Why Music Back Catalogs Have Become a Red-Hot Asset Class

But in recent years there have been some pretty amazing ones. I think one of the weird things about this is that nowadays, when you hear it, it doesn't actually sound that weird, But when these things were happening just a couple of years ago, it was really strange. So I remember, for instance, there was a solar panel securitization a few years ago, and everyone thought that was nuts because bankers were securitizing Sunshine into an investable bond. But nowadays that

seems very very normal. And then some of the other ones that have come up are franchise rights and sort of brand values from restaurants. We've had a bunch of those and the latest one that everyone is kind of going nuts over is music rights. Yeah, exactly right. So basically, anything that throws off some sort of predictable or semi predictable ers, um, you know, future cash flows can theoretically be turned into a product, into a financial product that

can be sold. And of course one thing that we know uh FROs off cash is music rights. And so this year, um, there's been a budge but a couple of artists that sold the rights to their catalog. Bob Dylan, someone bought Bob Dylan's future cash flows. So all the I guess, I don't know all the music that all the streaming revenue, and U said, commercials and movies and all that he got got got a big check in advance for that. Shakira is another one who just I think a few weeks ago, a few weeks ago, sold

her song catalog. So this is a hot area. I mean, I think there's actually like, weren't Bowie Bonds a thing a long time ago? That's like basically the Joe there's an aw thoughts episode on this. There's actually a very very early Yeah, that was right after David Bowie died.

But I have to say, probably the most interesting thing that happened in the music rights or royalty space last year was someone not selling um their music rights, and that was Taylor Swift, who famously has you know, lost the rights to her master, her old masters, her catalog of back music, and then it was bought by it or Braun, which is kind of her like arch nemesis in the music world, and then he sold those on to a private equity firm called Shamrock Capital, and Taylor

Swift had a lot to say about that entire process, which I'm sure we're going to get into. I gotta say, someone actually emailed me saying that we should get Taylor Swift on the podcast to talk about all these Um, yeah, why haven't we yet? I can't believe that's so obvious. Why haven't we just had Taylor Swift on our podcast you know one day. Um, we'll get her next week, we'll get her next year. So obviously we don't have Taylor Swift today. UM, We'll be upfront about that, but

we do have someone who knows all about this space. Yeah, and there are so many questions that we need to get answered, like why now, how do you value these uh income streams of these catalogs. Given the ongoing changing nature of the music business. I mean, these days, obviously streaming is a really big thing, but that wasn't obviously anticipatable a few years ago. We don't know what the music industry is gonna be like ten years, So so

many questions why now how you value these catalogs. So I'm very excited we're going to be speaking with someone who is a a music consultant in the business of valuing exactly what we're talking about. We're going to be speaking with Alistair Moen of Moan Music, an expert in the music valuation business, to answer all these questions. So, Alistair, thank you so much for joining us. Of course, thanks Jo. So um you know why now, I mean, let's start with that. I mean, we have seen a number of

really big artists selling the rights to their work. They're turning their work into an asset that can be sold. Obviously, this isn't totally new, It's been going on for a while, but it seems to be really gathering steam. So what is uh, what's happening right at this moment that suddenly is making this a hot asset? Class you sort of mentioned in your introduction, dere and obviously streaming has increased the recording music industry and especially the narrative around the industry.

So the year two thousand and two thousand and fourteen, there was continuing decline in the sale of recording music as physical sales dropped. Since two thousand and fourteen, you've seen a streaming growing a rate of forty per year, which is really encouraging. And the other thing which is really encouraging by that story is the nature of the consumption. Where obviously, in a physical environment, um, you sold a lot of CD s, it's sort of a one off transaction.

