Can You Profit from the Music Boom?

Royalties are all the rage as artists sell their back catalogues. Is it time to press play on music investing?

James Gard 19 July, 2021 | 10:19AM
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Streaming service Spotify (SPOT) revealed that its top song last year was listened to 1.6 billion times, while Bob Dylan sold his entire back catalogue for $300 million in December 2020. Is music the next big thing for investors? We look at whether you should tune into this latest hot asset class.

Lucrative concert performances ground to a halt during the Covid-19 pandemic putting the focus for the industry on music royalties and back catalogues of classic albums and artists. You might not realise this is a sector investors can easily tap into, but several investment trusts have launched in recent years, whose investment strategy is to buy up the back catalogues of music from successful artists and make money from the royalties. Every time a song is played on the radio or streamed through an app, royalties are paid, and these soon add up when you own thousands of popular songs. 

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James Gard  is content editor for Morningstar.co.uk