90s Hip-Hop: Sound Recording Royalties

Collect sound recording royalties generated from a catalog highlighted by 90s hip-hop and R&B artists like M.C. Breed, Freak Nasty, DFC, Gangsta Pat, Cherrelle, and more.

$300,000

closing price

Auction Closed

Top Bid: Matthew S

The Theoretical IRR is a formulaic guideline based on an extrapolation of the normalized, historical earnings trend of the catalog. The Theoretical IRR is not a guarantee of future performance. It should be used for comparison purposes only. Each catalog has its own risk factors and the Theoretical IRR is not based upon a specific analysis of this catalog. Click here to view the basis for all Theoretical IRR calculations.

Historic royalty income is no indication of future royalty income. Future royalty income is dependent upon future sales and licensing revenue generated by the sound recordings or compositions associated with this listing.

Starting Price: $300,000
Bidding Increment: $4,000
Closing Price: $300,000
End Date: Sep 20, 2018, 1:00 PM MDT
Last 12 Months' Royalties:

$42,336

Investment Term: Life of author + 70 years
Distributors:

Tommy Boy Entertainment

Rights Included:

Sales & Streaming

Interests Included:

Rightsholder

Track List:

Track List 

First Distribution: September 30, 2018
Distribution Frequency:

Monthly

Relist-Eligible? Yes
Buyer Fees:

$500

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What rights are included?

Description

Up for bid here are the sound recording royalties generated by a catalog of 90s hip-hop and R&B singles and albums.

The highest earning recording in this collection is the popular 90s hit “Da’ Dip” from hip-hop artist Freak Nasty. The Platinum-certified song brought in 34% of income in the last year. Released in summer of 1996, the sleeper hit ultimately went on to mainstream success a year later, peaking at No. 15 on the Hot 100.

Right behind “Da’ Dip” is MC Breed and DFC’s 1991 release "Ain't No Future in Yo' Frontin'." The single brings in 26% of last year’s earnings. “Ain’t No Future in Yo’ Frontin” was the group’s most successful single off their collaborative album MC Breed & DFC, hitting No. 66 on the Billboard Hot 100. The entire album, also included, charted at No. 142 on Billboard 200.

In the last 12 months, streaming is the primary income source accounting for 80% of this catalog’s income. Sources like Spotify, Pandora and Apple Music are leading streaming contributors. From an artist standpoint, MC Breed is the leading revenue-generating contributor to this collection. Between his solo works and collaborations with DFC, Tupac, and Too Short, MC Breed’s albums and singles collectively brought in 44% of historic income.

Other artists with recordings in this collection include Gangsta Pat, R&B songstress Cherrelle, Ghetto Mafia, and many others.

Key Drivers

Sound Recording & Streaming. As we’ve come to know, streaming is booming worldwide, and record labels are seeing significant benefits as a result. According to an analysis of publicly-stated financial results by Music Business Worldwide, labels Universal, Sony and Warner jointly turned over just above $6 billion — approximately $1 billion a month — between them in the first half of 2018 on a global basis. Streaming contributed over half this total, with over $3 billion in the same period.

You can see this trend reflected in the catalog up for bid. In the last year, 80% of royalties came from streaming services alone. This is good news for you as the investor, as it follows the industry macro trend of rising label streaming royalties.

Pandora. You’ll notice a spike in earnings in November 2017. This spike is from a retroactive payment from Pandora to the record label for this catalog. Online streaming platform Pandora recently shifted from a compulsory license to a direct license with most record labels.

Because of this shift and subsequent label negotiations on rates, Pandora will now pay Tommy Boy Entertainment directly rather than these non-interactive streaming royalties being routed through SoundExchange. As the winning bidder you’ll be entitled to the payments sent to Tommy Boy for this collection of recordings.

Hip-Hop and R&B. Hip-hop/R&B overtook Rock in 2017 as the most popular genre of music in the U.S. Now, in the first half of 2018, it accounts for 31% of all music consumption. According to a Nielsen report, total consumption of Urban songs (Hip-Hop/Rap and R&B) grew by 18% in both sales and streams.

About the Royalty Distributor

Tommy Boy Entertainment is a hip-hop and electronic independent label founded in NYC in 1981. The label is credited with launching the careers of notable hip-hop legends Afrika Bambaataa, Queen Latifah, House of Pain, De La Soul, and Naughty By Nature. 

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