But we're streaming, you've got sort of repeatable consumption and it's very much um yeah, but a lot of interest from investors in the data is a lot better than traditional sales data, and also the underlying consumption there's more of a There seems to be a lot more repeatable

consumption which people are confident they can model. So I think definitely that strong narrative around the recording music industry, a lot of education in the market with the lacks of hypnosis and primary wave doing a lot of funding rounds, and definitely sort a low interest rate environment is have a lot of people looking for for assets of field long term yield, and music catalogs there's sort of been

a really really in vogue opportunity for that recently. So when we see a headline like Universal Music Publishing buying Bob Dylan's catalog for a reported three million dollars, what does that actually mean, Where does the price come from, and what does the catalog actually entail in terms of rights and cash flow? Sure, so that's a very good question. Um. First of all, when you're talking about a catalog, that

can mean different types of rights. So really broadly, you've got the master rights, so that's the actual recording copyright, and then you have the publishing copyright, which is the underwriting underlying song or the underlying composition, And it gets a little bit more complicated around with you by the right to have control over that income. But those are

sort of two general classes. And when Universal we're valuing that transaction, they'll be looking at the income streams historical income streams from whatever rights that buying, and they'll also be looking at how long they have those rights will last for and then sort of trying to project those rights going forward and as I sort of mentioned, you know, for example, publishing copyrights last seventy years plus the life of the offer, so it's a very long term cash flow.

So most of these investments are looking for low yield and sort of projecting ten to fifteen years of cash flow with a terminal value. So it's is very much a long term horizon of looking at the past history, how long you're those rights for, and sort of how confident you are and predicting those future cash flows. You know, you mentioned, um, the high quality of the data that we're streaming, these assets can be analyzed in a way

that they haven't been. It hasn't been so easy in the past, like maybe when people are buying CDs and such.

But on the other hand, streaming as a phenomenon hasn't really been around that long, and we know that you know, it's right, there's always potential for technological disruption, So how do people or how do you go about essentially modeling the risk that the business just dramatically changes again like another sort of like napster or something could come along in theory and people stop paying for music, or the amount of people pay for music plunges, Like how do

how do those risks get incorporated into what people are willing to pay. So that's a really interesting question. And historically before the recent boom, publishing catalogs or have the master catalogs but sort of considered a lot more lower risk. And for that for the very reason you mentioned that UM in terms of of the royalty is coming from B to C income, so from sales or streams. That's

something which does change over time. But what's often quite prominent in music catalogs, which is on the publishing side, is B two B licensing, so licenseseing revenue from radio play or from the background usage of music and stores, or from the background usage of music and bars, and as well as sort of licensing for TV and film, and going forward, I guess there's a lot of hope that you know, new technologies such as AI et cetera,

to be also licenses for that. So that's one of the reasons why particularly publishing is which has more of those diverse income streams typically is sort of considered more lower risks, So that's very much a consideration, and looking at the types of incumbent it's sort of quite surprising is how many diverse income streams can come from one copyright. So Joe just mentioned the idea of the business model

changing and how might that impact master right. So, one of the really interesting things about the Taylor Swift saga that I mentioned in the intro was that after her Old Masters were sold to this private equity firm, she basically said that she was going to re record her old songs um in order to like get control back over them. I have to say, like, this is an area that I'm not familiar with, but what does that actually mean? And how is she allowed to do that?

Because I thought the whole point of Old Masters was to basically preserve the copyright on the music. And then lastly, would that vastly change the value of the songs that this private equity firm, Shamrock Capital just bought for millions

of dollars? Of course sure. So before I went to the music industry, I was actually a trained lawyer, and it's become really in handy because as well as valuing these royalty cash flows and analyzing it, you've could be got to be really familiar with the legal um stipilations of these contracts. So when I spoke about the master

recording and the and the publishing composition. The other difference there is that, um, if you write a song and you do it, someone else does a cover version of it, someone else can always see another cover, but you can't record. You can't write the same song again, So that publishing contract always remains unique, but you could always For example,

Taylor Swift is effectively covering her own songs. So typically the record label when it scien Taylor Swift, there be provisions and those contracts saying that she can't cover her own songs for a specified period of time. So that's what's going on there, is that she is effectively covering her own work, and that's something which, yeah, there's stipulations in the contract. The second part of your question is

really interesting because the short answer is it's un tested. Um, there's being sort of people in the past, prominent artists such as Prince who have had fell out with the record label and always used this as sort of a part of the negotiation. We're saying, well, I'm going to rerecord my entire catalog, and usually that goes around the negotiation of perhaps giving those masters back or increasingly share

of the income the arts takes. So there's actually something relatively untested because there's a few examples of some smaller ats doing it, but it's always been used as a negotiation tactic, a sort of nuclear option, and no one until Taylor has actually sort of pulled that option. So it will be interesting to see because it does raise a mini questions. So just I'm Taylor Swift real quickly.

