Music Rights and Music Catalogues: where the market is heading and what matters in a deal

The market for music rights has matured into a recognisable M&A segment, driven by the search for durable, repeatable cashflows and by improved transparency in digital consumption data. For sellers, catalogue transactions are often a way to crystallise value, diversify personal wealth and secure a long term legacy. For buyers, the attraction lies in the potential for recurring royalty income with relatively low correlation to traditional financial markets, alongside the possibility of operational upside through more active exploitation.

What investors are buying when they buy a catalogue

A music catalogue is best understood as a bundle of rights and income streams rather than a single asset. In most transactions, value is anchored in two core right types. Publishing rights relate to the underlying composition and lyrics, while master rights relate to the specific sound recording. Depending on contractual structure, buyers may also acquire adjacent participations such as producer royalties, performance related income or, in selected cases, certain name and image rights, provided these are clearly delineated and enforceable.

The resulting revenue base typically includes digital streaming income, performance royalties, mechanical royalties, synchronisation licences and physical or digital sales. The practical ability to collect and audit these flows across territories, societies and administrators is central to both valuation and risk.

Who is buying, and why the buyer universe keeps widening

The buyer universe now spans specialist music funds, strategic industry players and financial sponsors. Institutional funds such as Recognition Music Group and Primary Wave have helped institutionalise the asset class, often acquiring established catalogues that can be further developed through licensing and marketing execution.

Strategic buyers, notably Universal Music Group, Sony Music Entertainment and Warner Music Group, pursue catalogues for strategic control and monetisation capabilities, including re releases, synchronisation placement and broader marketing integration. Their transactions frequently set benchmarks for market pricing because they tend to involve premium assets and because strategics can monetise beyond pure royalty streams through infrastructure and distribution advantages.

Financial investors, pensions and sovereign capital increasingly participate directly or via partnerships. A recurring pattern is the formation of investment vehicles with major labels to combine capital with operational access and catalogue exploitation know how. Recent examples in your research include a joint venture involving Bain Capital and Warner Music Group with a stated capital raise for catalogue investing, and partnerships between GIC and Sony Music Entertainment aimed at joint investments.

How catalogues are valued in today’s market

Market practice commonly values catalogues using a multiple of a sustainable annual cashflow proxy, frequently the Net Publisher’s Share, which is broadly gross receipts less the shares payable to songwriters and administrators. Current reference ranges in your research point to publishing multiples typically around 12x to 16x, with high quality catalogues often priced at 15x to 18x. Master rights tend to trade slightly lower on average, reflecting the broader diversification potential usually associated with publishing income streams. For 2024, your material cites an indicative level of around 16x for publishing and around 13x for recorded music, while combined publishing and master ownership can command the highest multiples.

Multiples are not purely a function of genre or brand. They reflect a balance of perceived risk, cashflow durability, catalogue scope and the likelihood of additional monetisation. In that context, the headline multiple is a shorthand for underwriting assumptions about decay, growth and execution, rather than a simple market fashion.

The value drivers that consistently move price

A key pricing variable is age and stability. “Evergreen” songs with long, predictable earning histories tend to attract meaningfully higher valuations than newer repertoires where the long tail is less proven. Your research highlights that longer earning histories lower perceived risk and can support higher pricing, while the strongest outcomes are typically observed in catalogues with many years of established royalties.

Revenue mix is another differentiator. A higher share of streaming income is associated with higher valued transactions in your dataset, with catalogues trading at higher multiples showing a materially larger streaming contribution than those priced below the top tier. The implication is not that streaming is risk free, but that predictable, scalable consumption patterns can support underwriting and financing.

International reach also matters. Catalogues with a global footprint, often supported by English language consumption patterns, can reduce concentration risk and open wider licensing opportunities. More regionally confined repertoires tend to trade at a discount because monetisation pathways and audience scale are structurally narrower.

Finally, operational upside can be real, but it needs to be modelled with discipline. Synchronisation and licensing in advertising, film, television and games can add incremental value, and your material notes that this potential can lift pricing modestly. At the same time, it is not always the primary determinant of what buyers pay, particularly for investors focused on recurring income rather than active music exploitation.

Due diligence themes that decide whether a deal holds up

Catalogue underwriting ultimately hinges on rights certainty and cash collection. Title chain, split accuracy, territorial scope, existing administration or label agreements, and the enforceability of claims across performance rights organisations and other collection channels should be treated as fundamental.

From a financial perspective, decay dynamics are decisive. All catalogues experience natural decline over time, and what matters is the speed and depth of the fall, particularly in the most recent years. Your research flags the recent three year trend as a practical risk indicator, with relatively modest declines viewed as safer underpinnings for long term projections.

Macro conditions also feed into pricing. The 2020 to 2022 period benefited from very supportive financing conditions, while higher interest rates and volatility increase buyer selectivity. In parallel, many of the most iconic assets have already been absorbed, which tightens supply and makes competitive processes more likely for premium opportunities.

What is distinctive about the German speaking market

Your buyer universe work suggests that large, visible catalogue transactions are comparatively rare in the German speaking market. The reasons cited include lower streaming economics relative to global hits, a geographic limitation of revenue streams that can translate into valuation discounts, and a preference among many artists to retain ownership through long term publishing or distribution arrangements rather than full sales. Where deals occur, they may be less transparent, and majors or existing partners are often the most natural acquirers because they already sit close to the repertoire and its commercial machinery.

Outlook: selective activity, not a structural reversal

The medium term picture in your research points to ongoing transaction activity, supported by continued streaming growth and greater predictability of digital revenues, which can attract capital from both within and outside the music industry. At the same time, limited supply, higher rates and volatile markets can moderate multiples and increase the premium placed on catalogue quality, rights clarity and realistic upside plans. For investors and corporates, this favours disciplined underwriting, robust legal diligence and a clear monetisation thesis that goes beyond financial engineering.