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.
Up for bid are monthly sound recording royalties from rising hip-hop artist Max P. The Los Angeles native is best-known for his underground and new grunge style in the hip-hop genre. These earnings are generated by the digital sale and streaming of Max P.’s included albums and their associated singles.
Streaming accounts for the majority of this catalog’s revenue. The top-contributing platforms are Apple Music and Spotify. Combined, the two sources bring in an impressive 88% of last year’s income. Apple Music is the highest-earning platform — with 52% of last year’s royalties — and has the best year-over-year stability of the various income groups.
The majority of this collection’s royalties come from the hit single “Gang.” Released in 2016, “Gang” brought in 81% of last year's royalties. The track has over 4 million spins on Spotify. Interestingly, “Gang” was featured in the Golden Globe-winning Hulu series Atlanta,appearing in the third episode titled “Go For Broke”. Although this asset didn’t collect the upfront-sync fee for the song’s use, it certainly has brought awareness to Max P. as an artist.
Finally, this catalog includes other tracks from various Max P. albums, such as the 2017 release “Humble Yah Self,” and 2016’s “Elmer Fudd” and “Nightmares.”
Hip-Hop/Streaming. This catalog is a perfect example of two trends: hip-hop and streaming's growth worldwide. According to BuzzAngle's 2018 Year End Report, hip-hop is the most popular genre of music in the U.S. The driver for the increase is streaming. Hip-hop/rap tracks accounted for more than a quarter of all on-demand plays on music streaming services in the US in 2018. Streaming platforms Apple Music and Spotify are the leading income sources from this collection — accounting for 88% of last year’s income.
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, while the remaining 10-cents goes to the composition copyright.
In the last year, over 90% of royalties came from audio streaming services. This is good news for you as the investor, as this catalog earns from the sound recording copyright.
DistroKid is an independent digital music distribution service, founded in 2013. The platform principally offers musicians and other rights-holders the opportunity to distribute and sell or stream their music through online retailers such as iTunes, Spotify, Pandora, Amazon Music, Google Play Music, Tidal, Deezer, iHeartRadio and others. DistroKid distributes royalties to its artists on a monthly basis.
Public performance royalties are payments made by radio stations, hotels, restaurants, night clubs, etc. to the composition copyright holder(s) for each public performance of the copyrighted work. In the U.S., public performance royalties are typically paid to performing rights organizations (e.g., ASCAP, BMI) who then distribute the royalties to the copyright holder(s).
Mechanical royalties are royalties deriving from per-unit payments made by recording companies or digital download providers to the composition copyright holder(s) for every purchase of a sound recording that reproduces the copyrighted composition.
Non-interactive digital performance royalties are payments made by non-interactive music services (i.e. those that mimic the experience of a radio broadcast) of a statutorily-set amount (on either a per-play or annual basis—depending on the type of service) to SoundExchange for the benefit of the sound recording copyright holder and the performing artists for the right to perform the copyrighted sound recording via non-interactive, digital means.
non-interactive digital performance royalties
The royalties owed to the creator(s) of a musical composition which are paid in return for the right to reproduce, distribute, or perform the copyrighted work.
A musical composition is one of the two copyrightable parts of a recorded song. It consists of the song's music, including any accompanying words, (i.e. the portion of a song that is capable of being fully expressed as sheet music) and is separate from any particular recording of the song or its performance by any particular artist.
A sound recording is one of the two copyrightable portions of a recorded song. It results from the fixation of a series of musical, spoken, or other sounds in a tangible (at least momentarily permanent) medium.
The portion of royalties owed to the owner of a sound recording. The owner may the performing artist, the producer, or another party (such as a record label) who contractually acquired the ownership of the copyrighted work (e.g., through a recording agreement), owns it by virtue of an employer-employee relationship with the creator(s) of the work, or specially commissioned the work.
rights owner's share
The portion of royalties owed to the performers of a sound recording in return for the right to perform the copyrighted work via non-interactive, digital services (e.g., Pandora, Spotify).
The portion of royalties owed to the music publisher which are paid in return for the right to reproduce, distribute, or perform a copyrighted musical composition, arising from a contractual obligation (i.e. a publishing agreement) or employer-employee relationship with the creator of composition (i.e. the songwriter(s)).
If an asset requires splitting up a catalog by works or percentages, Royalty Exchange may need to provide royalty accounting services to the buyer, seller, or both. This is because the royalty distributor may not be able to split royalties as intended by the asset transfer. Royalty Exchange's involvement helps to ensure accurate royalty payments. It also helps assure buyers and sellers that they are not missing out on potential earnings.
The accounting process often involves manual spreadsheet work and coordinating with royalty distributors. Royalty Exchange's goal is for the accounting service to be temporary. We plan to work with distributors to find solutions that will allow us to revert accounting and payment obligations back to the distributor, removing ourselves from the process. In the meantime, we've instituted the 5% fee to help offset costs in the manual accounting.
Please see the sample accounting agreement document for reference.
Why does Royalty Exchange need to account?
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