In theory, if she were to re record all of her own all of her old albums, and theoretically she would like I don't know, release them as new albums, albums or something, the fans might stream those, in which case she would get some streaming revenue from that. But then the owner of those original masters would get some sort of licensing revenue, as they would from any other cover.

So yeah, they whoever owns the end lining publishing assets, and typically in the industry, um the artist retains ownership or at least for long and the long term, the

artist will retain any ownership of those publishing interests. And this is what you might see a lot of these headlines, is that a lot of the big catalogs being sold a people even heard before because they're actually the songwriters behind these songs and that's the sort of the really unique I p and that's some sort of the more the air of the music industry which is not as prominent, which is but we're on the very valuable ap is.

So actually, Alis, this would be a good spot because you mentioned you are a lawyer, but or you were previously a lawyer. What do you just tell us sort of real quickly for listeners, how you got into this space and the sort of like broad trajectory of how you got here in this moment to be a MU

consultant and expert in music valuation. Sure, so, I was actually originally a corporate lawyer in New Zealand, where I grew up, and I moved to New York about eight years ago to study music business at n y U. And while I was at n y U, I actually had a lot of spent a lot of time in the music publishing industry, including one publisher that was sort of acquiring a lot of copyrights, and eventually after moving back to London working on the legal side at Universal Records,

I worked at a company for the about three years called twenty three Capital, which was lending into the space um leaning against back catalogs rather than purchasing, and I had the sort of experience of doing the analysis of the royalty statements and yeah, to provide a little bit of detail that these statements that you know, half in your statements around could be a thousand line a thousand

lines of excels. So the very detailed and sort of specialist and then like knowledge needed to go for these. So I've sort of had the royalty analysis siety as

well as having an understanding of the contractual relationships. So at twenty three Capital I was doing a lot of analysis of the underwriting essentially of these catalogs, and a lot of music education, a lot of music education seminars to our investors um and yeah, no, I'm just sort of doing it on a freelance basis and in particular working with a lot of artist teams who are suddenly catalog to get a sense of value and to sort of put the materials to give in a nice way

to seek interest because a lot of the diligence and financial and these catalogs are very not only very specialized, but very large, and that's sort of something which has been understood in the industream. We have found a good niche in the last last year or so. So you mentioned working with artists teams, and I'm curious if in your mind there seems to be a sort of shift in sentiment towards selling catalogs. So my understanding is that, you know, selling your catalog used to be something that

artists were told never to do unless absolutely necessary. But nowadays, because there's this sort of growing financial infrastructure around music assets, artists are starting to feel a bit different and they're starting to feel if they sell the rights to their music they could still get some income, but maybe a specialized player could do a better job of promoting the catalog or you know, selling it for commercials and things like that and make money that way. Do you sense

that that shift underway? Definitely see that shifts. So I think when I first started the industry and artist selling the catalog was it was your typical dift divorce Texas scenario where there was a very immediate need for liquidity, and that was usually the reasons where is artist Kellogg's for salt. I think now there's a lot more interest

in the in the in the space um. Artists are getting probably a lot more fairer prices for their catalogs and it's sort of made artists and their managers think about things like a state planning and a lot of these, especially all these older artists, it's almost like a legacy

management scenarios. So one really good example is a company called Primary Wave, which has worked with board interests in the likes of Ray Charles and states like that, where they actually sort of it's sort of a way to the buy, They sell a partial interest, and that company takes over the marketing and the social media and sort

of the legacy management of those catalogs. So it's definitely, um, the interest is sort of let those people, artists and managers make those decisions from you know, I'm effectively selling my my pension plan, but is it better for me

to have this cash right now? And I think it's made that more of an optional decision round of than a last you know, worst case scenario decision, where that was sort of typical reasons for natis was suddenly a catalog, right, So previously it was a sort of desperate thing or some some liquidity need a divorce or something like that, and now it's just oh this, you know, it's more cash in hand versus you know, you know, one in the hand too in the bush, I guess kind of thing.

