An Inefficient Market
ANote innovates the traditional Business Model by tackling its inefficiencies.
The creation of a liquid, transparent and integrated Market for Music Rights will unlock financing for new projects and help Artists become financially independent.
A closed market
Royalty Contracts are generally privately traded between players (Record Labels/Distributors, Managers, Artists)
Usually, the creation and trade of a Royalty Contract takes place only when the album/song is created. Plus, only pennies of the dollar reach the Artist’s pockets
Record Labels are investing the most in A&R (16.9% of revenues on average in 2016)
Some Artists may need to become financially independent, and Labels may need funds to invest in new projects. Other players may want to exploit ANote’s network and visibility, or simply cash out. ANote aims to help Artists, Record Labels and Publishers to achieve flexible arrangements when selling Rights. In fact, sellers are totally in charge of the terms and conditions of each offering. They decide what Rights are being sold – neighbouring or copyrights – the percentage, the term, and the minimum amount to be raised. Generally, sellers are asked to keep ownership of a portion of each catalogue (partial offerings) to align interests with other Market participants.
The Music Business is a capital intensive Business Model. Record Labels rank high in terms of expenses in R&D (A&D), and engaging in new projects for Artists requires significant resources. In fact, transactions of Music Rights are frequent, but usually privately negotiated. We have gathered a few recent ones.
In July 2018, Hipgnosis Songs Fund Ltd acquired a 75% interest in 302 songs by The-Dream for US $23.5 million. The catalog includes 25 Billboard top 10 songs and four Grammy Award-winning songs.
In January 2018, Chris Blackwell, who controls the rights to Bob Marley’s music publishing catalog, signed a $50 million deal with Primary Wave Music Publishing, a boutique New York music company.
In November 2017, after a three-month auction that attracted 14 bidders, SONGS Music Publishing sold its catalog to Kobalt Capital’s fund. According to sources, the transaction closed at a multiple higher than 12 times past earnings.