u/Alternative-Mode-365

The music industry's own research says a small slice of listeners drives a wildly outsized share of revenue. These are the people who buy the vinyl variant they already own digitally, pay for VIP packages, fly to shows, and keep a mid-size artist's career alive between albums. Goldman sized superfan spending as a multi-billion dollar annual opportunity, which is a polite way of saying these people are the margin.

And look at how they get treated for it. Dynamic ticket pricing exists specifically to extract the maximum from whoever wants it most, which by definition is the superfan. Presales are a data harvesting exercise dressed up as a perk. VIP packages sell a photo and early entry for ten times face value. Merch drops run on artificial scarcity. The fan who streams an album 400 times pays the same subscription fee as someone who heard it once, and the artist sees a fraction of a cent either way. Every mechanism in the modern industry is built to identify who loves something the most and then charge them for the intensity of it.

Casual listeners get the radio, the algorithm, and cheap access to everything. The people subsidizing the whole machine get surge pricing.

What might change my view: evidence that casuals actually matter more in aggregate than concentrated superfan spend, or an argument that the perks superfans get are real value rather than repackaged extraction, or examples of the industry meaningfully rewarding its heaviest spenders anywhere at scale.

Springsteen sold his catalog at ~33x annual royalty income. Dylan and Queen went for nine and ten figures. Published guidance says a normal catalog is worth 10-15x its yearly earnings.

Now the other end of the same market. An independent artist's catalog earning $150K/yr in verified royalties gets offered 4.7-6.5x. Below roughly $100K/yr, it gets offered nothing. Not a bad price - no price. Zero bids for a cash-flowing asset with years of statements behind it.

Here's the mechanics. Legal and diligence on a catalog deal cost about the same whether the catalog earns $200K or $2M - chain of title, statement verification, rights review, all bespoke, all lawyers. On a big deal that's a rounding error. On a small one it eats the entire economics, so institutional buyers don't even respond. The result is a market where a dollar of famous royalties costs 33 dollars and a dollar of unfamous royalties costs 5 or can't be sold at all.

For buyers the math is upside down from what you'd expect. Buying Springsteen at 33x is a ~3% yield. Buying an indie catalog at 4.7x is ~21%, decaying, and funds happily take those deals whenever the catalog clears the size floor. The excess yield isn't compensation for risk. It's compensation for the seller having exactly one bidder.

I keep coming back to how rare this shape is. Cash-flowing assets with verifiable statements that structurally cannot trade below a size threshold. Bonds trade. Distressed real estate trades. Lawsuit settlements trade. Music under $100K/yr just... doesn't.

Genuine question for this sub: what other asset classes have this exact structure, real cash flow locked out of any market by fixed transaction costs? And historically, when someone standardized the transaction (think MBS in the 70s, or fractional real estate), did the spread actually close or did the middlemen just capture it?

The Taylor saga got years of coverage. Fans organized, re-recorded albums charted, it became a whole movement about artists owning their work.

Meanwhile, quietly, in the same decade: Springsteen sold for ~$500M. Dylan ~$300-400M. Queen's catalog went for around a billion. And below the headlines, funds have been working down the ladder buying indie catalogs by the hundreds - except indie artists don't get Springsteen's ~33x their yearly royalties. They get offered 4.7-6.5x. Same asset class, fraction of the price, because the multiple tracks fame, not cash flow.

So the music you love increasingly pays out to a portfolio spreadsheet, the artists who made it got a fraction of what it was worth, and the fans who built the value got nothing and were never asked.

Here's the part I can't get past: fans were the whole engine of the Taylor thing. Fans made the re-records win. And yet there's no version of this where fans get to be the buyer. If your favorite band could sell 10% of their catalog to their actual audience instead of a fund lowballing them - would you buy in, or does mixing money and fandom ruin it?

Everyone here knows the royalty pitch. Springsteen sold his catalog for ~$500M, roughly 33x annual earnings. Goldman projects music revenue nearly doubling by 2035. People stream in recessions. Uncorrelated, durable, boring in the best way.

So why can't you actually buy any?