Is there any artistic loss with this? So like someone like Shakira or Bob Dylan selling their catalogs, do they take any artistic risks? Do they still retain any control over how their music is used? Like what? What? Or is it just a financial transaction. So that goes back to the legal question I was talking about, by what rights you buying? And you can buy the rights, you can buy a passive interest and the cash flows coming from a catalog, but you can buy the end of

laying copyright. So in theory, if you bought anout of sunderline copyright without any specific provisions, you could license set out to whatever TV show you wanted, you could you know, put out a deluxury issue with all of the sessions. So it's that's why it's quite an issue of are they buying control? And that's obviously the positive for an investor because they might see ways to increase you income

from from that catalog. But it's also a manner of negotiation for the clients trying to the artists, trying to retain sort of sort of control about how that catalog is exploited. Um, so that's sort of the the legal rights being purchased is a really important when the artist is considering that. So one thing I'm really fascinated by and we've touched on this already, but going back to the valuation question, Um, you know, it's it's one thing to try to estimate the cash flows from I mean,

all of these are called esoteric securitizations. When we're talking about intangibles like franchise and brand rights things like that. It's one thing to estimate the cash flow from a restaurant or you know, maybe fast food franchises, things like that, other exotic um assets. But it's kind of different to try to estimate cash flow from a song. When the popularity of music and you know, what's trending and what isn't tends to change quite quickly. How how do people?

How do people go about doing that? Because I mean I think few people were Joe is gonna hate me for saying this, but I think few people. For instance, we're expecting Fleetwood Mac to make this big comeback on streaming because people are sort of rediscovering the music. There, Um, there are other wh Why was I going to hate you for saying that because you like Fleetwood macr Oh, yeah, I like that, But I thought I thought you'd be

offended at the idea of people rediscovering them. Okay, fine, and then no, I'm happy people are and then I guess they can go the other way as well. Right, So Michael Jackson kind of um fell from favor due to well we all know why. And so you can see artists who are sort of unexpectedly unpopular at times. So how do people go about doing that kind of analysis? So it's sort of similar to looking at a company

where effectively you do a quality of earnings reports. So these reyalty statements can go back, um, you know, and get five to ten years of royalty history. Usually you get three to five. And what you're trying to look for in those earnings as what is what is the repeatable recurring income And as you mentioned, as are people still listening to this artist in the very repeatable way?

Given the nature of streaming, we're seeing a lot the calogs of the likes of the Fleetwood Maker, likes of those those Legacy X have actually experienced growth, which is really encouraging. Because of the sort of streaming environment, it's very much a case by case basis, but I think genuinely it's around the quality of the artists that a lot of those quality artists are experiencing growth. But one thing which is I guess the most difficult part of

doing such analysis is more recent content. So for example, if you've got a new release from a from a track album and that you've got three years of earnings, what's second to earn in the next ten years and what's the sort of decay there. That's been the really difficult part because if you've got a long period of three to five earnings, we see what you do see. A lot of these legacy care logs are very repeatable, recurring income, which is growing of the industry. That you

can get confidence of that. But it's quite difficult, um when you've got more recent content because I guess so historical earnings aren't necessarily reflective of the few consumption. So yeah, it's very much um a numbers game and sort of going into the analysis. And also I guess there is some sort of creative or a and our touched with the acquira might like theatist and might think they're relevant.

