Investing in music

As a result of technological advancements like virtual reality concerts and instant access to any song, the music industry is entering a new golden era. 

Goldman Sachs predicts music revenue might double to $131 billion by 2030 as consumers tune in. Thanks to a surge in music streaming around the world. Brands like Apple, Spotify, and YouTube have been able to revolutionise the music experience because of increased bandwidth access and quick innovation.

Streaming services provide musicians with a plethora of data on listener behaviour that helps them decide where to go on tour, pitch new songs to producers, learn more about their audience’s demographics, and even raise money for new projects. These initiatives provide additional royalties for music owners like Warner Music (WMG).

Then there are live event firms like Ticketmaster’s parent company Live Nation Entertainment (LYV). An increase in the number of people attending live events could also be advantageous for other companies like Madison Square Garden Sports (MSGS) and Eventbrite (EB).

Individuals

For individuals who are more knowledgeable about the market, memorabilia over time, including musical instruments like vintage guitars and pianos, become a collector’s item and may sometimes sell for thousands of dollars (or more).

Firms

Investors are now bidding on music royalties through crowdfunding platforms like SongVest and Royalty Exchange. These fintech firms establish a music catalog’s estimated value, calculate its available units, and construct a listing through initial public offerings. Then, similar to stock dividends, investors receive quarterly or biannual payouts for their investments.

Streaming Stability

The cash flows from music royalties now have more consistency because to streaming. Owning music intellectual property assets and the royalties produced are now more widely accepted.

Three to twelve months after release, a song’s new music royalty income often reaches its peak after release of three to twelve months. Over the following five to ten years, income drops. The residual income, or “tail,” often fluctuates at this stage but then gradually stabilises.

In conclusion, some investors think that in the coming years, the music sector could be the next big thing for their portfolios.