Music will rake in $41 billion by 2030, according to a recent report from Goldman Sachs — over 80 percent of that from streaming sites like Spotify or Pandora. Thing is, every time a song is streamed online, somebody’s getting paid royalties. Now a new company is capitalizing on this growth in a novel way.
Every time somebody streams Eminem’s “Lose Yourself” or it plays in a bar or at a football game, somebody’s collecting what are known as performance royalties. Eminem himself makes money, but in the case of “Lose Yourself,” another production company called FBT Productions is also cashing in. That’s because it owns rights to a big chunk of Eminem’s song catalog.
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Royalties from the Etta James single, “Something’s Got a Hold on Me,” recently went for almost $150,000 in a Royalty Exchange auction.
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[Royalty Exchange is] paying FBT Productions nearly $19 million for royalties from 14 years of Eminem’s recordings, including “The Eminem Show.” Royalty Flow just began offering shares in those royalties to investors.
Peter Thall, a music attorney, said musicians often have a hard time borrowing from a bank. Selling off performance royalty income can help a musician raise money.
“Songs are intangible,” Thall said. “You can’t touch an intellectual property copyrights. These things are hard for lenders to understand.”
Link to the rest at Marketplace