They might think that being underpromoted recently and they might think that they've got some cultural relevance going forward and they think they can sort of bring that back by using their own marketing and distribution. I think, you know, Jamie Powell over at ft Alphabelle has written about this. So you mentioned, like Drake, we don't really know like in ten or twenty years, the degree to which people will be listening to him. Someone like Bob Dylan. People

have been listening to him for decades. But you know, like when I was a kid and my parents would like listen to a Bob Dylan cassette in the car, And now I personally am a huge Bob Dylan fan. But on the other hand, when I'm in the car with my daughter, she probably has headphones on looking at something on her tablet. So do you worry about that like that like historical like patterns of these sort of

legacy acts. We're sure just these huge cultural forces that maybe like after a while, they just you know, do people worry like there's no my generation isn't going to hand down Bob Dylan the same way my parents generation did to me. Yeah, And that's to be honest, it's the most interesting part of doing this valuation worker is sort of steeping back and thinking about the artists and thinking about how confident you are they're going to remain

um culturally relevance. Going back to what I said before, one interesting angle was also consider the the business licensing aspect of a catalog. So for example, um, you know a song like U Be My Baby? How often is that used in the film? Or how often is Sweet

Dreams used in eighties film? And there's sort of were those those songs which have a market period of time through often news a lot and those sort of um circumstances, and that sort of we might be getting your confidence in that in that recurring income, or might even be more sources like commercial or rock radio, which you know still plays you know, sweet chearld of Mine all the time. It's sort of looking at those different sources and getting

a story. But but ultimately, after sort of doing all the analysis, that's what you're asking yourself is that would do I have it? Do I feel confident that this is an artist is going to remain significantly culturally relevant and you know, teen to twenty years time, because you really are looking at the long term of these assets.

So I just popped up Bob Dylan Royalties and Wall Street into Google, and I magically came up with an article that I had forgotten i'd written, but from two thousand twelve, and the headline is gold Goldman rethinks Dylan Royalties bond and the lead has a really bad um music joke in it. But it's investors have thought twice and decided it's not all right to take up an unusual bond offering back by royalties from songs and by Bob Dylan. So this was back in two thousand and twelve, Alistair.

What do you think changed between now and then to make in Masters and Wall Street more comfortable with these

types of structures and deals. I think, in particular, as we mentioned the sort of the state of the positive growth in the recorded music industry, one area which is sort of again in the details, is that, especially in the publishing side, these realities are very heavily regulated and they're actually prescribed by law how much you get paid per stream or how much you get paid per radio play, and those rates are actually being they get decided for

a five year period and they've been sort of moved upwards in recent times. So there is a lot of very confidence around that, and I guess, um, yes, it's very much the state of the industry. And I guess there's been some some early players in the game who have really proven the success of this model, because I think before, as you mentioned of the Bowie Bonds and the bobbed In an example, was very much sort of very esoteric, and there was always just sort of one

of them. But I think the number of players and also the well the education around that the sets combined of the positive industry has really got people a lot more comfortable. And to be honest, I've got people wanting to invest their time to understand all of the incasies of these assets. So we don't what's your guests, I mean, we don't actually know an official price tag I think on the Bob Dylan catalog. We don't know if an official price tag on the Shakia catalog. What do we

know about how much these are valued? What do people say and what is your sense of how big this business is right now? In total? What do we know about dollars here? Sure? I think um in terms of how they're valued that a multiple approach is often used as a shorthand end. You've seen multiples go from five years ago the range of ten to sixteen for publishing to twenty plus, so I think the range has gone up significantly. Um in terms of the overall market side

is you sort of have to make a distinction. So you've got the major labels, which are very much have big catalogs but also are in the game of new releases. And then you've got the calog acquirers, which the major labels referred to as chickbook publishing. And I think that space is actually quite limited because here's only so many Bob Dylan's, He's only only so many Neil Young's, and I don't think these caloggs. I don't think these many calogs of you know, the report of three million dollar

price range. So I think it's sort of there is a limitation to the size of the industry. I haven't sort of done the over analysis myself, but I think if you compare it to avorestic classes that it would be a sort of a smaller niche. So, given the evolution that you just described, music rights going up in value by quite a lot, do you think that the business case for streaming this idea that you know, music might be worth more because we can all listen to

