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Why Investors are Curious About EDM
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Why Investors are Curious About EDM

Home Uncategorized Why Investors are Curious About EDM

Electronic Music has an astounding market size worth over USD 5000 million in 2021. Analysts project a remarkable expansion, expecting it to expand by a CAGR of 11% by 2027, hitting USD 9750 million.

Two years after the pandemic, the electronic music industry shot up by 71% and was valued at an impressive USD 16 billion. The world’s third most popular genre attracts a large fanbase, with Americans sitting at the top of the list. Even more surprising is the new entrant-South Africa- to the top list after displaying the most significant growth within 12 months.

Generally, the music market generates about $170 billion for the U.S GDP annually, thus remarkably contributing to the economy. With these numbers in mind, you can tell that EDM is an active player and exporter of sales. Several forecasts show that the figures are only headed up within the next five years; thus, it is certainly not surprising that the industry would spark the interest of investors.

How to Invest in the Electronic Music Market?

Music royalties have been an attractive class of asset for the longest time. The industry is typically viewed as a very competitive landscape. However, becoming an angel investor does not have to be complicated. The music money has a lot of money to go around.

Investors are taking notice of the low correlation between the current yields and the macroeconomic performance, thus the massive financial potential of music intellectual property. The three primary routes to follow if you want to invest in music assets include:

  1. Music Royalty Funds

Royalty funds are an ideal source of recurring income. Various public and private distributors collect them, and income is paid to the respective music IP rights holders. Music royalties attract investors due to the predictable nature of income, which is considered one of the most desirable attributes investors pursue. Anyone can invest in music IP through music royalty funds. Popular publicly-traded music investment companies include Hipgnosis Songs Fund and Mills Music Fund.

  1. Direct Purchases

Music companies do this all the time. They buy and sell music industry assets or acquire primary publishing rights. The long-occurring industry is rapidly acquiring new potential thanks to the evolutions in technology and the growth of infrastructure. IP purchases are the easiest way to penetrate the music investment market. Various platforms like Royalty Exchange offer smaller and more affordable deals to the everyday investor with up to zero intervention from record label managers and publishers of music royalty funds.

  1. Record Labels

Record labels are the classic music investment platforms. Although most are private and out of reach for potential investors, more traditional labels are opening their markets by going public. Since 2020, some big names in the industry, including Universal Music Group and Warner Music Group, have gone public. These companies could be pioneering a trend that may influence others to follow suit, thus creating room for other investors.

What is the significance of the Electronic Music Market Report to Investors?

What is happening in the Electronic Market now and what will occur in the coming years is analyzed based on the available historical data and the most recent period of the COVID-19 pandemic and the ongoing Ukraine War.

A 2022-2030 Report on Global Electronic Music Market by Player, Region, Type, Application, and Sales Channel gives insightful data from the historical analysis of the same market from 2016-2021. The report analyzes the Electronic market size, segment size( based on product type, application, and geography), the competitor landscape, development trends, and the industry’s current status.

The in-depth overview of the Electronic Music Market is a significant reference point for most stock market advisors akin to music market investors. It outlines the factors that increase the industry’s growth and the scope of different segments that may influence the market’s future.

The report is very beneficial to those who want to join the music stock exchange as it summarizes the past and future of the industry in 123 pages. Therefore, potential investors can design strategies, key points, and areas and catch on to emerging trends. Its value is synonymous to-perhaps more than- the role of Gerardo Del Real in the energy sector.

Why Should You Consider Investing in the Electronic Music Market?

The electronic music industry inherently shares in the enormous music industry’s benefits. Realizing that publishing catalogs are financeable assets creates a lucrative and competitive environment. Here are more reasons to consider joining this space.

The Stability of Digital Streaming

After more than a decade and a half of declines attributed to piracy, streaming platforms create stability to the music royalty cash flows. The new royalty income stream has elevated the confidence in owning music IP assets, thus helping the industry thrive.

Recurring Digital Potential

Music royalties have always sparked interest as a source of recurring income. Similar to the real estate industry, it attracts investors looking for a passive source of income.

Low Correlation to Economic Activity

While most industries struggle to get off their knees, the music industry is booming. According to the State of the Music Industry, Music IP rights have evolved and are on a microscopic watch. Therefore, everyone is most likely to get what they deserve.

Additionally, Music as an asset is highly dependable as the world heavily consumes it. Electronic Music is especially one to watch out for as it is the third most popular genre globally. Over 1.5 billion people listen to electronic Music, and the numbers are on an exponential rise. The market has stood the test of time, holding up even during the worst times in history, like wars and pandemics.

Wise investors do their due diligence before diving into any market. Although the music industry is quite resilient, it should be no different. All the cards appear right, and investors cannot wait for a seat at the table.

 

 

Photo by Simon Boxus on Unsplash

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