[ADVANCE] Fixed Return Hip-Hop + R&B
Bid to collect over $114,000 in sound recording royalties from John Gabbana, Kiya Juliet, and Rayy Dubb.
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: | $80,000 |
| Bidding Increment: | $500 |
| Closing Price: | $96,500 |
| End Date: | May 13, 2021, 3:02 PM MDT |
| Dollar Age: | 2.18 Years |
| Last 12 Months' Royalties: | $74,280 |
| Investment Term: | Fixed Return Amount (See Note Below) |
| Distributors: | Vydia |
| Rights Included: | Sales & Streaming |
| Interests Included: | Rightsholder (World) |
| Track List: | |
| First Distribution (paid 30 days from receipt): | May 15, 2021 |
| Distribution Frequency: | Monthly |
| Buyer Fees: | 1% of closing price or $500 (whichever is greater)ठ|
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What rights are included?
| Musical Composition | Sound Recording | |||||||
|---|---|---|---|---|---|---|---|---|
| Copyrights included? | — | No | ||||||
| Rights: |
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| Sources: | Internet Streaming, AM/FM & Satellite Radio, Digital Downloads, CD Sales, TV/Film/Commercial Placements & Performances, etc. | Internet Streaming, Digital Downloads, etc. | ||||||
| Distributors: | — | Vydia |
Description
Featured in this auction are monthly sales and streaming royalties from a hip-hop and R&B catalog by rising artists.
This is a fixed-return asset, meaning the winning bidder will receive monthly payments until a total amount of $114,286 is collected (“Total Return”).
HOW THIS INVESTMENT WORKS
This asset offers the right to collect royalties up to a Total Return of $114,286. With this advance-style investment, the amount of return is known upfront. The only variable is the time it takes to collect that total.
Fixed-return investments are designed for younger catalogs such as this. Knowing the total return in advance helps reduce the overall risk profile. To that effect, below are three return scenarios we created to approximate the time it may take to collect the Total Return. These scenarios were designed based on an analysis of the earnings history to date.
Return Scenario Details:
To approximate the payback period, we will look at the historical earnings for the asset to determine three possible scenarios. Please note that the Year 1 growth rates are relative to the current last 12 months' earnings of $74,280.
- Baseline: Payments decline by 3.8% per month through Year 1 of the forecast, 2.5% per month through Year 2, and 0.5% per month through Year 3, with an annualized decline of 1.5% thereafter. The Total Return would take 37 months to collect.
- Optimistic: Payments decline by 1.1% per month through Year 1 of the forecast, 2.5% per month through Year 2, and 1.4% per month through Year 3, with an annualized decline of 1.9% thereafter. The Total Return would take 25 months to collect.
- Conservative: Payments decline by 4.8% per month through Year 1 of the forecast, 1.8% per month through Year 2, and 3% per month through Year 3, with an annualized decline of 11.3% thereafter. The Total Return would take 50 months to collect.
FINANCIAL HIGHLIGHTS:
The top income source for this catalog is YouTube, accounting for 41% of earnings in the last year. You’ll note that in addition to sound recording royalties, this asset also provides ad revenue royalties from YouTube on the musical composition.
Spotify and Apple Music follow with 23% and 22% of last year’s returns respectively.
ABOUT THE CATALOG:
The highest-earning release with 23% of last year’s royalties is “Not A Sad Song” from John Gabbana. Released as a stand-alone single in May 2020, “Not A Sad Song” has over 3 million Spoitfy spins with the official YouTube video racking up over 9.4 million views to date.
Right behind is Kiya Juliet’s “How Could You Play Me” with 22% of earnings. This 2017 release grew 21% year-over-year and is Kiya’s most popular sign to date on Spotify with nearly 18 million spins.
Other notable releases include “Goin Up”—also from John Gabbana—along with “Thuggin By Ma Self” and “Voice In My Head” both performed by Rayy Dubb.
Key Drivers
Sound Recordings: Sound recording royalties benefit from streaming disproportionately more than composition-based royalties. If Spotify pays 70-cents of every dollar on music rights, 60-cents of that goes to the sound recording copyright (which the label splits with the artist based on their contract agreement), while the remaining 10-cents goes to the composition copyright.
YouTube: While not solely a music service, YouTube is the most-popular source of music streaming in the world, with more than 2 billion listeners playing music on the service every month.
Streaming Growth Worldwide. According to IFPI’S Global Music Report 2021, subscription streaming revenues for recorded music increased 18.5% over the previous year. That’s the sixth consecutive year of growth, totaling 443 million paid subscription accounts worldwide. Total streaming (including both paid subscription and advertising-supported) grew 19.9% and reached $13.4 billion, or 62.1% of total global recorded music revenues.
WHAT IS BEING SOLD?
The seller’s interest in all sound recording, video, and musical composition royalties distributed by Vydia for the sound recordings listed in the Track List noted above. This includes sound recording royalties, as well as earnings generated by YouTube video streaming and ad revenue.
HOW DO PAYMENTS WORK?
Royalty Exchange will collect and distribute the royalties to the investor on a monthly basis. The first payment will be on May 15th, 2021. Payments will continue until the investor collects $114,286 (“Total Return”). After the Total Return has been received, the rights to the royalties will revert back to the seller.
ABOUT THE ROYALTY DISTRIBUTOR
Vydia, Inc. provides an end-to-end solution to empower the next generation of music creators, managers, and labels. Their cutting-edge technology provides the digital infrastructure for audio and video distribution, content protection, rights management, advanced payments, and data tracking from one easy-to-use platform. Vydia distributes royalty payments to rightsholders on a monthly basis.