I went down this rabbit hole hard, and here's what the market actually looks like:

• The good catalogs go to funds. Hipgnosis-style vehicles buy at 10-15x annual earnings with institutional checks. You're not in that room.

• The retail platforms list scraps. The songs that make it to retail are a handful of famous tracks priced so the yield is already squeezed out before you show up.

• The real supply is locked out entirely. There are tens of thousands of independent artists earning $100K-500K/yr in royalties with NO buyer at any price. Diligence and legal cost the same on a $200K catalog as a $2M one, so no fund touches the small end. When those artists do sell, they get 4.7-6.5x annual earnings against published guidance of 10-15x.

That last bullet is the actual story. The supply that would give normal investors real yield at a sane price isn't scarce. It's locked behind transaction costs.

Full disclosure: I'm building in this space - a regulated marketplace where independent artists sell royalty shares directly to their fans (Reg CF, shares from $50, quarterly distributions, bankruptcy-remote SPV so you get paid even if the platform dies). So yes, I have a horse in this race. Not linking anything.

I'm posting because this sub evaluates yield-per-hassle better than anywhere on the internet, and I want the skeptical take:

If you could buy a slice of an independent artist's catalog at a fair multiple - verified royalty statements, regulated broker-dealer in the middle - what stops you? Yield too uncertain? Don't trust music as an asset? Only want artists you've heard of?

Roast away.

I'm building a stock market for music royalties. Independent artists sell fractional shares of their catalogs to their own fans, on regulated rails. Incorporating this week, broker-dealer and transfer agent already priced, raising now.

Last week I asked a 44,000-member songwriter community one question: what would actually stop you from selling a piece of your royalties to your fans?

30+ comments of getting absolutely worked over later, here's the intel.

The objections I expected: fees, broke fans, legal complexity.

The objections I actually got:

1. "Why would I even do this?" The top comment. Nobody wakes up wanting to securitize their songs. They wake up the day a fund emails them offering 4.7x their annual royalties for their life's work while Springsteen's catalog cleared ~33x. The trigger isn't ambition, it's the lowball.

2. "I'd lose my masters." Flat wrong, and the most repeated. Selling a royalty slice isn't selling copyright, the same way selling a bond isn't selling the company. When the most informed music community on the internet believes this, the education gap isn't an obstacle. It's the moat.

3. "My fans wanting my music isn't my fans needing to own it." The sharpest one in the thread. The venn diagram of "supports you" and "wants an investment" is not a circle. Correct. It also only needs to be 1-2% of monthly listeners to fill a raise.

4. "Asking fans for money feels like begging." Buried under everything else, this is the real one. Kickstarter feels like begging because it is - money flows one way. Ownership flips the direction: not "support me," but "invest in me." That reframe turned out to be the entire product.

5. "Only artists with bad catalogs would sell." Adverse selection, the smartest finance objection in a songwriting forum. The answer is listing standards: minimum trailing royalties, verified statements, clean rights. The stock market solved this exact problem in 1934.

The meta-lesson: every single objection attacked the premise. Not one attacked the mechanics. Nobody said "your fee is too high." They said "I don't believe the overlap exists." That's not a pricing problem, that's a category-creation problem - and category-creation problems are the ones worth working on.

The mods removed the post for "market research." Kept answering in the comments anyway. Worth it.

One more thing it confirmed: the artists this is actually for - $100K+/yr catalogs - aren't in Reddit forums. They have agents and managers. Which told me exactly where the sales motion lives, and that's where this week went.

Building in public. Ask me anything.

Not selling anything, no link, just want honest answers.

Say you could sell 15% of your catalog's royalty stream directly to your listeners. You keep the masters, keep the publishing, keep control. They get paid quarterly when the songs get streamed, same as you do.

What is the thing that makes you say no.

I've heard "my fans are broke," "it feels like begging," and "what if the platform disappears." Curious what I'm missing, especially from anyone who has actually looked at selling to a fund or taking an advance and walked away.

Disclosure so nobody feels tricked: I'm building in this space. Genuinely just want the objections.

