How Streaming and Royalties are shaping growth and investment in the global Music Industry

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The music industry has seen tremendous growth in the past few years. This growth has been attributed to technology and other modern methods. According to a MIDiA report in the UK in March 2021, the music industry was valued at $23.1 billion in 2020. This data came after the rediscovery of the market by blue-chip financers.

How significant are streaming revenues to the recording market?

A 7% growth rate was recorded, and annual revenue of $1.5 billion. This rate was lower than the recorded rate (11%) of 2018 and 2019. Streaming revenues were primarily responsible for the growth. A revenue increase of $2.3 billion was recorded from the previous revenue. That is a growth rate of 19.6%.

The importance of streaming to the industry cannot be over-emphasized as the recorded data and revenue concerning streaming continue to rise.

According to data from statista.com, the number of people who stream music rose from 425.6 million to 626.2 million between 2019 and 2021. That was a growth of 32.1% in two years. The users are expected to amount to $900 million in 2025.

A 50% increase in post-pandemic streaming revenues was predicted in 2021 by BuyShares. The revenue was expected to amount to $23 billion by the end of 2021.

The music industry recovered strongly from the covid-19 pandemic, and the growth can be attributed directly to streaming. Data has shown that streaming is the powerhouse of the global music industry.

These developments will continue to wax stronger. More improvements are expected to come.

Music Royalties investment and growth

Music royalties are fascinating assets. They are payments made to right holders made to use their music. These royalties could be streaming royalties, public performance royalties, neighboring rights, digital performance royalties, mechanical royalties, and sync licensing fees. 

Investors have carefully studied and examined music publisher catalogs and how the values of these assets have performed over the past few years. It has been predicted that investment banks will make a great deal of income for the number of streaming subscribers during the next ten years.

Investing in music royalties has its advantages. It provides good relative yields and recurring income; it is stable and is not affected by unstable economic conditions.

Hipgnosis, set up by Merck Mercuriadis in 2016, and Round Hill Music Royalty funds launched in 2020 are two popular investment funds that offer access to song royalties.

About 57,000 songs and 117 catalogs were bought by Hipgnosis. This was made possible via fundraising. Round Hill Music Royalty Fund bought 128,000 of many diverse artists. Round Hill has an annual return target of about 11% and a slightly higher yield (4.50%) than Hypgnosis (4.17%).

The music industry has evolved over the past years. New methods and processes have greatly influenced revenue generation and the acquisition of assets. Streaming and Music royalties are some of these processes, and they hold a great deal of expectation for the future of the industry.

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