At roughly $0.003 per stream, the economics of recorded music remain deeply hostile to independent artists. Most working musicians earn less from a million streams than from a single well-attended club show. The system was designed for an era of physical scarcity, and it has never been successfully updated.
The Problem With Per-Stream Pricing#
The fundamental issue is not that streaming platforms are malicious — it's that they were built around a model that made sense for major labels with enormous catalogs, and that same model systematically disadvantages independent artists. A song streamed ten million times earns approximately $30,000. Split between a producer, a mixing engineer, two featured artists, a manager, and a lawyer, that leaves almost nothing for the person who wrote and performed it.
The per-stream model doesn't need to be tweaked. It needs to be replaced — or at minimum, supplemented with financial instruments that reflect the actual value artists create.
Catalog as an Asset Class#
The $1.3B acquisition of Bruce Springsteen's catalog was a headline event, but it pointed at something deeper: recorded music is finally being treated as the durable asset it has always been. The question is whether that recognition will trickle down to artists who aren't legacy superstars.
We believe it will — but only through new financial infrastructure. The companies we're most excited about are building the following:
- Royalty advance platforms that allow artists to access capital against future royalty streams without giving up ownership
- Fractional catalog ownership — enabling fans and investors to buy shares in specific songs or albums, creating a secondary market for music IP
- Sync licensing automation — using AI to match independent music with commercial opportunities that previously required expensive representation to access
What the Market Gets Wrong#
The conventional wisdom is that music royalties are a declining asset class. We think this is precisely backwards. Streaming has dramatically expanded the addressable market for recorded music. Global streaming revenue grew 11% last year and shows no signs of plateauing. The problem isn't the size of the pie — it's how it's sliced.
Our Investment Thesis in Five Points#
- The royalty asset class is undervalued relative to comparable financial instruments in other creative sectors
- Artist financial literacy is rising, creating demand for more sophisticated financial products
- Regulatory clarity around music IP is improving in key markets, reducing investment risk
- The infrastructure to underwrite and service music royalty loans at scale now exists for the first time
- A generational transfer of catalog ownership is underway as legacy artists age and estates seek liquidity
The Founders We're Looking For#
The best founders in this space tend to combine deep music industry relationships with genuine financial engineering sophistication. They're rare — but when we find them, we move quickly. We've backed three companies in this space already and are actively looking for more.