Context: I'm building a regulated marketplace where independent musicians sell fractional shares of their song catalogs to their own fans. Been at it a few months. Sharing the market research because the finding generalizes well beyond music.

The problem I went looking for:

Music catalogs are a real asset class now. Institutions buy them like bonds. Springsteen sold to Sony for around $500M on roughly $15M in annual earnings, call it 33x. Published valuation guidance says catalogs trade at 10-15x annual royalties.

Then I started talking to actual independent artists who'd been through a sale process. Every single one was offered 4x or less.

That gap bugged me for weeks. Here's what it turned out to be.

Third-party valuation data confirms the small end really does clear lower. Catalogs aged 6 months to 2 years go for 4.7-6.5x trailing-12-month net revenue. Two to five years old, 6.9-8.6x. Nowhere near the headline.

But the reason isn't quality... it's fixed cost.

Legal review, accounting, chain-of-title verification. That work costs roughly the same on a $200K catalog as it does on a $2M one. Somewhere around $100-150K in annual earnings, the diligence expense eats the entire return for a buyer. So the buyer pool doesn't shrink gradually. It empties.

An artist with clean rights, ten years of listening history and real recurring income can be structurally unsellable. Not because the asset is bad. Because the transaction is too small to be worth anyone's time.

Why I think this generalizes:

Any market where transaction costs don't scale down has a floor like this. Below it, supply exists, demand exists, and no deal happens. Small commercial real estate. Regional franchise resale. Niche B2B acquisitions. Same shape.

Two ways to attack it. Drive the diligence cost down through standardization, or find a buyer with a non-financial reason to pay a fair price.

I'm doing the second one. For a musician, the buyer nobody prices is their own audience. A fan buying a slice of a catalog isn't running a spreadsheet against alternatives, they're buying a stake in something they already care about. One artist I talked to closed at 7-8x instead of 4x purely because the buyer was a label he'd known for years. The relationship was worth three or four turns of multiple. Fans are a much larger relationship than that, and nobody has ever priced it.

Where I actually am:

Incorporating this month. Broker-dealer terms quoted, transaction rails quoted, Reg CF structure mapped with named vendors, all before raising anything. Site and a catalog valuation calculator are live. First artist conversations happening now. No revenue yet, no signed artists yet. That's the honest state.

Happy to answer anything about the regulated side, it's the part most people underestimate. Getting the compliance stack priced before writing a line of product code was the single best decision I've made.

Site is encoremarkets(dot)us if you want to see it, and we post the research as we go on our LinkedIn page under Encore Markets.

Been digging into music royalties as an income asset. The published numbers and the real ones are pretty far apart, so here's what I found.

Every valuation guide says catalogs trade at 10-14x annual royalties. The offers actually hitting independent artists are 4x or less.

What drives the gap:

Size. Under roughly $100-150K in annual earnings, diligence costs eat the deal. Legal, accounting and chain-of-title work costs about the same on a $200K catalog as a $2M one, so the buyer pool thins out to almost nothing below that line. It's a structural discount, not a quality one.

Type. Anything exposed to AI substitution or one-off consumption (production libraries, mood music, radio-dependent catalogs) trades in the single digits. Diversified catalogs by known artists with owned copyright still hit low double digits.

Where deals die. Usually not bad accounting. It's undisclosed stuff: liens, an active divorce, third-party royalty obligations, copyright disputes, or earnings moving mid-diligence and repricing the deal.

On the income itself: it's recurring and uncorrelated to equities, which is why institutional money moved in. Rule of thumb I keep hearing is 5-7 years post-release before royalties stabilize enough to underwrite confidently.

Disclosure: I'm building in this space so I have a horse in the race. Not selling anything here, no links. If anyone has actually bought royalty interests, I'd like to hear what you paid and what it's yielded.

I've been collecting real numbers on what independent catalogs actually sell for, because the published guidance and the actual offers don't match.

Every valuation guide says 10-14x annual royalties. Every independent artist I've talked to who went through a sale process got offered 4x or less.

