ALTERNATIVE INVESTMENTS - How To Buy Music Royalties : Royalty Exchange
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- Опубліковано 17 чер 2024
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Royalty payments are made generally as a percentage of the revenue generated for using the asset.
It starts to get a little complicated with all the different types of royalties with music. It’s not important to understand how this exactly works, it’s just a bit of background information.
So there is
Performance royalties - Which means, on the radio, in a cafe, sports stadiums.
Mechanical royalties - Think CD’s, Vinyls, or when streamed on Spotify and UA-cam (this is why if anyone plays music on UA-cam, all the money that video makes goes to mechanical royalties, not to the person who made the video).
Recording Copyrights - This is when a Movie, Tv Show or advertisement plays the song.
Benefits to owning a Royalty
There are two big benefits of owning a royalty.
1. It is an Uncorrelated asset. Which means that other industries don’t really affect a royalty payment. People listen to music when the stock market is crashing. People listen to music when an illness makes everyone stay at home. So if the housing market collapsed, and the stock market went to 0, well the royalty payment would still keep rolling in. As long as people still like music. Royalties will be valuable.
2. It’s very Passive. Music royalties is one of the most passive incomes out there. You can be sick for 3 months, and your royalty payments will keep coming to you. You literally don’t have to do anything.
To do this, the major exchange is called Royalty Exchange. Which you already knew because of the title of this video.
Royalty Exchange is the platform that I’d recommend to find a music royalty.
I’m very new to this asset class, so I am still trying to work it all out. But I think it’s a very strong alternative asset that I would like to diversify into with the right royalty.
But like anything, I will happily be patient and find something that I think is a worthwhile investment.
I hope you enjoyed learning about a different asset class today.
Please leave a comment if you have any questions. I’ll be sure to answer all of them.
See you soon.
Great video man! Learnt so much in 11 minutes.
Thats great, glad it helped :)
Love it... thank you for this video
Thanks 🙏
Oooo! I had no idea you could buy music royalties - that's a super cool idea
It's going to be pretty cool to play a music at a party and say it is your song.
@@AndrewBrownInvesting yeeees))) how cool it would be)))))
A friend of mine was once somewhat famous, & he signed a bad record deal. To him at the time it was awesome cause he got a bunch of money. Afterward he had regretted his decision because he signed away his rights to his music.
After his first tour, the record label dropped him. So he moved on & try to make it on his own.
Anyway I remembered that Michael Jackson bought the rights to allot of the Beatles catalog, back in the 1980’s I put him & Paul McCartney at odds with each other. Well it got me thinking about finding the record label my friend was with & trying to buy the rights to his first album. Mostly as a joke & to mess with him.
Recently I saw Vanilla Ice in an interview & found out that he bought the rights to Queen/David Bowie’s song “Under Pressure”. Though I think that he only owns it for so much time.
Anyway now I’m looking online at bands music catalogs that are for sale. I like the idea of owning 100% of a song & all its rights. Also I can always leave the asset to my family.
Love it already 🤩
buying a song is pretty damn cool.
Wonderful information, thank you
Thanks :)
This guy is 100% correct about Royalties. I wrote a song called "She Only Bitches When She Breathes" several years ago and it has made royalties in excess of $100k and the revenue keeps going up each year. Who knew that an unknown music writer could make money from Royalties on a song that isn't played on local radio stations, it's only played from digital sites on the internet and still generates a decent amount of revenue. And I spend zero dollars in advertising.
Thanks brooo, i didn't even know if something like this exist :)
no problem, its interesting right!
Great video, I've been thinking of investing into royalties such as music. My question is what are the exact steps to purchase them?
Wow! This is really interesting and great idea!
WOW this is my favorite comment now!! thanks a lot for getting your account working. Glad you liked this idea. it's very cool idea to buy music royalties. I want to buy a song just so I can play it at parties and say that this is my song... hahaha
Andrew Brown then every day I’ll be listening to all this songs that you buy
This one is really interesting. You might be onto something with the Latin American tunes that are super popular there but possibly not many people to bid on the royalties.
thanks mate, it is an interesting investment. very passive which is nice
you prolly dont give a shit but does someone know a method to get back into an Instagram account??
