In a song rights M&A market where deep-pocketed buyers predominantly seek deals with superstars whose predictably high streaming income offers a solid ROI, how do the middle-class of songwriters access liquidity from their work?
Music rights investment firm Catch Point Rights Partners, founded in 2020 by senior executives in the music and private equity industries, believes it has the answer.
Catch Point has previously acquired interests in what it says are “thousands” of sound recordings and publishing rights since it launched in 2020.
The firm owns interests in songs recorded by superstars from 5 Seconds of Summer, to A$AP Rocky, All Time Low, Avicii, Avril Lavigne, blink-182, and more.
Now, the New York-based company says it is expanding the scope of its services to the wider songwriting community with a new program focused on acquiring performing rights organization (PRO) songwriter royalty accounts.
According to Catchpoint, the program creates an opportunity for songwriters to monetize their performing rights income streams via the sale of their PRO accounts “while retaining ownership and control of all of their other publishing royalties”.
The company notes that music royalty investment firms traditionally require “significant annual earnings levels” before they would consider acquiring a catalog, but Catch Point aims to change that with its new program.
The firm has created a proprietary platform to automate the valuation and transaction process “end to end” so that it can target songwriter accounts making at least $50,000 per year from musical works commercially released in 2017 and prior.
It will then provide an upfront cash payment to acquire the royalties associated with PRO accounts of songwriters it chooses to work with.
Catch Point claims that its new PRO program “makes it easier for more working songwriters, not just the top 10% or 15% of earners, to unlock the liquidity in their public performance royalties”.
In the first phase, the program will be limited to songwriters meeting the catalog royalty and age profile and are affiliated with ASCAP, BMI and SESAC.
However, Catch Point Co-Founder & Partner Richard Conlon told MBW that the company believes that the program “has the potential to expand to other smaller catalog acquisitions”.
“The underlying automation that we have built is applicable to multiple music right types and deal sizes.”
Richard Conlon, Catch Point
Added Conlon: “Our plan is to test the approach with the songwriter PRO marketplace and then expand as market conditions warrant. The underlying automation that we have built is applicable to multiple music right types and deal sizes.”
The program uses an online interface combined with what Catch Point says is “a standard form agreement to make the process easy, discrete, and efficient” for songwriters to sell the royalties associated with their PRO accounts.
Commenting on the theses behind targeting ‘middle market’ songwriters with the new automated program, Catch Point’s Richard Conlon explained: “Anecdotally, we have heard from songwriters over the past several years that they feel shut out from the catalog transaction marketplace because they have been told that their catalogs are not large enough in terms of earnings to support the sale process which can be an expensive and, at times, cumbersome.
“We want to change that by creating a technology-enabled process that is quicker and more efficient for songwriters while opening a new category of potential investments in the craft of songwriting for Catch Point.”
“This new offering complements our success in acquiring dozens of catalogs in the music rights space to date. We are delighted to expand our service to the songwriting community with this new program.”
Richard Conlon
Catch Point estimates that ASCAP, BMI and SESAC have nearly 2.4 million affiliated songwriters who generate over $1.8 billion-plus in songwriter share public performance royalties each year.
With these estimates in mind, and commenting on the opportunity presented by the songwriter PRO program, Conlon said: “We believe that there is demand from creators to access catalog-focused financial services and options around their catalog just like they can find professional support for their personal banking or transactions around their homes or other investments.”
Conlon told MBW that Catch Point “hope[s] that the program opens up a pathway to liquidity for working songwriters.”
In an official announcement on Wednesday (February 21), Conlon said that “this new offering complements our success in acquiring dozens of catalogs in the music rights space to date. We are delighted to expand our service to the songwriting community with this new program.”
He added: “It all starts with a song. By giving listeners more choice and control, streaming has helped level the playing field and access to audience for music creators.
“We want to do the same with regard to access to financing. Catch Point’s Songwriter PRO program helps writers unlock value and generate liquidity from their performing rights royalties. The process is simple and transparent.”Music Business Worldwide