From people who do this for a living, the gap comes down to a few things:

Size. Under roughly $100-150K in annual earnings, diligence costs eat the deal. The buyer pool thins out to almost nothing. It's not that the asset is worse, it's that nobody wants to spend real legal and accounting money on a small purchase.

Type. Anything exposed to AI substitution or one-off consumption (production libraries, mood music, radio-dependent catalogs) trades in the single digits. Diversified catalogs by known artists with owned copyright can still hit low double digits.

Relationships. One artist I talked to was mid-deal. Every buyer offered 4x or under. He closed at 7-8x, but only because the buyer was a label he'd known for years. Same songs, same statements. The relationship nearly doubled the price.

That last one is what I keep coming back to. If knowing the buyer is worth three or four turns of multiple, then the biggest relationship most artists have is with their fans, and nobody prices that at all.

Disclosure: I'm building in this space so I have a horse in the race. Not selling anything here, just trying to get the numbers right. If you've been through a catalog sale and your multiple looked different, I want to hear it.

What it is

Music royalties are a real, cash-flowing asset. A song earns every month, forever, whether or not the artist ever tours again. Right now the only people who can buy that income are institutions - the Hipgnosis-style funds that spent the last decade buying up catalogs.

Artists get one option: sell to a fund, usually permanently, usually at a discount. And the people who actually made those songs valuable, the fans streaming them daily, have no way to own any of it.

I'm building the third option. Artists sell a slice of their royalty stream directly to their fans. Fans buy fractional shares and earn from the streams.

Why I think this works

The fan is a better buyer than the fund. A fund wants to extract maximum value and exit. A fan wants the artist to keep making music, because their return depends on it. Every share sold turns a passive listener into someone with an actual stake in the next release.

It also solves distribution for the artist. You're not pitching strangers, you're offering something to people who already follow you.

How promoting it has actually gone (the honest part)

Reddit has been my best channel by a mile, but only when I'm not selling. Discussion-framed posts with the disclosure at the bottom do fine. Anything that reads like an ad gets removed. I got posts killed in several musician subs for exactly that.

LinkedIn company page: launch post did around 360 impressions off 6 followers. Small numbers, but the impressions-per-follower ratio was way better than I expected.

Instagram and X: just launched both. Too early to say anything useful.

Email to the waitlist: I asked everyone which specific artist they'd want to see on the platform. Best decision so far. It turns a dead signup list into a conversation and tells me exactly who to go sign.

Cold DMing artists: low volume, slow, but the highest-quality responses of anything I've done.

Waitlist is still small (under 20). I'd rather say that than pretend.

What I'm still figuring out

The chicken-and-egg problem. Fans won't show up without artists, artists won't sign without an audience. My current bet is going narrow: one artist with a genuinely devoted fanbase beats ten with big passive numbers. Not sure that's right yet.

If you've done marketplace cold-start or built anything in music, I'd take any pushback on that.

posted here about a week ago comparing the platforms letting you buy fractional shares of music royalties (SongVest, ANote, Royalty Exchange, JKBX). good discussion, some fair pushback, so wanted to follow up on a couple things.

biggest question from that thread was solvency risk, basically "what happens to my income if the platform goes under." fair question given what happened in the sports card fractional investing world. short answer: the royalty interest needs to sit in a bankruptcy remote SPV, a separate legal entity from the operator, with a transfer agent or third party escrow that keeps paying you even if the company folds. doesn't make platform risk zero, nothing does, but if a platform holds the asset itself and runs your money through its own operating account instead of a segregated structure, that's the red flag to walk away from.

second thing, and this is the actual update: JKBX just wound down. that's two of the "buy a piece of a famous song, no connection to the artist" platforms gone in about two years (Royal in 2024, now JKBX). the top down model keeps hitting the same wall, people buy a sliver of a song once because it's a novelty, then don't come back, there's no reason to.

been chewing on why, and it lines up with a conversation i had recently with an artist who's actually mid catalog sale right now, signed papers on a third of one of his catalogs this week. his math: a fund is paying him roughly 10 years of income today, priced on the assumption the catalog declines over that window. rational deal if a cold DCF from a fund is your only buyer. the part he doesn't like is no buyback once it's sold, and he'd thought before about wanting something like a loan against the catalog instead so he keeps the option to buy it back.

