Why Invest?
- Average annualized returns exceed 12%, far outperforming the S&P 500 dividend yield (1.8%) and US 10-year Treasury yield (0.7%).
- Revenue from recorded music has grown 2.4x faster than personal consumption expenditures since 2016.
- Streaming platforms like Spotify have driven this growth, with streaming hours increasing nearly fivefold from 2015 to 2021.
Unlike stocks and bonds, music royalties offer stability and reliable income—immune to market downturns and inflation. Through Royalty Exchange, investors can own rights to hit songs with established revenue streams, providing a consistent, recession-resistant cash flow.
🎵 Music consumption is evergreen—people stream music regardless of market conditions.
📈 Royalty-backed assets generate steady income, unlike volatile stocks.
💰 Royalty Exchange lets you acquire these assets effortlessly—no industry experience needed.
Who’s Involved?
- Creators & Copyright Owners: Songwriters, composers, performers, and producers who own publishing and master rights.
- Institutional Investors: Hedge funds, private equity, and funds like Hipgnosis Songs Fund and Mills Music Trust.
- Platforms & Organizations: Royalty Exchange connects creators with investors, while PROs like BMI and ASCAP collect and distribute royalties.
Key Players
- Funds: Hipgnosis, Primary Wave, Round Hill Music, and others manage billions in music catalogs, featuring artists like The Beatles, Shakira, and Ed Sheeran.
- Platforms: Royalty Exchange facilitates royalty sales, offering creators debt-free funding and investors average ROIs of 13% or more.
- Organizations: Performance Rights Organizations (BMI, ASCAP) and mechanical rights collectors (HFA, MLC) ensure royalties are tracked and distributed fairly.
- Market Size: The global music market is valued at $60 billion, with projections to reach $163 billion by 2030.
Music royalties offer a unique investment opportunity with stable income and growth potential. Dive deeper to understand how creators, investors, and organizations drive this thriving market.
1. Music Creators and Copyright Owners
Music royalty investments start with the creators and rights holders who produce the intellectual property fueling the industry. These stakeholders are divided into two main groups based on copyright ownership: those who own musical works and those who own sound recordings. Let’s break down these two categories.
Musical Work Copyright Holders include songwriters, composers, and lyricists responsible for the composition itself. This copyright protects the core elements of a song - its melody, harmony, and lyrics. It’s automatically granted as soon as these elements are recorded or written down in a tangible form.
Sound Recording Copyright Holders are performers, producers, and engineers who hold the rights to the actual audio recording, often referred to as master rights.
Here’s a quick comparison of the two:
These distinctions are crucial, especially as the $60 billion global music market continues to evolve, driven by the explosive growth of streaming platforms. For example, Spotify saw streaming hours grow nearly fivefold between 2015 and 2021. This shift has opened up new revenue streams for creators.
For copyright owners, their rights include the ability to:
- Copy and distribute their work
- Create derivative works
- Control public performances and displays
- License their rights to others
This setup also gives creators the option to sell a portion of their royalty rights, offering immediate, debt-free cash flow. In some cases, they can access funding in as little as a week.
2. Large-Scale Investors
Institutional investors have been drawn to the music royalty market thanks to its steady returns and lack of correlation with traditional markets. They see music royalties as a new type of asset that can add variety to their portfolios.
Previously, music royalties were reserved for billion-dollar funds and industry insiders—but now, Royalty Exchange has made them accessible to anyone. Whether you're a seasoned investor or new to alternative assets, you can tap into this high-yield, cash-generating market without dealing with record labels or complex legal work.
💡 Own a piece of proven music revenue—just like major investment firms.
📊 Royalty Exchange vets and verifies every deal, ensuring reliable income potential.
🚀 Investing is fast and easy—get started with as little as a few thousand dollars.
Don’t miss out—invest in an industry worth $60B today. Browse opportunities now.
Why are these investors so interested? Here are three main reasons:
- Reliable income streams: Average annualized returns exceed 12%.
- Low correlation with economic trends: Music royalties aren't tied to broader market conditions.
