Music Valuation Rating System
How does Adaggio Forecasting's rating system work?
As the music industry continues to evolve and adapt to changing technologies, the value of a music catalog has become an increasingly important consideration for artists, labels, and investors alike. However, not all music catalogs are created equal, and it can be difficult to accurately assess the quality and potential value of a given catalog.
To address this challenge, a music catalog valuation rating system has been developed to provide a more nuanced and comprehensive analysis of music catalogs. This rating system takes into account a variety of factors that are known to impact the value of a catalog, including the size and diversity of the catalog, the licensing arrangements, the potential for future revenue streams amongst other KPIs. The aim of this system is to provide a broader perspective of risks and characteristics:
Multiple of the total revenue from the last 12 months, based on annual decay of songs.
The lower the decay, the higher the multiple, and vice-versa.
Amount of paying sources and fidelity of reports.
How many different revenue sources and quality of the information and data.
Song Revenue Concentration
Total revenue distributed by songs.
How many different songs earn the most amount of revenue. If there are many songs with big earnings, the concentration and risk is lower.
Total sync revenue and variety of sync categories.
Whether there is a relevant % of income coming from sync, and from which categories: advertisement, movies, tv, digital, etc.
Amount of recordings.
How many different recordings in the catalog, and from how many different artists.
Overall, the music catalog valuation rating system provides a valuable tool for investors, labels, and artists to better understand the value of their music catalogs and make more informed decisions about their music business strategies. By taking a comprehensive and data-driven approach to catalog valuation, this system can help to identify high-value catalogs and unlock new opportunities for growth and success in the music industry.