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How You Profit from Beyoncé and Bieber? (1) – Definition
Now that the Patent Litigation Financing series has concluded, we’ll follow our list and start sharing a new series! Our fans interested in Patent Litigation Financing and wanting to get involved have already started reaching out to us. If you‘d like to participate, feel free to contact us before September 15th! Perhaps because I have many hobbies and always enjoy doing interesting things, the combination of art and investment is an area I often pay attention to – by now you probably know I specialize in super alternative investment niche just like legal lending! I always think about how to combine my two passions – art and money. I finally was able to meet someone who explained part of it to me and gave me some real numbers to draw some conclusions on, so I made this series which is how you make money from stars like Bierber and Beyonce. Full Disclosure, I do have my own money into this too, and the holdings include songs from Beyoncé, Drake, and others I’m familiar with (even though I don’t really listen to this kind of music). The conclusion is that this seems to be a play of stable cash flow with a potential for going public to get capital appreciation as well. It’s also super niche, high-risk, with potentially high returns, all depends on how each song performs during its lifecycle.
In fact, there are funds dedicated to music copyrights, some of which are publicly listed entities. I did some digging, and the valuation is simply a play just like real estate – based on LTV and cap rate! Also, there are hardly any 3rd party evaluators for songs and almost all deals in the industry go to the same group of people.
In fact, I’ve found that once you (comparatively) thoroughly understand an asset class, many things are easily understood. In the next post, I’ll compare commercial real estate with music copyrights, giving you a quick and exciting deep dive. Stay tuned!