Sarah didn't want to play the stock market. She wanted to own a piece of something she could hear. For years, she had hummed along to a specific 90s pop ballad—a song that still filled every grocery store and wedding dance floor in the country. She decided she didn't just want to listen to it; she wanted to own a piece of it.
Finding the right asset Investors can either buy an existing royalty, or create a royalty against an asset that generates revenue. Partners Group Music Royalties 101: An In-Depth Guide
Now, every time that song plays in a café or gets streamed on a rainy Tuesday, Sarah doesn't just hear a melody—she hears the sound of her investment growing. Royalties - A Primer - Partners Group how to buy royalties
She found an auction for the "Mechanical Royalties" of her favorite 90s track. Before bidding, she looked at the "LTM" (Last Twelve Months) earnings. The song had consistently earned about $5,000 a year for the last decade . It wasn't a viral hit that would fade; it was an "evergreen" asset.
Sarah started by researching where people actually trade these things. She found that individual artists or publishers often sell their "back catalog" to get a lump sum of cash up front . She signed up for Royalty Exchange, a platform where creators auction off their performance or mechanical royalties. Sarah didn't want to play the stock market
The auction was competitive. Sarah knew she was buying the rights to the stream of income, not the copyright itself—she couldn't change the lyrics or stop people from playing it. She calculated that if she paid $25,000 (a "5x multiple" of its yearly earnings), she would theoretically make her money back in five years, and everything after that would be pure profit.
To buy royalties, you typically purchase the rights to future earnings from an asset like music, books, or patents through specialized marketplaces like Royalty Exchange or SongVest. The Song of Sarah: A Story of Buying Royalties She decided she didn't just want to listen
She won the auction. After a few weeks of paperwork where the Performing Rights Organizations (PROs) like ASCAP or BMI updated their records, Sarah received her first direct deposit .