I somehow lost the account password. I would love any tips you can give me.
Great video
Thanks, glad it was interesting for you too
this is awesome!
if i buy the rights of a song, can i use the song whenever i want too ?
for example can i use the song in an advertisment or a movie, without asking anyone?
Hello, good sir! Yes, this topic is very interesting and worthwhile delving in to! However, it would be great if they offer more affordable choices because those prices are astronomical! Or maybe there are other places that sell cheaper stuff?
Yes I did subscribe and hit the like button
Too kind
THANK YOU...
Glad you liked this one :)
I really enjoyed watching your video on music publishing it was very informative and I am very interested in investing buying music royalties.
Thanks a lot for the kind words!! Appreciate that a lot .
I’d like to start out gain as much info as I can then start out small maybe buy one song at a time raising my revenue then think about buying others if possible
Great idea. When you do buy something please let me know. I'd like to hear about it
Mr.Brown, I have a question Sir. If you are not a musician, and would like to invest in Mechanical Royalties only, are there any instructional programs, that you recommend,as a guideline to study and apply?
Just watching this video and be able to buy this royalty asset, might be a good opportunity.
Thanks, very glad you enjoyed it 🙂
Never thought about this before. I was hoping for a few more cuts to ACDC...
ACDC would be an epic investment. haha. Cool investment right!
Hi and thank you for the interesting video. I would like to ask you who physically sells the royalties? And how they decide the price? I'm right to think that authorship royalties are unaffected by the transaction?
I'm not sure about authorship. But the price is set with a minimum from the owners. Generally the talent agency. But after the minimum is reached, it's an auction format
How do you actually collect royalties? What are the fees involved?
Very interesting! I had never considered music royalties as a potential passive income investment strategy. I will check out Royalty Exchange. I don't think you mentioned it in the video, but have you already done this yourself?
Thanks for the comment, i've actually bid on about 5 different royalties so far, but they sell above what I'm willing to pay. So just watching at the moment. I want to, but I also want a good investment.
@@AndrewBrownInvesting ah, that's a shame. Hopefully you're able to get one at a good price. If you do, that would be a great video too. You could even add your newly purchased music to the UA-cam video and still monetize haha.
Can you purchase royalties in fractions similar to fractional shares?
If a start with 5000 can i expect a better ROI on the long term ? With how much you would recommend to start buying Music Royalties ?
So I'm not sure how to go about starting as I am very new to this. When I changed to the amount of money I personally can invest nothing was available within my price range on any of the three categories. Might need a little bit more help and learning to come my way before I actually start my journey into this
A beginner should start by investing in a song that is guaranteed to produce income every year, so a good niche market is Christmas songs. "White Christmas" was composed in 1940 and 80 years later it is still played all over the world at Xmas. Mariah Carey's "All I Want for Christmas Is You" was composed in 1994 and 30 years later it still reaches No. 1 in the charts every Christmas.
@@lonewanderer_n7 As you say, the stock market is very efficient and bargains are hard to find. However the songs market is not nearly as efficient as few people are even aware of Royalty Exchange, so bargains are still out there.
Excellent breakdown. I want to get into this. Investing in something you're passionate about is one of my values in terms of making investments. Thank you! are you on Fiverr by any chance?
I'm glad you enjoyed this, it's a cool investment. I nearly bought a song recently it was just slightly too expensive. No fiverr, twitter I have
@@AndrewBrownInvesting Do you have any other songs you bought and is collecting royalties from?! And what’s your Twitter name?! Btw I just signed up for Royalty Exchange. Is so amusing.
No songs at the moment. I wanted Akon, 'dont matter' but just not a good enough price. Twitter is abrowninvesting
Thanks for video. Is there a crowdfunding investment platforms for music royalties. If you are Slipknot fan you can invest, listen and earn
I don't think so, not aware of it 🤷🏻♂️
wo0o0w im sure not much people from my poor neighborhood knows about this. Im going to invest!!
Glad you liked the idea!! Cool investment right!