it on Spotify and platforms like that. Do you think that's fully price into music rights now or do you think there's further to go. I think that's being priced in at the moment, and people are anticipating growth. Where the number were the historical numbers back that up. So continued growth from the streaming market and that you know, a physical sorry, a catalog which Hays for example, is streaming that in two or three years time, that's going to go to sixty to eight percent. That streaming is

going to become the dominant form of revenue generation. So I think that's what has been priced into these um large acquisitions and these larger multiples, is that people are you know, the large multiples represent large people's anticipated growth. And I think that the theory is, you know, and I think some people go early in the game, maybe three or three or four years ago, I have seen that they're paid to sixteen effectively with the revenue growing,

it's now via twelve times multiple. So I think at the moment it's definitely being priced into the into the numbers. Well, let me ask you, you know, as a consultant, Hey, do you do work for both the seller musicians as well as buyers and b what's the first thing so someone says some bands is all right, alistair, we want to sell our our catalog. What do you do? Tell me how like you you begin your process and sort of how you how you get to work? Sure, So

I work on both the buyer and sales side. So I work with a lot of artists teams who are looking to sell their catalogs and also do food party work for acquirers. So it's useful obviously to see both sides of that. And what I've seen from the last my experience the last few years is a lot more interests UM and a lot more bigger prices being paid UM. The second part in terms of what you ask for is yeah, the first question, UM, what what parts of

your kalog do you own? Which revenue streams do you have? UM? Do you have your master's or get paid at royalty? Do you do you write your own songs? Have you got your publishing And the next sort of point to go is to look into the the royalty statements that each of those income streams UM pay pay the artist and sort of aggregating that and getting a sense of the overall annual income, what titles are generating income, what

source of income is at radio? Is it streaming? And then I guess if you progress you go into the fun time. We're looking into the contracts to double check they actually own those rights and getting a sense of as I mentioned before, what are they selling. Are they selling the control of their catalog or they're selling a pass of rights and what are they comfortable with losing

control over? Is there any prospect in your review of a sort of um, someone has to be working on this, But essentially retail ownership, either in the form of a listed equity asset that perhaps held a bunch of these or you know, there's all these platforms that I always see advertised on Instagram. It's like buy a share of art, or buy a share of a race car, buy a share of a classic sneakers, is anyone doing buy your

share of Dylan's song catalog or anything like that? For imagine a lot of like this could be a popular retail class. Sure. So in the UK you've got both Hypnosis and Rental who are publicly listed. Now, so that's sort of um, I don't write that. Yeah, they're both publicly listed, So that's and that's the first time that I guess you've got a pure exposure to music catalogs because you can buy shares in um Vindy, which owns Universal Music. But again Universal Music is you know, in

the business of releasing new releases as well. UM. There's also smaller platforms where called one called Ruyalty Exchange, where you can buy and sell very small um, you know, lessan a million dollar royalty rights. So there's there's an emerging space, but it's one which is given the sort of the complications around the legal understanding and the royalty details, which is I think quite a tough break because it's

quite hard to um to make it very streamlined. But on the public market's both hypnosis and round tour leaving the charge, and I wouldn't be surprised to see in a few more joining that camp. So is there anything else I mean in terms of like what's next or what you're watching for the industry, anything else we should know about or pay attention to. UM, it's a good question. UM. I think yeah that this is one thing which I think the the I p O has been especially in

the UK. I'm not sure the specific reason. Maybe it's regaltory, but there's I think definitely UM investors looking for an exit apropate most of these UM One interesting elements of the of the industry is who are the investors behind these companies, And there's a lot of people have long term money. Is a lot of pension funds, So for example, the state Pension Fund of Michigan is has a founder of a company called Concorde which brought the imagined Dragons catalogs.

