Sound Recording Royalties: Gospel Catalog

Invest in royalties generated by sales and streaming of a catalog with 2,000+ traditional and inspirational gospel recordings.

$222,500

closing price

Auction Closed

Top Bid: W H

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: $155,000
Bidding Increment: $4,500
Closing Price: $222,500
End Date: Sep 30, 2019, 3:23 PM MDT
Last 12 Months' Royalties:

$46,554

Investment Term: Life of author + 70 years
Distributors:

Integra, SoundExchange and The Orchard

Rights Included:

Sales & Streaming

Interests Included:

Rightsholder

Track List:

Track List

First Distribution:

October 1, 2019

Distribution Frequency:

Monthly 

Buyer Fees:

$500

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What rights are included?

Description

This is an opportunity to collect sizable royalties generated by the sound recording copyrights from thousands of traditional and inspirational gospel songs.

As the winning bidder, you’ll earn royalties from three separate distributors (on a monthly basis) every time one of these recordings is streamed, digitally downloaded, or sold.

In the last 12 months, SoundExchange is the leading contributor with 44% of revenue. Integra is right behind with 35% of last year’s royalties and provided the majority of historic income for the asset. While The Orchard brings in the remaining 21% of this offering’s revenue, it also demonstrates the most stability over the last three years’ with rather consistent monthly earnings.

This unique catalog collects royalties in multiple ways. The income generated comes from three different sources, one of which is a unique royalty stream not correlated to radio or streaming play (see note below).

1.) Non-interactive Digital Performance Royalties:

Non-interactive digital services are very generally defined as those in which the user experience mimics a radio broadcast. So users may not choose the specific track or artist they wish to hear but are provided a pre-programmed or semi-random combination of tracks, the specific selection, and order of which remain unknown to the listener (i.e. no pre-published playlist). These royalties are currently distributed through SoundExchange from sources like Pandora, SiriusXM, iHeartRadio.com, etc.

2.) Digital Distribution Royalties:

Anytime one of these songs is streamed on-demand or digitally downloaded or sold, this catalog earns royalties. Digital distribution royalties are currently collected and paid through the Orchard from sources like iTunes, Spotify, Google Play, Amazon, etc.

3.) Physical Sales

This music is available in hundreds of Christian stores through a disc-on-demand platform, myMEDIA BurnBar, from Integra Interactive. Every time one of these recordings is sold through this platform, sound recording royalties are generated.

Key Drivers

Sound Recordings: 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.

In the last year, the majority of royalties came from streaming services. Since you’ll collect on the sound recording (label) side for this sizable collection of gospel recording, this macro industry trend of rising label streaming royalties is good news for you.

Integra Interactive Earnings. Integra Interactive adds a unique royalty that is not correlated to radio or streaming play. Historically, royalties from Integra are the largest source of earnings for this catalog, making up 54%.

Their disc-on-demand platform is an incredibly popular service for Christian music fans. Customers can explore and discover songs they would like to purchase on these kiosks, allowing them to pick tracks to burn onto a custom CD right there in the store.

You’ll notice that earnings for Integra have declined in the past few months. This is attributed to the closure of 170 LifeWay Christian Store locations that featured the myMEDIA BurnBar, which sold music from this catalog. The July 2019 sales/earnings are about what can be expected going forward. It’s also important to take into consideration that if more stores are closed, earnings from this income stream would decline.

SiriusXM Radio. You’ll notice a spike in earnings in November 2018 in the SoundExchange financials. This is due to a one-time payment in the amount of $6,994 from SiriusXM as a settlement for periods 2007 to 2017. Although this is not expected to be repeated, as the winner of this auction you are entitled to any future one-time payments like this should they occur again.

About the Royalty Distributors

Integra Interactive
Integra is one of the world's largest providers of in-store digital content burning kiosk applications. Developed in 2007 for the Christian retail store channel, myMEDIA BurnBar™ is a Disc-on-Demand platform. Integra's myMEDIA BurnBar kiosk burns all forms of content (for example, music CDs) on-demand. Nearly four million CDs and DVDs have been created. Every day hundreds of retail stores serve their customers by offering over 17,000 accompaniment track titles, 15,000 music albums, 170,000 songs, and 600 movies, music concerts, and kids’ videos.

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

The Orchard 
A pioneering music, video, and film distribution company and top-ranked Multi Channel Network operating in more than 25 global markets. This digital music distributor comprises 12% of the average earnings for the N'Vision Entertainment catalog over the past 12 months.

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