Adventure Club: EDM Publishing & Sound Recording

Place a bid on this Life of Rights asset featuring a mix of publishing income and sound recording royalties generated by the popular EDM duo Adventure Club.

$363,000

closing price

Auction Closed

Top Bid: Holdings C

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: $350,000
Bidding Increment: $13,000
Closing Price: $363,000
End Date: Dec 09, 2019, 3:00 PM MST
Dollar Age:

3.91 Years

Last 12 Months' Royalties: $132,559
Investment Term: Life of author + 70 years
Distributors: BMG
Rights Included:

Mechanical, Public Performance, Sales, Streaming, Sync 

Interests Included:

Artist and Songwriter/Co-publisher 

Track List:

Track List

First Distribution: (paid 30 days from receipt):

March 31, 2020

Distribution Frequency: Biannually
Buyer Fees:

$500

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What rights are included?

Description

We recently sold the songwriter’s share of public performance for this EDM catalog featuring Adventure Club. That auction proved to be very popular — you can view that listing here.

Now up for bid are both the artist (sound recording) and publishing royalties generated by the same collection of tracks from Adventure Club. As the winning bidder, you’ll have the rare opportunity to earn from both the musical composition and sound recording for the lifetime of the copyright.

In the last 12 months, the sound recording income brought 88% of total revenue, with the publishing earnings accounting for the remaining 12%. On the publishing side, mechanical royalties were the top source with 49% of last year’s profits. Notably, sync royalties saw a significant increase as a result of a placement of the song “Limitless.”

Looking at the sound recording income, web/digital — earnings from streaming and digital downloads — is the leading contributor with over 98% of last year’s earnings. These royalties are driven by Spotify and Apple (iTunes and Apple Music), combined the two platforms account for 73% of profits in the last 12 months.

A compelling feature for this catalog is its income distribution amongst the songs. The single highest-earning track is “Limitless” accounting for just 15% of last year’s revenue from both royalty streams. This means the catalog’s earnings are not tied to the success of a single track and provides built-in diversification.

Released in 2016 on Adventure Club’s second studio album Red // Blue, “Limitless” features Delaney Jane. To date, the single has over 14 million spins on Spotify. From the band’s debut 2013 album are “Gold” featuring Yuna and “Wonder” — combined they brought in 27% of last year’s income. Not to be overlooked is “Crash 2.0,” the group’s most-streamed song on Spotify and “Firestorm” with frequent collaborator Sara Diamond.

Key Drivers

Sound Recordings & Record Labels: Sound recording royalties benefit disproportionately more from streaming 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.

Record labels see significant benefits as a result. According to an analysis of publicly-stated financial results by Music Business Worldwide, labels Universal, Sony and Warner Music Group jointly turned over just over $6.93 billion globally last year from streaming income alone.

You can see this trend reflected in the catalog up for bid. In the last year, 98% of sound recording royalties came from streaming services, with Spotify as the leading platform. This is good news for you as the investor, as it follows the industry macro trend of rising label streaming royalties paid by BMG label.

What’s also unique about this listing is that as the winning bidder, you’ll also collect the streaming mechanicals on the musical composition side for the included works. You will get paid twice for the stream of a single song!

Multiple Income Streams. The winner of this auction will receive royalties from various streams, generated by both the musical composition, as well as sound recording (actual recording of the music). It is rather unique to earn from both sides of the copyright. These income streams include:

  • Public Performance (Musical Composition): Royalties paid to songwriters when music is performed publicly. Music played over the radio, in a restaurant or bar, or over a service like Spotify or Pandora is considered a public performance.

  • Mechanical (Musical Composition): Royalties paid to songwriters and publishers when music is sold (think CD or vinyl) but also when music is streamed (streaming mechanicals) “on-demand” (like Spotify).

  • Sales (Sound Recording): Royalties paid to artists and producers when a recording is sold, which can be downloaded (on a platform like iTunes), as well as physical copies being sold (such as a C.D.).

  • Streaming (Sound Recording): Royalties paid to artists and producers when a recording is streamed "on­ demand" (like Spotify for example) as well as non-interactive streaming (Pandora).

  • Synchronization (Musical Composition and Sound Recording): Royalties paid to songwriters, publishers, artists, and producers for the licensing of a recording in music for a movie, TV show, or commercial.

Dollar Age. This collection of songs has a Dollar Age of 3.91. In this case specifically, the Dollar Age demonstrates a diverse income mix between new(er) releases and more mature works. A catalog containing mature works with consistency is something worth noting as an investor. This can help sustain a catalog's earnings moving forward.

New Release. Adventure Club just released a new two-track album The Death Or Glory Sessions on October 18th, 2019. While the new songs are not included in this auction, new releases can help boost an artist's back catalog. The release of new music draws discovery among first-time listeners and re-engages existing fans.

About the Royalty Distributor

BMG Rights Management GmbH is an international music company focused on the management of music publishing, recording rights and music distribution. The company's head office is in Berlin, and it operates regional offices in New York, Nashville, Los Angeles, London, Madrid, Paris, Stockholm, Hilversum, Milan, Beijing, Toronto, Sydney, and São Paulo. BMG is the youngest and fourth-largest major international company in the music industry, with over 2.5 million compositions and recordings in its library.

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