Trapital - the most valuable catalog

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the most valuable catalog

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Hey! Today’s podcast episode was based on one question:

Which artist’s back catalogs will generate the most revenue in the next ten years?

We did our first-ever music rights draft. Denisha Kuhlor and I played the role of multi-billion dollar fund managers who have acquired dozens of artists' catalogs and rights in recent years.

But while they choose from those willing to sell, we could choose from anyone, living or dead, to build our portfolios. Here are a few highlights.

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the music rights draft

Our goal in the music rights draft was clear: maximize our portfolio over the next ten years. We only looked at the existing catalogs. We made no assumptions about what the artist may release in the future. We also didn’t factor in non-music revenue like touring, apparel, or product sales. This is strictly about music rights (e.g. masters, publishing, etc).

We took several factors into account:

• Longevity of an artist’s music (the flatter the decay curve, the better)
• Popularity: across revenue categories like streaming, physical, digital, etc
• Multimedia: likelihood of syncs, TV/film, and other partnerships that can boost value
• Ownership: assumed artist’s ownership share of sound recordings (e.g. genres like pop, EDM, and hip-hop are quite collaborative and sample often, so the “pie” is more split)
• ROI: which artists are over/undervalued by the industry? Where can we get the most bang for our buck?

Denisha had first pick and chose The Queen of Christmas, Mariah Carey. “All I Want For Christmas Is You” generates hundreds of millions of streams every holiday season. Plus, Mariah has more #1 singles than any other artist. Her hits date back to 1990.

I had the second pick and chose Taylor Swift. She dominates on all platforms—streaming, vinyl, CD sales. Many of her albums are still in the top 50 every week. Streaming was an important factor for me because it generates a majority of recorded music revenue today. Millennials are the generation that streams music the most, and Taylor is the generation’s biggest star.

the growth portfolio

Our next six picks are where our strategies differed. Denisha’s picks were the high-risk high reward growth portfolio:

1. Mariah Carey
2. Bad Bunny
3. Burna Boy
4. Lizzo
5. Summer Walker
6. Pharrell
7. DMX

With an eye toward global potential, she chose Bad Bunny and Burna Boy. Both have global and plenty of upside. If anyone is going to reach “Beatlemania” level fame in today’s fractured pop culture, it’s these two.

For picks four and five, she went with two newer artists, Lizzo and Summer Walker. Even though Lizzo doesn’t get many streams, I think her music has strong sync potential. That Royal Caribbean Cruise commercial is stuck in my head. Meanwhile, Summer Walker is one of the few Black women R&B singers (under age 30) that reach a massive audience. Still Over It broke many R&B streaming records and has staying power. She’s in her own category.

Rounding out Denisha’s portfolio are two OG’s in Pharrell and DMX. I like the Pharrell pick because it includes his revenue as an artist and producer. The Neptunes sound was inescapable in the early 2000s, and Pharrell has hits spanning several decades. Meanwhile, DMX is a bet on the late rapper’s music being sampled or turned into a biopic given his popularity with other artists.

the blue chip portfolio

I went much more stable with my portfolio. All but one of my catalog choices are blue-chip assets:

1. Taylor Swift
2. Drake
3. Eminem
4. SZA
5. Bruno Mars
6. Michael Jackson
7. The Weeknd

After T Swift, I went with an obvious pick, Drake. But my third pick, Eminem, may surprise you. I don’t listen to his music much anymore. A lot of it hasn’t aged well. But it still gets streamed a ton.

Two Eminem facts I’m still thinking about:

– “Lose Yourself” is the most-streamed Spotify song from the 2000s and “Till I Collapse” is #3. People love themselves some Slim Shady workout music.

– Eminem’s 2005 greatest hits album “Curtain Call” was the best-selling rap album in the UK in 2022 (and sixth overall among all genres). This album is 17 years old and it’s still doing numbers.

SZA at four was my bang-for-my-buck choice. She’s only released two albums, CTRL and SOS, but both have staying power. CTRL continues to chart more than five years later, and SOS stayed on top of the charts for almost three months—a rarity in today’s fragmented landscape.

To finish out my picks, I went with Bruno Mars, Michael Jackson, and The Weeknd. Jackson’s catalog is probably the most expensive one out there. Rumors flew last month that half the catalog was fetching $800 to $900 million. At that price there are only a handful of buyers who have that money, so we’ll see if it actually trades hands any time soon

honorable mentions

There were too many to name, but we both considered Kendrick Lamar, Celine Dion, Ed Sheeran, and Coldplay. We thought about Beyonce and Adele but thought that the price would be quite high compared to their expected revenue.

We covered a lot more in the episode:

• why we don’t have more legacy, older artists on the lists
• which up-and-coming artists we would most pick
• how some firms maximize value differently

Listen to our full conversation here:

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money moves

• where we are in the video streaming wars, have been, and will go
• what private gigs tell us about the music industry​

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