that's basically the bet on the bottom up side. fans who'd stream the artist anyway funding a piece of the catalog directly, at a price that isn't just a cold spreadsheet, with the artist able to design in a buyback from day one. doesn't answer every concern people raised in the last thread, but two top down platforms dying in two years is about as clear a signal as you'll get that "sell slivers of famous songs to strangers with no connection to the music" isn't the durable model.

same disclosure as last time, i'm building one of the bottom up platforms (encoremarkets.us). not shilling, no link needed, just sharing what i'm seeing and happy to keep answering questions on how the structure actually works.

Posted here a week ago asking how artists think about catalog value/ownership. Got some great pushback (and some "this is a terrible idea" energy, which, fair, that's what I asked for).

But one DM turned into a real back-and-forth with an artist in the electronic/dance space who's actively selling a chunk of one of his catalogs right now, signed papers on 1/3 of it this week. A few things he said stuck with me:

He ran the numbers himself and the buyer is basically paying him ~10 years of income today, priced on the assumption the catalog declines over that window. Rational deal if your only buyer is a fund pricing it cold.

The part he doesn't like: no buyback. Once it's sold, it's gone. He'd thought before about wanting something like a loan against the catalog instead, get the cash, no tax hit, pay interest, keep the option to buy it back.

That conversation is basically why buyback and loan-style structures are now central to what we're building at Encore Markets. Instead of an artist's only options being "take a fund's number" or "don't sell," the idea is fans can fund a piece of the catalog directly, at a price that isn't purely a cold DCF, and the artist can design in a buyback from day one.

Still early, still building, still want to be argued with. If you're an artist who's thought about this, or a fan who'd actually put money behind an artist you like, curious where you'd push back.

Disclosure: I'm the founder of encoremarkets.us.

I'm building Encore Markets, basically a stock market for songs. Artists sell a slice of their catalog's royalties to their own fans, fans collect quarterly income like a dividend. Solo founder, pre-seed

Instead of quietly polishing it I spent two weeks posting the idea all over Reddit to see what breaks. Roughly 300K views across finance and music subs. What I learned:

1. The buyers and the skeptics are different people than I expected. Income investors (dividends, passive income subs) leaned in, asked how to get access. Musicians were the harshest critics of their own industry's economics.
2. The objections cluster. Liquidity, decay (songs earn less each year), and "why not just buy Spotify stock." If you can't answer those three cold, you have nothing.
3. One real artist DM is worth more than 100K views. An electronic artist with millions of streams reached out mid-pile-on, said he's selling half a catalog right now and wished something like this existed. That conversation shaped the product more than everything else combined.
4. Automod is brutal to new-ish accounts. Half my posts got filtered before a human ever saw them. Comments almost always survive. Engage in threads, don't broadcast.

Happy to answer anything about the process or the model.

Been thinking about this from the marketing side. We spend all this energy growing streams and building a fanbase, but most independent artists never think of the catalog itself as an asset with a number on it.

The Dylan and Springsteen sales made catalogs a Wall Street thing, but that's the top 0.1%. Down at the indie level, if you own your masters and your catalog earns a few thousand a year, that's still a real asset with a value.

Two things I keep chewing on:

-Do you actually know what your catalog would be worth as a multiple of its royalties?

-Would you ever sell or share a slice of it to fund the next project, or does that feel like selling a piece of yourself?

Curious how the marketing-minded folks here think about the catalog as an asset, not just a stream of income.

Been down a rabbit hole and I can't tell if this is a real income play or just a gimmick.

The pitch: you buy a slice of a song catalog and get paid a cut of the streaming royalties every quarter, basically like a dividend. Some of these have yielded in the 4-7% range, and the income doesn't really move with the S&P since people keep streaming music in a recession.

The catch is it's not a grower. A catalog usually fades a little every year unless a song lands a sync placement or a random TikTok moment, so you're buying a slowly declining payout with the occasional pop.