- Strong growth trends: Spending on recorded music has grown 2.4 times faster than Personal Consumption Expenditures (PCE) since 2016.
This mix of consistent returns and portfolio variety has led to the creation of specialized investment funds, each offering different dividend yields:
However, the market is constantly evolving. As CJ Wei, Director of Private Credit at Northleaf Capital Partners, puts it:
"Music royalties are emerging as an attractive asset class within specialty finance, drawing investor interest with a unique blend of low correlation and stable cash yield as part of a broader investment portfolio".
While overall market multiples for music royalties have cooled, legendary music catalogs still fetch premium prices. Investors need to weigh several factors when evaluating opportunities, including:
- The capabilities of the platform managing the royalties
- The diversity of the music catalog
- Current valuation multiples
- Regulatory issues
- Risks like copyright disputes or reversion rights
Despite these challenges, the sector continues to draw institutional interest. With the global music market valued at roughly $60 billion, it's clear why sophisticated investors are paying attention.
3. Music Investment Funds
Music investment funds handle billions of dollars, acquiring music catalogs and giving investors access to diverse portfolios while injecting much-needed funding into the music industry.
Here are some key players in the field:
Hipgnosis Songs Fund oversees 146 catalogs with more than 65,413 songs. Their collection includes 156 Grammy-winning tracks from artists like Blondie, Shakira, 50 Cent, and the Red Hot Chili Peppers.
Primary Wave Music has built an impressive collection of legendary works. In November 2023, they purchased a 50% stake in Whitney Houston's estate for $14 million. Their catalog also features music from Prince, Bob Marley, James Brown, and Ray Charles.
Blackstone, a financial powerhouse managing $991 billion as of March 2023, partnered with Hipgnosis in October 2021. Together, they committed nearly $1 billion to acquire and manage music rights.
Newer funds are also making waves:
The ICM Crescendo Music Royalty Fund is another fund worth mentioning. In February 2025, they acquired a catalog from Grammy-winning songwriter Liz Rose. This collection includes co-writes with Taylor Swift on her "Fearless" and "Red" albums, featuring hits like "You Belong with Me" and "All Too Well".
While major funds are acquiring high-profile catalogs, individual investors can get in on the action too—often at more favorable multiples than institutions. Royalty Exchange provides a marketplace where investors can purchase income-generating music rights directly, without middlemen inflating prices.
✔ Higher ROI potential than institutional-level deals.
✔ Royalty Exchange ensures full transparency and historical earnings verification.
✔ Own a diversified portfolio of songs across genres and revenue streams.
You don’t need a billion-dollar fund to profit from music royalties. Start investing now.
4. Royalty Exchange
Royalty Exchange is a marketplace that connects creators in need of funding with investors interested in income-generating music assets. To date, the platform has facilitated more than 2,300 deals, helping creators raise over $190 million through royalty sales.
With a community of 30,000+ registered investors, Royalty Exchange offers a straightforward and transparent process. Here’s what sets it apart:
Take this catalog featuring songs by Harry Styles for instance. The investor acquired this catalog for $85,000 and collected $33,295 in royalties over 18 months, achieving an impressive ROI of 175.40% after they sold it to another buyer on the platform for $214,500.
For investors, the platform provides opportunities for diversification, with many listings yielding an average ROI of 10% or more. For example, a Kanye West tracks catalog purchased for $18,000 generated $4,441 in royalties over 15 months and later resold for $35,000 - a 103.6% ROI
Royalty Exchange ensures all assets are vetted, with verified historical income and proper clearance for assignment. The platform remains neutral, focusing solely on facilitating transactions rather than providing direct advances or loans.
Royalty Exchange removes all the barriers to investing in music royalties—handling the legal work, rights verification, and earnings tracking, so investors simply collect their payouts. Unlike traditional music investments, there’s no need to manage artists, negotiate contracts, or deal with the business side of royalties—Royalty Exchange does it all.
🔹 Passive income—royalties are paid automatically.
🔹 No music industry knowledge required—just choose a cash-flowing asset.
