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Eric Schleien discusses value investing, rational investment analysis, and vital mental models.
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Wednesday Sep 16, 2020
Wednesday Sep 16, 2020
To watch this episode on YouTube, click here.
Summary
The music industry is growing for the fourth consecutive year, driven by the rise in online streaming. Platforms like Spotify, Youtube, Amazon Music, Pandora, and others are revitalized the industry which presents an opportunity to acquire intellectual property rights that pay royalties each time a song is streamed. Companies like Facebook, TikTok, and SnapChat have also recently announced that they will start paying royalties for music that is being used on their platforms which will only further increase the value of royalties are new users are starting to upload videos. The ICM Crescendo Music Royalty Fund (the “Fund”) is positioned to acquire songs in the $100,000 to $5 million range based on analyzing data such as historical royalty revenue and factors like artists tour schedule, number of playlists a song is on if the artists are releasing songs in the future, amongst other variables.
Data Analytics
To efficiently and objectively evaluate acquisition opportunities, the ICM Investment Management Inc. (the “Manager”) has developed an algorithm that will offer support in the acquisition process of material catalogs. Currently, 18 different input variables are analyzed to help predict the number of future streams of a particular asset. While machine learning mechanisms come to a conclusion without human intervention, a live tech expert will determine which input variable is useful and will place weights on each. While the model generates a certain prediction, the way we weight the variable will influence the anticipated future income streams.
Partnership
A Canadian music royalty fund was launched under the partnership between the Manager and Crescendo Royalty Corporation as an advisor to the Fund. Investors now have an opportunity to own music royalties and benefit from the rise in music and video streaming, generate incremental income, and have fun while doing it.
ICM Asset Management was founded in 2003 and currently has over $1 billion in assets under management in real estate and venture capital investments. Crescendo Royalty Corporation has been acquiring royalties since 2017 with interest in hits like LaLaLa by International pop star Shakira who performed at Super Bowl LIV and Blame it on the Alcohol by legend Jamie Foxx.
Additionally, Devo Harris was brought on as an Advisor and he is a Grammy Award-winning producer and songwriter who discovered, signed, and produced EGOT winner John Legend and has written for Kanye West, Britney Spears, Aretha Franklin & more.
Own Your Favorite Song
On the ICM Crescendo Music Royalty Fund website, you can submit a song you would like to own. The team will track down the rights holders and will attempt to acquire an interest in the song you submit. By investing in the fund, you can therefore potentially own a piece of your favorite songs.
Make Money While Listening to Music
The Fund also has a Spotify playlist so you can track all the songs they have acquired. If you listen to the playlist, the Fund will also make money every time you listen to a song on the playlist. To follow the playlist click this link.
How to Invest
Canadians are able to invest into the Fund directly through the Manager or through their own investment advisor.
US residents who are accredited investors can invest into a Delaware based Limited Partnership.
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