King Lil G: Five Royalty Streams + Copyrights

Five albums, five different sources of income, and ownership of both copyrights. In the last 12 months, King Lil G's back catalog has earned $148,838.

$420,000

closing price

Auction Closed

Top Bid: Ryan S

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: $10,000
Closing Price: $420,000
End Date: Jul 21, 2017, 2:12 PM MDT
Investment Term: At least 31 years
Last 12 Months' Royalties: $148,838
Royalty Type: Musical Composition & Sound Recording
First Payment: August 2017
Fees: None

Description

This is a rare chance to own both of the copyrights in a music catalog: the sound recording and the musical composition. This auction includes masters, copyrights, and royalties for a catalog of music written and recorded by King Lil G, an emerging Latin American rapper from Los Angeles.

The catalog includes five albums and earns royalties from five different sources. The owner's share of digital royalties has earned $148,838 in the last 12 months and a total of $354,650 since January 2014. And earnings are on the rise. Digital royalties increased 182% from 2014 to 2015, and 36% from 2015 to 2016.

Like the music business in general, the earnings growth for this catalog is driven by streaming. Royalties from Apple's streaming music service have out-earned iTunes downloads in each of the last six months. Spotify royalties increased from $17,585 in 2015 to $28,415 in 2016 (62% increase). And SoundExchange royalties, which come mostly from Pandora streaming, increased from $11,915 in 2015 to $33,668 in 2016 (183%).

You may notice that all of the earnings for the catalog are on the sound recording side. That's because the composition/publishing side has never been monetized. The seller owns the publishing rights in the catalog and there is a non-exclusive publishing agreement in place, but nothing has been done to license the compositions. Clearly, that leaves a huge source of untapped revenue that can be unlocked with a small amount of effort. For example, simply registering the publishing interest in the songs with ASCAP, BMI, or SESAC may uncover past royalties that have not yet been collected.

A little about the artist: King Lil G began rapping in 2010 and built a local following in Los Angeles. Without a label, he built his audience through a grassroots campaign. He signed his first record deal to distribute the five albums included in this auction. Now, he's signed to an emerging label that specializes in Latin American music. He released his first album on the new label in 2016 and the next one is scheduled for release later this year. The new label's efforts in Latin America may very well build Lil G's following even more.

Lil G is a popular force on YouTube. His top three YouTube videos, “Hopeless Boy,” “Grow Up,” and “AK47” have over 45 million views combined. Now would be a good time to mention that this auction also includes the rights to the music videos for the catalog, including royalties earned from YouTube ad revenue. Those royalties are paid through an agreement with LiveNation.

Please see the “Financials,” “Financials,” and “Media” sections for more information. Because this is a unique listing with multiple rights involved, please feel free to email questions to auctions@royaltyexchange.com.

Key Drivers

  1. You will own both the sound recording and musical composition copyrights for this catalog. That means you'll have complete control over future licensing opportunities and any new revenue sources for the music. And since the publishing side has not yet been monetized, there is significant upside for someone that can leverage the catalog.
  2. Digital and streaming royalties are growing worldwide, and this catalog is driven by digital revenue. And digital revenue is growing even faster in Latin America. In 2015, Latin American digital revenues rose 44.5%, more than four times the global average. King Lil G's popularity in the Latin American community is another potential driver for success for this catalog.
  3. Lil G is currently out on tour. He released a new album in 2016 and another one is scheduled for release this year. Often, new releases and tours correlate with an increase in revenue for an artist's back catalog. You could benefit from the new tour and release at no cost to you.

IMPORTANT NOTES

  • The winner of this auction will be bound by the recording/publishing contract with the artist for this catalog. The contract calls for 40% of all income to go to the label, and 60% to the artist (and producers). The new copyright owner will be required to make bi-annual payments for the artist's 60% share. An administration agreement is in place with Sovereign Music to account for royalties due to the artist and producers. However, the winning bidder is welcome to administer artist and producer royalties on their own. All financials presented in the listing reflect the label's 40% interest, after administration and artist payments.
  • The investment term is “at least 31 years” because U.S. copyright law gives artists and songwriters the right to terminate a copyright assignment after 35 years. The artist/songwriter assigned these copyrights to the seller in 2013 and will have the right to terminate that assignment beginning in 2048. Click here to learn more about copyright termination.

What is being sold?

100% ownership of both the sound recording and musical composition copyrights for a catalog of music written and recorded by King Lil G. The catalog includes five albums with 68 songs. You'll own the masters and music video recordings. Royalties include earnings from physical and digital sales, streaming, and synchronization. You'll also own the publishing rights, which include mechanical, sync, and public performance royalties. You can view a list of tracks in the “Downloads” tab.

On the sound recording side, sources of income from digital distribution are The Orchard and iTunes. Both are collected and paid by Select-O-Hits. Select-O-Hits also handles physical distribution. SoundExchange pays digital streaming income, and LiveNation pays YouTube income.

On the musical composition side, an agreement is in place with Sovereign Music to collect and distribute publishing royalties. But no publishing income has ever been collected for this catalog and the agreement with Sovereign is non-exclusive.

The closing process for this sale will include assignments of the contracts with Select-O-Hits, LiveNation, and Sovereign Music.

*IMPORTANT NOTE* LiveNation retains the right to deny an assignment of their contract. No competitor of LiveNation or any other multi-channel network may bid on this auction.

How does this asset make money?

As the sound recording owner, you'll receive royalties for in-store physical sales and internet downloads. You'll receive public performance royalties for internet and satellite radio streaming. You'll also earn the record label's share of sync royalties licensing in TV and film.

As the musical composition owner, you'll receive the publisher's share of public performance royalties for radio and internet streaming. You'll also earn mechanical royalties when the songs are sold or streamed. You'll earn the publisher's share of sync royalties for licensing in TV and film.

As the owner of the master music videos, you'll receive royalties earned by advertisements on the YouTube pages for those videos.

What rights are included?

  Musical Composition Sound Recording
Copyrights included? Yes Yes
Rights:
Mechanical
Public Performance
Sync
Sales
Streaming
Sync
Sources: Internet Streaming, AM/FM & Satellite Radio, Digital Downloads, CD Sales, TV/Film/Commercial Placements & Performances, etc. Internet Streaming, Satellite Radio, Digital Downloads, CD Sales, TV/Film/Commercial Placements & Performances, Samples, etc.
Distributors: LiveNation, Select-o-Hits

About the Royalty Distributors

Select-O-Hits is a premier physical and digital media distribution company encompassing online retailers, streaming audio and mobile sales. It was founded in 1960 and remains one of the most successful independent distributors in the music business.

LiveNation purchased multi-channel network INDMUSIC in 2016 to provide video monetization and administration services to artists and labels through ad sales on their YouTube channels.

SoundExchange is an independent nonprofit collective management organization that collects and distributes digital performance royalties to featured artists and copyright holders.

Sovereign Music is a music business administration company designed to provide a white label service to a wide variety of music and entertainment related companies. Sovereign was established in 2013 and has over 60 years of combined music industry experience.

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