🔹 Transactions are transparent, with full earnings data provided upfront.
Own a piece of the music industry without the headaches. Sign up today.
5. Performance Rights Organizations
Performance Rights Organizations (PROs) are responsible for collecting and distributing royalties earned from public performances of music. In the U.S., the three major players in this field are BMI, ASCAP, and SESAC.
Each operates differently: BMI is a non-profit with free songwriter registration (publishers pay $150), ASCAP is member-owned with a $50 entry fee, and SESAC is a for-profit, invitation-only organization offering tailored services.
PROs work by tracking and monetizing music played across various platforms, including radio, TV, live events, and digital streams. Businesses using music without proper licensing face fines ranging from $750 to $150,000 per song.
The structure of a PRO also impacts how royalties are distributed. For instance, ASCAP's board is exclusively made up of writers and publishers, while BMI includes other industry professionals, which can influence how royalties are calculated.
For those investing in the music industry, understanding how PROs operate is key. Their established systems and legal frameworks ensure steady revenue streams from public performances, making them a cornerstone of music investments.
6. Mechanical Rights Collectors
Mechanical rights collectors handle royalties for the reproduction and distribution of musical compositions, ensuring rights holders are paid fairly.
In the U.S., three organizations dominate mechanical rights collection:
Harry Fox Agency (HFA) manages licensing for both physical and digital formats. Its Songfile system allows users to search and license millions of songs using unique 6-character identifiers (HFA Song Codes), ensuring accurate royalty tracking.
Mechanical royalty rates:
- Physical copies/permanent downloads: $0.09 per song
- Streaming: $0.06 per 100 streams
The Mechanical Licensing Collective (MLC) is tailored to modern needs. Authorized by the U.S. Copyright Office, it oversees blanket mechanical licenses for streaming services and distributes royalties to rights holders.
Music Reports (MRI) focuses on digital and background music services, offering rights clearance and accounting solutions to simplify the licensing process.
For example, HFA oversaw licensing for Kanye West's "Bound 2." With 750,000 physical copies sold, the copyright holder earned $68,250, while HFA collected $7,848.75 in administration fees. This highlights the essential role these organizations play in ensuring consistent revenue for rights holders.
For music royalty investors, understanding the functions of mechanical rights collectors is crucial. These organizations provide the framework needed for dependable royalty collection and distribution.
Conclusion
The music royalty investment market is an evolving space where creators, investors, funds, and rights organizations collaborate to generate income and drive growth. With Goldman Sachs forecasting the industry to reach $163 billion by 2030 understanding these relationships is essential for navigating the sector effectively.
This ecosystem thrives on the interconnected roles of its stakeholders. These partnerships not only create revenue streams but also encourage advancements in the field. For example, Sonomo reports a 27% median portfolio yield from royalty dividends, highlighting the market's strong financial potential.
With streaming growth, AI-driven music licensing, and rising demand for catalog acquisitions, music royalties are one of the most stable and high-performing alternative investments in 2025. Royalty Exchange provides investors with an easy way to tap into this booming market—offering consistent, passive income from a recession-proof asset class.
🎵 Music consumption is at an all-time high—demand for royalties is stronger than ever.
📈 Royalty-backed assets provide steady cash flow and long-term appreciation.
💼 Invest without managing contracts—Royalty Exchange handles everything.
Take advantage of this growing market today. Sign up and start investing in music royalties now.
Technological developments like analytics, blockchain, and AI are reshaping the industry. These tools are improving efficiency and offering greater transparency in royalty tracking and assessments. Meanwhile, music's presence continues to grow across various platforms and channels, backed by recent updates like the Music Modernization Act and adjustments to mechanical royalty rates. These changes reflect the industry's focus on fair compensation and streamlined operations.
To succeed in this space, investors and stakeholders need to rely on data-driven strategies, diversify their portfolios, and ensure thorough rights verification. Collaboration will remain a cornerstone of progress.
With new royalty frameworks and evolving regulations, the music royalty investment market is positioned for long-term growth and transformation.
