of money and still make a good profit. Let’s look at a cool example to understand better.
In December 2018, someone bought a part of the rights to songs from the rapper Hurricane Chris, who was popular in the early 2000s. You might remember his songs like “A Bay Bay”, which peaked at number 7 on the Billboard Hot 100 . The royalties sold for $26,250. This was 10.89x the last 12 months’ earnings. These songs make money in different ways, like when they’re streamed, or used in movies/TV. Initially, these songs made $2,410 each year. But after the purchase, they started earning more - now they make about $3,852 every year.
You might think, why do old songs still make money? It’s because music from the 2000s is becoming popular again thanks to apps like TikTok and Instagram. Old songs are getting more attention from being played in videos and also being added to huge playlists on apps like Spotify. “Sure Thing” by Miguel went to number 1 on pop radio and number 11 on the Billboard Hot 100 fourteen years after its release thanks to TikTok. “Running Up That Hill” by Kate Bush reached number 1 on the Billboard charts thirty eight years after it came out thanks to huge Spotify playlists and millions of videos created on TikTok.
Now, let’s talk about how much money this investment has made. The royalties have been growing since they were bought. They’ve increased from $2,410 in the 12 months prior to the sale to earning $3,852 in the last 12 months (59.83% growth). This was mainly due to thousands of videos on TikTok and the song getting added to big throwback playlists on Spotify and Apple Music. The buyer has already made 64% of their initial investment back. And the buyer will collect these royalties for decades to come. And aside from this, they have an offer to sell their share for $38,000. This would give them a total return of $54,813, (108.81% ROI). And this doesn’t even take into account the last two quarters of earnings which are still coming in!
If you find this interesting and want to hear more stories like this about investing in music, let me know. You’d be surprised at how many recognizable songs are up for grabs. Right now you could buy royalties from artists like: Jay-Z, Yellowcard, 2Pac, and more. For a more in-depth analysis and to view detailed earnings alongside the highest offer and sales history of the catalog you can check it out here.
