Music Royalty Offering Analysis: Case Study #2

As always this blog is meant for entertainment. I'm not a financial advisor in any way, shape or form. Anything I suggest here will need your own due diligence!


I thought it was time to analyze another music royalty offering, much like I did here. This time I'm going to dig into an offering from SongVest. The offering I'm going to analyze is "HBK Gang - Gang Forever Album". This is a catalog that just recently went available via SongVest.




In case you're not familiar with SongVest, they are fairly new to the marketplace. However the founder of SongVest (Sean Peace) was the original founder of Royalty Exchange, so he knows a thing or two about the industry.


They have 2 primary types of offerings:

  • "Auctions" allow you to bid on a full catalog

  • "On Sale Now" allows you to buy shares of a catalog at a set price.


I'll do a follow up post about SongVest at some point to go a bit deeper - until then you can learn more via this video.


The Offering

Okay, so the "HBK Gang - Gang Forever Album" offering highlights are as follows:

  • 797 shares available at $250 per share

  • Last 12 Months revenue: $10,909, or $13.68 / share.

  • Types of Royalty Rights: Streaming & Mechanical

  • Term: Life of Rights

  • Songs in Catalog: 17

  • Highest Earning Song since 2018: Never Goin' Broke ($32,700)


Now let's dig a bit deeper...


(please note that the visuals below are directly from the SongVest offering page)






Earnings Over Time (since 2018)


Really stable earnings over this time! This tends to happen with a catalog that has been around for 5+ years. I like to see stability like this, gives me added confidence in what's to come (ie - hopefully more of the same).




Earnings by Song

It looks like this artist has a hit song out of the bunch that carries most of the load (appropriately titled "Never Going Broke"). Almost 75% of the revenue from this catalog has come from that one song.



I'm happy that there's at least 1 big hit here. My assumption is that at a minimum this song is on a lot of people's streaming playlists. Everytime they stream it, a tiny fraction of a fraction of a penny gets earned by us investors! Cha-ching!


Earnings by Source

The vast majority of revenues over the last few years have been earned via Audio Streams (77%).

This is not a surprise at all as streaming tends to be a largest form of revenue for a catalog of this age.





My Conclusion

This catalog looks appealing to me. I like the consistency of the revenue over the last few years, I like the age of the catalog (9 years) and I like the source of the revenue (streams). The multiple on this isn't awesome coming in at 18x, you can get much better if you make a larger investing in a full catalog, but it's still in the range of what to expect with these smaller investment options (the range I've normally see have been 7x to 20x).


FWIW I've already made an investment in this catalog, so I apparently saw something I liked (again, not investment advice!).


 

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As always this blog is meant for entertainment. I'm not a financial advisor in any way, shape or form. Anything I suggest here will need your own due diligence.


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