Investing in the Music Industry – does it worth?
Investment involves many opportunities to invest in many things that are not only assets. Taking a pace with the time and technologies, people often stop themself and take a break to rethink the investments they possess to turn them more profitable and worth being kept for a long-term deal. Sometimes, they come to radical decision to change the direction of investment because some new trends on the market appeared. And there is a need to get some advice about trends, whether they are worth investing in or not. Investment companies are extremely helpful in this question. JKR is one of those investing groups that is always up-to-date with new market trends, creates successful investment plans due to the objectives of the business, and provides necessary consulting services.
2021 has become a year of various opportunities and significant investment changes in the financial world. Million of viewed YouTube videos disproportionately are music videos. The best of them gain a myriad of subscribers (viewers and listeners). Overall, the music industry takes a powerful competitive position it has ever been in. For example, Warner Music went public in one of the largest US IPOs of the year in June 2020. It illustrates the great demand for the valuations of music assets.
In the context of Covid-19, the so-called roadshow transformed into virtual and could reach a great deal of investors in a short period.
Facts of Music Industry’s Growth
Talking about IPO Warner Music, its value followed Spotify listing two years ago. And it was valued through the cooperation with music artists, content owners, and streaming services owing to new technologies. The current music industry differs a lot from the early 2000s. Then the music industry faced refusing CD sales and issues on online piracy. Accordingly, many companies were obliged to cut costs to remain profitable.
Paid streaming involvement allowed to disclose a new way of monetization and returned the better state to the industry. And the tendency for growth is changing as it is gaining more popularity.
The streaming model in the music industry is sought-after by customers because people are willing to consume music in this way. It delivers to the customers through their request. This flexibility has allowed other services to prosper, especially during the coronavirus pandemic. People worked remotely and used streaming music as an accompanying element for better concentration or else.
Practically, this occasion has led to the improvement of the streaming model.
With data collected on customers’ accounts, digitalization allows building playlists and personalized recommendations in order to keep them engaged and create value. These services usually follow a freemium model. It involves that customers can consume whatever they wish at a fixed period of time. It also increases the conversion rates for paid subscriptions.
Like any other industry, music will keep growing and reaching new heights in paid subscriptions too. Its expansion can touch developed markets as well as emerging makert. It is logical as the music streaming spreads to other parts of the planet along with Internet implementation.
Value of music to invest
When it comes to investment, diversification is a parameter to stick to if the investor is interested in having stable income from their investment assets. The same possess to the music industry.
Investors look for the value music of particular artists as well as consider various genres.
So, song catalogs can be a good investment due to the royalty payment they deliver. Sometimes, they are compared to bond-like investments as they provide a passive and stable income.
If the investor doesn’t want to risk much, they can stick to more timeless artists who have proven themselves over decades and store large fanbases.