MUSIC INDUSTRY INVESTMENTS
Our areas of investment interest.
We focus on four main sectors:
1. Music Royalties & Catalogs
2. Music Publishing
3. A&R and Artist Development
4. Tour support
Music Royalties and Catalogs:
Music Royalties and Libraries are alternative assets that produce income streams.
To illustrate this point, songwriter Jessie J. paid her rent for 3 years with just one song that she penned. Imagine owning that income stream, and receiving the monthly royalty check.
We invest in the royalty income from songs that have become icons in our culture. Pop Hit tunes, Christmas favorites, Jazz Standards, Pop, and Rock Classics. These are songs that continue to create income and even enjoy occasional income spikes from placements in TV Shows, Movies, Advertising and Video games.
Investors can more easily gain access to these asset-backed, music royalty income streams for their portfolios.
One particular company did a total of $2.8M in auction sales of royalties in 2014. That number is five times what they sold in 2013. And the royalty auction marketplace is enjoying a strong launch into 2015.
Music Royalties produce Absolute Return
Just as growth stock investing dominated the 1990s and commodities and emerging markets ruled the 2000s, strategies with consistent, absolute returns will dominate investor attention today.
Music royalties can offer steady income that is uncorrelated with market fluctuations.
The explanation traces back to the two main financial components to any song: the master recording, typically owned by a record label, and the rights to the underlying composition, owned by the composer and usually a music publishing company.
The rights holders split a mechanical royalty of 9.1 cents per track sold on iTunes or CD, and they earn a royalty every time one of their creations is licensed for a television ad or radio commercial. Same goes for spins in bars, stadiums and shopping malls and plays on Spotify. Licensing fees for films and TV shows can result in six-figure payouts. Songwriters, unlike recording artists, also get paid for all U.S. radio plays. “Happy Birthday to You” still generates about $2 million per year in publishing royalties.
For every dollar a music publisher collects, it typically pays out half to the songwriter and keeps the rest for itself–while maintaining the copyright, collecting passive royalties and seeking out new licensing deals to generate more cash. A well-managed song can yield the publisher and writer each a payout of 10% to 15% a year of the song’s current market value–a ratio that has stayed fairly consistent over the past decade.
Think of it as an income play with the potential for capital gain or loss. Michael Jackson famously bought a catalog housing the Beatles’ biggest hits for $47.5 million in 1985; he later merged it with Sony’s catalog, and his estate’s share of the joint venture is worth about $1 billion today.
Global music publishing revenues dipped less than 4% from 2008-10.
Like the creativity of the artist, it is something that needs to be supported and protected by a secure legal environment. That is why a safe, adequate copyright framework for artists and labels is so crucial. It is more crucial than ever before in today’s digital world, where copyright is fighting for its place against those who would have music and culture disseminated for free or who would erode copyright protections in the name of “copyright reform”.
It is copyright that makes investment in music possible. It is copyright that allows the industry that helps artists gain a return on its investment, and therefore plough back new funds and resources into the next generation of talent. And it is copyright which underlies the endeavors, the risks and the successes that fill the pages of this report.
$4.3 Billion Dollars of Record Company revenues invested in A&R and marketing.
27% is the proportion of record company revenues invested in A&R and Marketing.
7 out of 10 unsigned artists want a recording contract.
7,500 artists on major labels alone.
It takes between $500K and $2.0M to break a new artist.
Mockingbird will look at various investments with major tours including Las Vegas and Broadway shows.
How music’s global 15.6% A&R investment compares with other sectors’ R&D investment Sector
Overall sector R&D intensity %
1. Pharmaceuticals and biology 14.4
2. Software and computer services 9.9
3. Technology hardware and equipment 7.9
4. Leisure goods 6.3
5. Aerospace and Defense 4.5
6. Electronic and electrical equipment 4.3
7. Automobile and parts 4.2
8. Healthcare equipment and services 4.1
9. Industrial engineering 2.8
10. Chemicals 2.7
Source: The 2013 EU Industrial R&D Investment Scoreboard. European Commission, JRC/DG RTD. R&D intensity is the ratio between R&D investment and the net sales of a company or group of companies.
The Children's music space continues to generate steady revenues year in and year out. New uses for old classics are being developed everyday.
What we do:
We take a thoughtful, long-term approach to building both a stellar song catalog, publishing rights and ownership, new artist development and tour support. Our ultimate goal is to deliver value from every area we deal in, while simultaneously providing all of our clients with the individualized attention they need to succeed.
Mockingbird achieves this goal through everything from synch licensing and song placements, to setting up co-writes and performing international song registration, all while maintaining one of the most transparent and accurate royalty accounting systems in the music publishing marketplace. We’re on a mission to bring back the kind of personalized creative attention that was so inherent to the initial heyday of music publishing, and our boutique size gives us the agility we need to realize that mission. From the iconic hits of yesterday, to the future chart toppers of tomorrow, our love for our music is at the center of everything we do.Inve
stment in music cannot be taken for granted.
Copyright 2013. Mockingbird Entertainment, LLC. All Rights Reserved.