@@AndrewBrownInvesting yes
Really good video Andrew! My question is, in the Slipknot case, you're only really going to see a return on the investment after the 9th year. Is it really worth though, especially when you can get a higher return quicker on the stock market? Thanks for the video!
I agree, it is not the best return on investment. I am still a stock market person. I just know not everyone wants to invest in stocks so I thought I would provide an alternative. Thanks for the kind words and glad you enjoyed :)
@@AndrewBrownInvesting I did not expect a reply, thanks for that! I'm guessing that if you have the rights in perpetuity, it can be similar to real estate to some extent, right? Would you say that?
I guess you can describe it like that. Except far far more passive than real estate.
@@AndrewBrownInvesting Diversification is always good
@@AndrewBrownInvesting How often do you get paid with stocks? Isn't stock market investing a extremely risky chance?
So can you remake the songs if you want once you own rights? Also can you sell it whenever you want
Yes, you can try sell whenever you want. You can remake the song, yes. But you will have to split the royalties of that new song with other people. You won't be the only person who owns the song. Its shared amongst other parties.
Hi,For a person for example to viu royalties músics the do person go to need to study any course?
Hi, I do not understand the question.. if you are asking if someone needs to learn how to invest in music through a course. Then no. No need. Enough free information on the royalty exchange website
Great video!!!!
Thanks mate
Smart
:)
can you buy these in dollar shares like in Robin Hood?
Unfortunately no, I would have loved a piece of the slipknot royalty... 😐
"life of rights" - are you sure that's really forever? i feel like there's a limit, like x years after artists death or 80 years after release perhaps.
Yes, you are correct. I think 70 years after death of artist. Something like that.
Or us
🙂
What are the tax implications of this? This clearly isn't like a bond where you get your principal back after 10 years in addition to the royalty payments. Let's say someone spends $200,000 to purchase a stream of royalties (which could vary each year), but lets assume you wind up getting back $20K per year. It would take you 10 years to recoup your principal. However, my question is: would you have to pay ordinary income tax on the royalties received during that time? Is the stream of potential royalty payments that you purchased considered an asset that could somehow be depreciated to offset the taxes you would have to pay on the royalty income. It would suck to have to shell out $200,000 and then have to pay ordinary income taxes every year on the royalties received before you even received enough royalty payments to recoup your principal. Someone please fully explain the tax implications of this. Thanks.
Great question and an important topic but I can't give any tax advice or even suggestions because literally every where in the world is different. Royalties are most likely considered income so I guess it is no different to a dividend. But in my country I don't have to worry about tax obligations. Sorry I can't help out on this one
@@AndrewBrownInvesting @Andrew Brown If not having to worry about tax obligations means you don't get taxed on income, maybe I need to consider moving to your country. lol
I want to make a Visualizer video to the song Too little Too Late by Jo Jo i'm not trying to make money i just love video editing and want to make a fair use video. Does anyone sell the song or what do i have to do to find it.? I have a video made but the song is blocked on UA-cam
If it goes back to owner after so many years then I assume you can't sell it to someone before that
70 years is quite a long time. you could easily sell it after 10 years.
Who tracks when the songs are played in let’s say Nebraska? 🤣 Serious question.
So BMI or whoever the agent is, it is their responsibility to track down all the plays. Spotify and UA-cam track it, So that is easy for the agents. But if it was just played at a bar, well technically the bar needs to pay a royalty, but it pretty much goes untracked.
Most revenue is generated through online plays like Spotify and actual concerts and events that do the right thing and pay. But a random dj in Nebraska, well that's not going to be tracked.
🤘🌏🌎🌍
I wonder what royalty taxes are like. Time to research.
Good question? 🤔
@@AndrewBrownInvesting oh wow. Didn't expect a reply from you on a video this old. Great content though. Did you ever dive into this world? How has it gone for you years later?
@@literallykevin So I still haven't bought any royalties as I just didn't feel comfortable with the prices. I want more margin of safety and I didn't feel confident in any royalty yet. But I think the slipknot one might have been a pretty good deal
what is the minimum amount u can invest in music shares
I think I have seen some listings for $1000. But just check the website in the video
Slipknot will have legs just like Black Sabbath 🤘
Would have liked a piece of that royalty...