So there's often quite surprising owners of these assets who have those sort of long term that need for long term yield and pinsion funds and sort of very long term money is often what is behind these assets, and I guess being predominantly a family office pinsion fund pe sort of mark and I guess looking for the retail markets. The next step one for I was gonna one thing I was gonna say, I saw that you are a fan of the Bakersfield Sound, and is very surprising who

are who who who ends up owning these assets? So Will Haggard's some of his Masters is actually owned by Hasbro effectively, really how did that happen? So they acquired a company called Entertainment one UM recently which quite a one of the label which had rights to that, so effect to Lee Hasbro, you know, just Transformers owns Mill Haggen Masters and actually the biggest sort of headliners. They actually owned Defro Records, which is sort of two packing

sneep time. That's why I knew that was familiar with Hasbrow and music, and I couldn't remember. I knew it was like some really discordant thing that's hilarious. So they own all the death Row records. They do, so it's um, it's often quite interesting where those sets end up in the sort of there's investors actually behind the company which

is investing in it. And I guess one thing with my more sort of learning the financial market side of it more recently is I think that, yes, my retail market might be next, because it's always sort of been. I have a really long term money p money or sort of a very weird entertainment media slash company which happens to have which happened to sort of buy a catalog by buying by effectively you know, Hasboro trying to buy Um, it's a pepper Peak and Records just part

of that deal. So it seems very pepper Peg and death Row Records exactly. It's it's a great combo perfect well. Alistair, thank you so much for joining us, and I've been you know, I've been following this for a while. So great to get these questions answered. Yeah, Pivott, thanks so much of your time. And as I mentioned, so before we get twenty three capital ahead of me to the finance space. So I found your podcast sery helpful to sort of love who instant answer the market, and it's

sort of been been very helpful. Thank you so much, Thanks Joe, Thanks Tracy, Thanks alast That was really interesting, Tracy. I really feel like there's the retail the end, like you know, the song exchange, Like it seems like an obvious thing for people to just buy steaks and their artists.

You could even imagine like artists doing like a partial spinoff like selling or something like that, because I just feel like that's totally the thing these days, that like someone would just like want to buy on their phone. I think we should start a US equivalent of hypnosis and then we should start the all blots back and merge with it by it, you know, I know, we joke. Would that be fun? I mean, it would be very fun.

You know what, um we joke about like it's totally irrelevant to the question we just had, but just watching the number of like people starting specs now, it's crazy, like everyone we know, we're like the only people that happened the amount of money people are make anyway. Well, also, this wouldn't be the most unusual spack of the current cycle by any means m even if we were focusing

on what was once considered an esoteric asset. But this is also what's quite interesting about the conversation is again like I'm looking at work from eight years ago, and when people talk about music rights and music royalties, it all comes up under the umbrella of esoteric abs. It's supposed to be an unusual asset class that's getting bundled and securitized, And now I think it sort of makes a lot of sense, and it's becoming increasingly normal among

a certain subset of investors. And the other thing I've been thinking quite a lot about is so much of esoteric A b S is about valuing cash flows from sort of intangibles, so things like the value of a fast food franchise, UM, a catalog of movies and music, as we've just been discussing, and you can kind of see in a modern economy, I guess, where so much of the economy is predicated on those sorts of intangibles.

That kind of makes a lot of sense, Like you can see why that would be a growth category as opposed to securitizing the cash flow from you know, like a factory that's actually making things or a more traditional laundromat. Yeah exactly, No, I mean it totally makes sense. And it's like it's highly intuitive that intellectual property that can be licensed, and especially licensed on platforms that can collect

very predictable data. Like it's you know, like it makes sense to me why this asset class is sort of this particular one anyway, has really been associated with the rise of streaming, because you get that is the type of transaction, that is the type of thing where you can just sort of very easily translate a monthly check or a quarterly check into something that could be diced up and sold. Yeah, exactly. Do we leave it there? Yeah, let's save it there. All right. This has been another

episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe Wisn'tal. You can follow me on Twitter at the Stalwart. Follow our producer Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of podcast, Francesca Levi at Francesca Today, and check out all of our podcasts unto the Handle and Podcasts. Thanks for listening