How ANote Music selects music catalogues

Every music catalogue that reaches the ANote Music marketplace begins with an onboarding discussion with a rights holder or another party entitled to the relevant royalty income.

The review is not simply about the songs themselves or how well known they are. It focuses on the specific royalty interest being proposed for listing: the rights and contractual arrangements supporting it, the historical royalty income associated with those rights, the party entitled to receive that income, whether the relevant royalty entitlement can be transferred or otherwise structured for the proposed listing, and whether the corresponding royalty payments can be collected and distributed through the marketplace.

Before a catalogue is listed, ANote therefore carries out a structured review of its historical royalty performance, underlying rights and contractual arrangements, payment structure and valuation.

This article explains that journey, from the initial documentation and analysis to the information made available when a catalogue is listed. The process provides users with a documented basis for their own assessment, while recognising that historical royalties cannot predict or guarantee future performance.

Who can present a catalogue to ANote?

Catalogues can be presented by individuals or companies entitled to receive music royalties, including songwriters, producers, recording artists, publishers, record labels and estates.

The royalty income proposed for listing can arise from different rights and contractual arrangements, including publishing rights and songwriter royalty entitlements, master recording rights, neighbouring rights and contractual producer royalties.

Depending on the catalogue, royalties can be collected through one or several distributors, publishers, collective management organisations or other paying entities.

A catalogue can consist of a single work or recording, or a collection of works and recordings.

What is made available through ANote is a defined percentage of future royalty income associated with specified rights and contractual arrangements. For royalty-interest listings, this does not by itself transfer ownership of the underlying songs or recordings.

Rights holders can propose the percentage of their future royalty income they wish to make available while retaining the remainder. The final structure of the proposed listing can also depend on the characteristics of the catalogue, the rights involved and the arrangements agreed through ANote's onboarding process.

The precise documentation, rights and payment arrangements can differ from one catalogue to another, which is why these elements form an important part of the onboarding review.

From initial review to listing: how the process works

The onboarding process moves through several stages.

ANote first reviews the available documentation and historical royalty information before examining the catalogue's performance, the underlying rights and contractual arrangements, and its valuation.

Together, these stages provide the basis for determining whether ANote and the rights holder can move forward towards a listing on the marketplace.

Step 1: Initial screening and documentation review

The first step is to establish what is being proposed for listing and whether sufficient information is available to assess it.

ANote reviews the type of royalty income involved, the works or recordings included in the catalogue and the available historical royalty statements.

The review also considers the general size and characteristics of the royalty income and identifies the distributors, publishers, collective management organisations or other entities responsible for making the relevant payments.

Where applicable, ANote also examines whether royalty payments are subject to recoupment against outstanding advances. An unrecouped advance can affect how much royalty income is currently payable to the rights holder and how a proposed listing can be structured.

Only catalogues supported by sufficient and verifiable information can progress to preliminary analysis.

Step 2: Preliminary analysis

Once sufficient information is available, ANote analyses the catalogue's historical royalty performance in greater detail.

Rather than focusing on a single annual figure, the review considers how royalty income has developed over time and which sources have contributed to that income.

This includes the maturity and lifecycle of the catalogue, trends in historical royalty income and the degree to which royalties are concentrated among individual works or recordings.

ANote also examines how royalty income has been distributed across different sources, categories and territories, including streaming, radio, public performance and synchronisation.

The analysis considers the consistency of historical royalty income and the reasons behind material fluctuations. Particular attention can be given to exceptional or non-recurring items such as individual synchronisation placements, catch-up payments, accounting adjustments or unusually strong release periods, because these can materially affect the income reported for a particular period.

Together, these elements provide a more complete picture of the catalogue's historical royalty profile and form part of the basis for its valuation.

They do not provide a forecast of future royalty income.

Step 3: Rights and legal due diligence

Historical royalty income is relevant to a proposed listing only when the rights and contractual entitlements supporting that income are sufficiently clear.

ANote therefore reviews the relevant legal and contractual documentation to establish the rights holder's entitlement to the royalties being proposed for listing.

This includes examining the scope and duration of the relevant rights and royalty entitlements, together with contractual restrictions, existing claims or other provisions that could affect future royalty payments.

Depending on the type of royalties involved, supporting documentation can include recording or production agreements relating to master recordings, as well as publishing, affiliation or other agreements governing royalties administered by publishers or collective management organisations.

The review also considers whether the relevant royalty entitlement can be transferred or otherwise structured for the proposed listing and whether the associated royalty payments can be collected and distributed through ANote.

