REO Speedwagon’s 10x Platinum “Hi Infidelity”

This is a rare opportunity to earn royalties from a landmark rock album — REO Speedwagon’s Hi Infidelity.

$179,500

closing price

Auction Closed

Top Bid: kyle t

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: $100,000
Bidding Increment: $750
Closing Price: $179,500
End Date: Jun 29, 2020, 3:00 PM MDT
Dollar Age: 39.44 Years
Last 12 Months' Royalties: $14,500
Investment Term: Life of author + 70 years
Distributors: Sony Music Entertainment
Rights Included:

Sales, Streaming, Sync

Interests Included:

Producer (World)

Track List:

Track List

First Distribution (paid 30 days from receipt): September 30, 2020
Distribution Frequency: Biannually
Buyer Fees:

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What rights are included?

  Musical Composition Sound Recording
Copyrights included? No
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, Samples, etc.
Distributors: Sony Music Entertainment

Description

It’s not often we have listings like this on the platform, so take note. This is your chance to own a piece of rock history and earn royalties alongside a legendary rock group with hits that continue to resonate nearly 40 years after their release. 

This offering features sound recording royalties generated by the Diamond-certified (10x Platinum) album Hi Infidelity from REO Speedwagon. Released in 1980, Hi Infidelity sold more than 10 million copies worldwide and spawned four U.S. Top-40 hits, including one of the best-known power ballads of all time—“Keep On Loving You”—all of which are included in this catalog.

Two other REO Speedwagon albums are also included: Nine Lives and Good Trouble. All three were produced and engineered by longtime REO Speedwagon collaborator Kevin Beamish. The winning bidder will collect his producer royalties, generated from any sales, streaming, and sync activity for any of the albums and their individual tracks. It’s worth noting that sales and streaming in particular pay sound recording royalties at a higher rate than to composition royalties. 

LISTING HIGHLIGHTS: 

  • Valuable sound recording royalties from an era-defining band
  • Impressive streaming activity with year-over-year growth
  • Established 39-year-old catalog from an iconic band with continued relevancy
  • Life of Rights investment term

FINANCIAL HIGHLIGHTS:

Overall royalties generated by this catalog grew year-over-year for the last three, nearly 40 years after its original release. 

Four of the five top-earning songs grew by double digits in the last year. The top-earning song — “Keep On Loving You” — accounts for 47% of last year’s returns, an increase of 56% over the prior year. The next best-earning song — “Take It On The Run — grew by 96% in the last year. Both show how timeless classics can achieve near-immortality on streaming platforms. 

Speaking of streaming, it is the top royalty generating format for this catalog. Subscription streaming generated 60% of the catalog’s last 12 months earnings and grew 36% in the last 12 months. Ad-supported streaming also grew in the same timeframe, by 28%. The inherent streaming growth is something to take note of as it's aligned with industry trends. 

Also worth mentioning are the sync placements the catalog landed last year. While sync licensing income can be sporadic at best, it’s worth noting the continued relevancy of the tracks included in this catalog. The two top-earning songs — “Keep On Loving You” and “Take It On the Run” — were licensed for a few TV series/trailers: The Goldbergs (ABC), On Becoming A God In Central Florida (Showtime), Cobra Kai (YouTube), and Young Sheldon (CBS). 

ABOUT THE CATALOG: 

Originally formed in 1967, REO Speedwagon has sold more than 40 million records worldwide, produced 13 Top-40 singles, and recently earned the coveted RIAA Diamond-status certification (10x Platinum) for their most commercially successful album to date: Hi Infidelity

The rare Diamond certification is given to albums that sold 10 million copies in the U.S. Only 161 albums have ever achieved this honor. Global sales for Hi Infidelity are estimated to be close to 20 million. The fact that the album reached its Diamond certification in late 2017, 37 years after its initial release, speaks to its enduring legacy. Released in November 1980, Hi Infidelity was a huge hit in the U.S., peaking at No. 1 on the Billboard 200 and was named the biggest selling rock album of 1981

The top-earning track is "Keep On Loving You" with 47% of last year’s returns. The Platinum-certified single was the band’s first to break the top 50 on the Billboard Hot 100, eventually snagging the No. 1 spot for one week in March 1981. The power ballad continues to receive regular radio airplay, and is often included in 80s rock compilations and playlists, not to mention several REO Speedwagon greatest hits albums. To date, the song has nearly 129 million streams on Spotify. 

Right behind is "Take It on the Run" with 39% of the catalog’s earnings. Also off Hi Infidelity, the track reached No. 5 on the Billboard Hot 100, and was certified Gold. 

This collection also features REO’s 1979 album Nine Lives along with the double-Platinum 1982 album Good Trouble

Today, five decades after the group’s founding, REO Speedwagon remains relevant and is a popular live act. For example, the band appeared in an episode in the third season of the American TV series Ozark. After it aired, four of of the band’s songs reentered the Billboard rock charts — notably "Keep On Loving You" at No. 10, and "Take It On The Run" at No. 16. The band's 1988 compilation album The Hits, which includes both tracks, also entered re-entered Billboard's Top Rock Albums chart at No. 49. Many of the tracks are also included in the band’s Decade of Rock double album compilation.

As the winning bidder, you will earn from the inclusion of these tracks on these and any future compilation albums, playlists, and other uses. 

The imminent 40th anniversary of Hi Infidelity includes anniversary re-releases, a (now postponed) tour, press, and other activity that stands to help drive sales and streams as well. 

Key Drivers

Dollar Age. This catalog has a Dollar Age of 39.44  years. This means the majority of royalties earned in the last 12 months came from songs that have collected royalties for nearly 40 years. A high Dollar Age like this suggests stability and longevity.

A catalog containing mature works with consistent (and even growing earnings) is something worth noting as an investor. This can help sustain a catalog's earnings moving forward.

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.

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 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, 65% of last year’s royalties came from subscription and ad-supported streaming services, and those earnings have increased 35%. This is good news for you as the investor, as it follows the industry macro trend of rising streaming royalties for labels.

Multiple Income Streams. The winner of this auction can receive royalties from various streams:

  • Sales: 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: Royalties paid to artists and producers when a recording is streamed “on-demand” (like Spotify or Apple Music for example).
     
  • Synchronization: Royalties paid to artists and producers for the licensing of a recording in music for a movie, TV show, or commercial.

WHAT IS BEING SOLD?

The Seller's interest in all sound recording royalties (except for non-interactive digital performance royalties distributed by SoundExchange) attributable to the sound recordings listed in the Track List noted above. 

About the Royalty Distributor

Sony Music Entertainment is a global recorded music company with a current roster that includes a broad array of local artists and international superstars. It is home to premier record labels representing music from every genre, including Arista Records, Columbia Records, Epic Records, Essential Records, RCA Records, and Sony Classical, among many others. Sony Music Entertainment is a wholly owned subsidiary of Sony Corporation of America. Payments are disbursed by Sony Music Entertainment bi-annually. 

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