Publishing: Drake’s Platinum “Fire & Desire”

Description

Invest in publishing royalties from this catalog highlighted by Drake’s Platinum hit “Fire & Desire.”

Released in 2016, “Fire & Desire” peaked No. 30 on Billboard’s Hot R&B/Hip-Hop Songs chart and has nearly 120 million Spotify spins to date. Interestingly, Drake sampled a portion of Brandy’s 1994 hit “I Dedicate” in “Fire & Desire.” The song was released on Drake's 4x Platinum album Views. The album itself was nominated for Album of the Year as well as Best Rap Album at the 2017 Grammys.

“Fire & Desire” brought in 78% of this catalog’s earnings last year. As the winner of this auction, you will collect the publisher's share of sync, mechanical and public performance royalties. The largest income source for this catalog historically is mechanical royalties — royalties earned when music is either physically sold (CDs), downloaded (iTunes), or streamed online (Spotify). These mechanical royalties make up 60% of earnings for this catalog to date.

Finally, also included are few songs from R&B group Somethin' for the People -- most notably the Platinum-selling “My Love Is The Shhh.” As well as Brandy’s “I Dedicate,” which was sampled in Drake’s “Fire & Desire.”

Key Drivers

Income Mix. The winner of this auction can receive income from three different royalty streams:

• Mechanical: Royalties paid to songwriters and artists when music is sold (think CD or vinyl) but also when music is streamed (streaming mechanicals) “on-demand” (like Spotify).

• Performance: Royalties paid to songwriters when music is performed publicly. Music played over the radio, in a restaurant or bar, or over a service like Spotify or Pandora is considered a public performance.

• Synchronization: Royalties paid to songwriters and publishers for the licensing of a song in music for a movie, TV show, or commercial.

This catalog’s income mix is fairly evenly split between mechanical and performance royalties. The majority of income in the last year has come from mechanicals at 54%, with performance royalties right behind at 44%.

Increased Mechanical Rates. The US Copyright Royalty Board recently raised the rates digital music services must pay for mechanical royalties by nearly 44% over the next 5 years. Historically, this catalog has earned the 60% of its revenue from mechanical royalties. As the winner of this auction, you will benefit from the mechanical rate increases for the next five years.

Drake’s Massive Popularity. Drake just recently released a new album and is actively touring through November 2018. While the new songs are not included in this auction, the release of new music and active tours reengages existing fans and draws discovery among new fans. Drake also happens to rank No. 1 worldwide on Spotify's most-streamed artist list with nearly 46+ million monthly listeners.