The objective is to establish clearly what economic entitlement is being proposed, for how long it applies and how the corresponding royalty payments can reach holders of catalogue shares.

Step 4: Valuation

Once the preliminary analysis and legal review are complete, ANote applies its internal valuation model to establish a reference range for the catalogue.

The model has been developed through several years of quantitative research and analysis of music-industry transactions. It considers factors including historical royalty income, the regularity and composition of cash flows, the maturity and historical performance of the catalogue, concentration, the balance between recurring and exceptional income, and relevant market benchmarks.

This assessment informs the discussion between ANote and the seller regarding a target valuation and proposed offering terms.

One measure used in this process is the entry multiple. In simple terms, the entry multiple expresses the relationship between the catalogue's target valuation and the annual historical royalty figure used as a reference.

For example, if that annual historical royalty figure is €10,000 and the target valuation is €100,000, the corresponding entry multiple is 10x.

The appropriate multiple depends on the characteristics of the catalogue. A mature catalogue with a longer and comparatively stable historical record may support a different multiple from a younger catalogue whose royalties have shown greater recent fluctuations.

The entry multiple is calculated by reference to historical royalty income. It does not represent a forecast of future royalty income or investment performance.

If ANote and the seller cannot agree on a target valuation and offering terms supported by the available information and the catalogue's characteristics, the catalogue may not proceed to listing.

Where a catalogue does proceed, valuation and transaction price remain distinct concepts.

An entry price is established for the Primary Market auction, while the final clearing price is determined through participant bidding in accordance with the auction mechanism.

Subsequent transaction prices on the Secondary Market are established when compatible buy and sell orders are matched.

Valuation therefore provides a reference framework. It does not determine future transaction prices.

Why might a catalogue not proceed to listing?

Not every catalogue reviewed during the onboarding process ultimately reaches the marketplace.

Moving forward requires sufficient information, a workable legal and operational structure and proposed terms on which ANote and the rights holder can agree.

A catalogue may not proceed because the available royalty statements or supporting documentation are insufficient to complete the assessment.

Legal or contractual provisions may restrict the royalty entitlement being proposed or affect its transferability.

Operational considerations can also matter. For example, an outstanding advance may remain unrecouped, or the existing payment arrangements may not be compatible with the collection and distribution process required for the proposed listing.

Valuation can be another factor. ANote and the rights holder may have different expectations regarding the target valuation or proposed offering terms. If those expectations cannot be aligned on terms supported by the available information, the parties may decide not to proceed.

A decision not to proceed can reflect the documentation available, the legal or operational structure, the timing of the proposed listing or the absence of agreement between ANote and the rights holder on the proposed terms.

It does not necessarily reflect the artistic or commercial quality of the music.

What information is available once a catalogue is listed?

Once a catalogue is listed on the ANote marketplace, users can access information intended to support their own assessment of the catalogue and the royalty interest being offered.

Depending on the catalogue and the rights involved, this can include an overview of the catalogue and rights holder, information on the works or recordings included, the types of rights and royalty streams involved, historical royalty performance and the indicated frequency of royalty distributions.

Users can also review information on historically top-performing titles within the catalogue, the listing term and financial information relating to the offering, including the entry valuation and entry multiple where applicable.

Together, this provides a documented view of the catalogue, the royalty interest available and its historical performance.

It does not provide a forecast of future royalty income or investment performance.

Historical royalty performance describes past outcomes and cannot predict or guarantee future performance.

What happens after a catalogue is listed?

ANote's involvement continues after a catalogue has been listed.

The platform receives royalty payments from the relevant distributors, publishers, collective management organisations or other paying entities and reconciles the amounts received with the percentage of royalty income made available through the catalogue.

Where necessary, ANote reviews and addresses material discrepancies in royalty reporting or payments.

It then calculates the amounts attributable to holders of catalogue shares and distributes the corresponding royalty payments. Each distribution becomes part of the catalogue's historical distribution record.

The timing of royalty distributions depends on when the relevant paying entities report and transfer royalties to ANote.

Depending on the catalogue and its payment sources, distributions may occur monthly, quarterly, semi-annually or according to another schedule.

This ongoing process provides a record of royalties actually received and distributed over time.

As with the historical information available at the point of listing, subsequent royalty distributions describe past payments. They do not indicate or guarantee the amount or timing of future royalty income.

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This article is provided for general information and educational purposes only. It does not constitute financial or investment advice, recommend specific investments or catalogues, rank assets or suggest what belongs in any individual portfolio.