Odd Lots Why Music Back Catalogs Have Become a Red-Hot Asset Class
Mar 8, 2021
Alastair Moen, an independent music valuation expert, discusses the booming market for music back catalogs. He reveals why musicians like Bob Dylan and Shakira are selling their rights now, driven by financial trends and cash flow needs. The conversation touches on the impact of streaming on valuations and the complexities of music rights. Moen explores how these catalogs are becoming attractive financial assets and even hints at a future where retail investors may own shares in popular music, reshaping the industry and its economics.
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Music Catalogs as Assets
- Music catalogs are attractive to investors due to streaming's impact on the industry.
- Repeatable consumption and better data make future cash flows predictable.
Catalog Valuation
- Buying a music catalog involves acquiring either master rights (recording) or publishing rights (song composition).
- Valuation considers income streams, rights duration, and future cash flow projections.
Taylor Swift's Strategy
- Taylor Swift rerecording her old songs is a unique situation, legally untested.
- It's a negotiation tactic to regain control, but its impact on the original masters' value is uncertain.