You Can Now Invest in Music by Beyonce and Ed Sheeran
In 2022, music copyrights generated $41.5 billion in revenue. These music copyrights are notoriously complex in terms of who gets paid. Recording artists, record labels, distributors, songwriters, publishers, and licensing companies could all partially own the rights.
In recent years, global investment firms decided to invest in this asset class. In October 2021, KKR purchased Kobalt Capital’s Fund II Music Rights Portfolio for approximately $1.1 billion. This portfolio included over 62K music publishing copyrights by highly acclaimed artists and songwriters across genres. In October 2022, Primary Wave, a leading independent publisher and home to some of the most iconic songwriters, artists, and record labels, including Bob Marley, Prince, Stevie Nicks, and James Brown, announced that Brookfield Asset Management would buy a significant minority interest in the company.
Now, retail investors, individual investors like you and me, can invest in music royalties. Companies like Songvest, Royal, and JKBX allow you to purchase royalties from your favorite hit songs and artists. These royalties represent a contractual right to receive a specified portion of royalties, fees, and other income streams related to the royalty rights for a specific music asset.
Before You Invest
As with any new investment class, I would proceed cautiously. Recent examples, such as NFTs and Token Offerings, demonstrated how groups, particularly celebrities and influencers, misled retail investors. While this might not be the case with music royalty investments, I have doubts when you are using fandom to drive investment decisions. Music rights are a complex security, even for the most sophisticated investors.
