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How You Profit from Beyoncé and Bieber? (5) – Cashflow?
Continuing from the last post, as I varied my questions on how to assess a song’s cash flow, Tim went on with his high-level talk, mentioning various platforms where data can be scraped from. He explained that when a song is released, it typically sees high traffic, but within about 12 months, it usually declines, and what we buy into is the long-tail effect of income. We can acquire this income with a multiple of around 10-12 times. He mentioned previous purchases where the artist passed away, resulting in a doubling of streaming income, which turned out profitable, and so on and so forth.
I chuckled. Perhaps my skepticism showed on my face, as Tim’s son, being young and relatively straightforward, intervened when he saw his dad going on and on. He said, “Here, let me show you the data.”
Then he opened up their bank account for me to see the cash flow (which is also in the video, feel free to email me)!
I witnessed with my own eyes the dividends coming into their account each month from the songs, including the one from the deceased artist, which matched what he had told me, and the sources were clear. Of course, there were also other songs’ dividends coming in.
I asked, “So, you check the traffic on various platforms, estimate the existing cash flow, apply a discount (since it’s the long tail), and then value it at 10-12 times?”
They essentially confirmed this.
I then asked, “How do you prove ownership of the copyright? Like with real estate, you can check property rights. Are there centralized systems to query copyright ownership?”
We’ll reveal the answer in the next post!