For an income portfolio, does something like that earn a spot as a small sleeve, or is the fade a dealbreaker for you? Curious how this crowd would think about it.

With more independent artists owning their masters and publishing, I've been thinking about how people actually value a music catalog.

A song can generate income for decades through streaming, licensing, sync placements, etc., but the valuation seems incredibly difficult... some songs fade quickly, some have long tails, and some randomly come back years later because of a movie, TikTok, a game, or a new generation discovering the artist

For independent artists especially, how do you think about the value of your catalog?

Is it something you'd ever consider selling, licensing, or sharing ownership of? Or is the emotional/cultural value too tied to the music itself? Curious how artists and fans think about this!

Disclosure- I'm the founder of encoremarkets.us, a marketplace we're building around music catalogs and royalties. I'm posting this because I'm interested in how indie artists and fans think about catalog ownership/value vs promo

I've been thinking a lot about how artists value their music after release.

a catalog can become a long-term income stream through streaming, publishing, licensing, sync, etc., but it seems like there are a lot of unknowns. Some songs slowly decline, some find a second life years later, and some become career-defining tracks that keep generating value for decades (s/o Mariah)

For independent artists who own their masters and publishing:

• do you think about your catalog as an asset?
• Would you ever consider selling part of it or sharing future royalties in exchange for upfront capital?
• How would you even decide what a fair value is?

There’s also an emotional side to this.. understand a song isn't just a spreadsheet of revenue! For many artists, it's tied to their identity and creative history. That said, curious how musicians here think about ownership, valuation, and the future of music catalogs.

Disclosure**:** I'm the founder of Encore Markets (encoremarkets.us), a marketplace we're building around music catalogs and royalties. I'm asking because I’m interested in how independent artists think about these questions!!

Been going down a rabbit hole on music royalties as an income stream and I can't tell if it's a real asset class or just repackaged hype.

The idea is you buy a slice of a song catalog and get paid a cut of the streaming royalties every quarter, sort of like a dividend. Some of these have changed hands around 4-5x annual royalties, famous stuff way higher.

What I can't get comfortable with is the decay. A catalog isn't a perpetuity. Most songs shed streams every year unless there's a sync placement or some viral moment. So you're really buying a declining cash flow with the occasional lottery ticket on top.

How would you actually price that? Is it just a DCF with an aggressive decay rate, or is there a cleaner way to frame it? And does the low correlation to the S&P make it worth a small allocation, or is that oversold?

Curious how the valuation-minded folks here would think about it.

Portfolio question for this crowd. You can now buy SEC-registered fractional shares of music royalty catalogs (SongVest, ANote, Royalty Exchange). They pay a quarterly cut of streaming income, and the cash flow barely tracks the market since people keep streaming in a downturn.

Bull case: a small non-correlated income sleeve sitting next to equities. Bear case: it's illiquid, the income decays as songs age off their peak, and there's operator risk if a platform folds.

For people who actually manage a portfolio, would you carve out 1-2% for something like this as a diversifier, or does the illiquidity and decay make it a hard pass? Trying to pressure-test whether it's a real asset class or a fad.

Been going down a rabbit hole on music royalties as an income asset and wanted this crowd's take, since it rhymes with dividend investing.

The basic idea: a song catalog throws off streaming royalties every quarter, and you can now buy fractional shares of that income through SEC-regulated platforms (SongVest, ANote Music, Royalty Exchange). You collect a pro-rata cut of the royalties like a distribution, and some have secondary markets so you can exit.

How it stacks up against traditional dividend stocks, from what I can tell:

-The cash flow is fairly non-correlated to the market, people stream music in a recession too

-Quoted yields tend to run higher than most blue chips, but the income can decay as a song ages off its peak

-It's much less liquid than a stock, and there's real platform/operator risk, a couple of fractional platforms in other asset classes have folded

For the income investors here: would you ever put a small slice of a dividend portfolio into something like this for the diversification, or is the illiquidity and decay curve a dealbreaker? Curious how you'd size it, if at all.