Music royalties

Several income streams, often owned separately

A recorded song generates money through distinct rights that are frequently in different hands:

• Publishing — the composition itself, split between the songwriter's share and the publisher's share.
• Master recording — the specific recording, usually owned by a label.
• Performance royalties — collected when music is played publicly or broadcast, through collecting societies such as PRS and PPL in the UK.
• Mechanical royalties — from reproduction, including streaming.
• Synchronisation — negotiated fees for use in film, television and advertising, which are lumpy and can be large.

Buying "a song's royalties" means buying some defined subset of these. The distinction determines both the income and the control.

Why institutional money arrived

Streaming turned music from a declining physical-sales business into a growing subscription business with predictable, granular, monthly reporting. That transformed catalogue income from a depreciating curiosity into something resembling an inflation-resistant bond with equity-like upside from sync placements.

Through 2019–2022 that logic drove a wave of catalogue acquisitions at high multiples — often 15–20 times annual income for established catalogues, sometimes considerably more for marquee names. Rising interest rates subsequently compressed those multiples, since the asset is valued exactly like any other long-duration income stream.

Decay curves

Most songs decline in earnings after release, sharply at first and then more slowly. Catalogues older than roughly five years are considered to have reached a stable base, which is why buyers prefer them — the decay is largely done and the remaining income is more predictable.

But catalogue income is not flat. A song's earnings can multiply on a sync placement, a TikTok trend or a film soundtrack, as Kate Bush's Running Up That Hill demonstrated after Stranger Things. That optionality is part of what buyers pay for.

Retail access

Platforms offering fractional royalty shares to individuals have appeared, with mixed results — one prominent example listed on the LSE, traded at a substantial discount, and faced difficulties. Others operate as auction marketplaces for small royalty slices. Fees, valuation opacity and the absence of a secondary market are the recurring problems.

How you would actually trade it

Institutional acquisition requires diligence on the chain of title, which is where most problems appear: unclear songwriter splits, unresolved sample clearances, reversion rights that return ownership to the artist after a period, and existing administration agreements that bind the buyer.

For individuals, listed music royalty funds give diversified exposure with daily liquidity, though they have traded at wide discounts to reported NAV — which may reflect the market's view that the NAVs use optimistic discount rates.

Understand what proportion of income is from streaming versus performance versus sync, because they have very different growth and volatility characteristics.

This entry describes how a market works. It is not a recommendation, a price forecast, or advice about whether this belongs anywhere near your money. How entries are written.