Even if you are tone deaf, you can make money off of music. How? By buying stakes in songs from Beyoncé, Shawn Mendes, Madonna and other musical artists. It’s a bet on royalty payments generated when the songs are streamed…downloaded…used in movie soundtracks, TV ads and video games…or performed in concert. About $3.2 billion is reportedly invested currently in music royalties. Example: The rights to Sesame Street songs, including “Elmo’s Song,” from the estate of songwriter Tony Geiss were bought by a private investor for $580,000 in 2017. They generate as much as $108,000 a year in royalties.
The proliferation of live concerts, online videos and streaming services such as Spotify have boosted music royalty income. Even during economic downturns, these payments are likely to hold fairly steady.
Small investors who want to participate can consider the following…
Hipgnosis Songs Fund (London: SONG) is a British investment company, traded as a stock on the London Stock Exchange, that owns royalty rights to catalogs of about 7,500 songs by composers and pop stars ranging from Aaliyah, Justin Bieber and Beyoncé to Madonna, Rihanna and Justin Timberlake. It actively manages these assets, seeking licensing deals to generate greater income. HipgnosisSongs.com
Royalty Exchange is a Denver-based online auction site that allows individuals to bid for royalty rights to songs. In the first quarter of 2019, the site auctioned off nearly $8 million in song rights. For example, an investor recently paid $73,000 for the rights to 25% of the public performance royalties for the Barry White soul song, “You’re the First, the Last, My Everything,” which earned $6,705 in royalties in the 12 months before the sale. RoyaltyExchange.com