The most profitable catalogues probably won't ever become available. Artists like, The Beatles, The Stones, Pink Floyd, Queen, U2, David Bowie, Elton John, Abba, Michael Jackson etc. They're worth billions.
Maybe, but Slipknot is pretty impressive.
Absolutely not true. Among the artists who have sold their catalogues in the last year are: Bob Dylan, Bruce Springsteen, Paul Simon, Stevie Nicks, Justin Bieber, Justin Timberlake, Blondie, Neil Young, Shakira, etc.
Andrew what do I do is I only have $1000-$2000 for alternative investments like music royalties. It doesn't look like I can buy anything on RE for that price...
You are right, $2k won't get you much on Royalty exchange. There isn't a viable cheaper alternative for music royalties at this stage. Maybe someone will develop it in the future. :)
Andrew Brown There is if you’re willing to consider overseas investments (the U.K.). Check out Hipgnosis Songs, which is listed on the LSE with the EPIC : LSE:SONG . Itpays out a c.5% and growing dividend from a wide portfolio of royalties.
@@philipsloan6344 how do u get into overseas investments I'm asking as I'm currently in USA but really want to move overseas that's why I'm trying to do passive cashflow
@@philipsloan6344 only thing is management fee is around 2.5% so very expensive and not worth it in my opinion
How much for your video?
i guess its free? haha
once i buy the song, where did i get the royalties payment ?
It will be arranged to get them straight to your bank account.
@@AndrewBrownInvesting Can you get paid monthly?🤔 I'm planning to invest so I can receive few thousand dollars on monthly basis. That's all.
@@jehumilord2886 no, it's often 2 or 4 times a year. Not monthly
@@AndrewBrownInvesting Thanks for your response!
Can I invest in "white and nerdy" by Weird Al?
Currently no, but I thought you'd be all about RiRi or Myley Cyrus?
Isn’t telling everyone this bad because now it’ll get over saturated with bidding competitors
i guess so, lucky my audience is small :)
If it was TV show's or movies Id probably bite o it music not so much that shii to expensive got better luck with stocks its like 200k for drakes album with a 4.16 yield I can get s better return on stocks and stable return on reits then risk this
Agree, better returns out there. But still interesting
So if I’m understanding this correctly if I invest $750k and leave it for 10 years- I’ll only make around 300k?! That’s only a profit of 30k a year.
Yes but you still have the asset if it is life of rights
Super interesting market that i'm sure very few people have heard about. Hopefully you can find some hidden gems through the website from emerging artists!
Also noticed you're not in the usual place with a different background and all haha
haha yes, glad you noticed the location change. Just mixing it up a bit.
Dumb question... does that give you the right to use the song yourself?
What’s the point if you can’t own it for life???
Good point. But it could be a good investment at the right price. Imagine buying $1000 a year cash flow for $4000. Even if it's just for 12 years, you get 3x on your money. 15%-20% ROI is decent
Why would I wanna tie up $4k in something backed by music that normally has a shelf life of 3 months unless it’s already a classic. I’m sure there’s plenty of ways to get a better ROI.
I don't understand why they are trying to get 10 years forward royalties for something that has remaining life of say 7.5 yrs! I understand this is what the seller asks for and you're free to offer much less but still it makes feel not cozy about the whole idea...is like someone is trying to rip you off...!
I also think the numbers don't make sense on most deals.
Anyone with 1st hand experience?
He is not giving the negative side.. could be a paid placement
Not paid at all. The negative side is that I don't think you can get big upside. Plus ROI is probably going to be less than 10%
Good idea but maybe worthless in a few years. Royals exchange is v expensive
What will be worthless? The song royalty?
Yes if no one wants to play it
The content is good, but this industry is still in diapers, which means you made it to the finish line hours before the other people, so.. yeah..dont be discouraged if this video is a little slow on response. Most likely youre just ahead of the industry right now haha the ocean seems to be empty
Hey thanks, appreciate the support
You need to be an accredited investor to begin with.