Investing in music royalties: a guide to common questions, risks and how to navigate them

Investing always comes with a degree of uncertainty. It’s perfectly normal to have questions when you're trying something new — especially if it's your first time investing or if you’re exploring a new asset class like music royalties. 

We often meet first-time investors who are curious yet rightfully cautious. They ask us, “Is it safe to invest in music royalties?” “What could go wrong?” “Could I lose my money?”

In this guide, we’ll break down some of the risks of investing in music royalties, explain why your questions make sense, and show how you can face them using ANote Music’s tools and resources.

Why investing in new assets can feel intimidating: six most common doubts

The hesitation around investing is often tied to uncertainty and lack of knowledge, among other factors. For music royalties, we’ve noticed six recurring concerns among new investors that we’ll be analysing through this article:

1. I don’t know how music royalties work — Lack of knowledge or information
2. How do I know the platform is legitimate? — Trust and platform credibility
3. Are music royalties actually profitable?  — Not making enough money 
4. Could I lose my money? — Risk of loss
5. What if I need to sell? — Lack of liquidity
6. What if returns drop over time? — Performance risk

These are reasonable questions. Let’s look at each of them in context:

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1. I don’t know how music royalties work: Lack of knowledge or information

We understand that royalties can feel abstract at first and if you just started learning about it, it’s normal to not know where to begin. 

First, let’s define what investing in music royalties means: Music royalties are a rising category within alternative investments, giving you access to a share of the revenue that songs generate when they’re used. When you invest in royalties, you’re acquiring the right to receive a portion of the income a song earns every time it’s streamed, played in public, broadcast, or licensed.

These songs are typically grouped into music catalogues, which are collections of songs owned,  fully or partially, by the same rights-holder (an artist, composer, label, or publisher). Think of each catalogue as an individual asset: instead of buying shares of a company, you’re investing in a portfolio of songs that generate royalties. Do you want to learn more about royalties? We invite you to explore our dedicated article explaining what music royalties are and why they matter to investors.

You may say “ok, I see what royalties are but, where do I go from here?”. Investing, in any kind of asset, requires a proper level of understanding and analysis. The good news is that you no longer need to be a music industry expert to make your way into the investment in music royalties world. At ANote, we have made it a priority to offer clear educational resources, market data, explanations and tools that have already helped many of the current investors on the platform — who also started from “zero” and had the same questions when they first joined — understand the dynamics of royalties and music catalogues.

Music catalogues, like other assets, have data that helps to analyse them, such as yield, price charts or an order book but, beyond numbers and charts, we provide you with a full range of resources to support learning and decision-making, including:

• Investors booklet
• Complete guide the investors about ANote 
• Our Support Centre 
• A dedicated learn section in the platform 
• Our dedicated Customer Support Team at support@anotemusic.com 

With access to these resources, understanding how royalties and music catalogues function becomes easier, helping new investors make informed decisions.

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2. Is ANote Music legitimate?: Trust and platform credibility

Trust is essential when you’re dealing with something intangible like music rights. Investors want clear documentation, verified catalogues, a secure platform, and a real team they can rely on.

At ANote Music, we apply rigorous due diligence to every catalogue before it’s listed on the platform. We verify ownership, royalty history, sources, and distribution chains. Catalogues are backed by contracts, official royalty statements, and documentation from recognised industry players. Catalogues that don’t pass our requirements, simply don't get listed.

Since our launch in 2020, we’ve partnered with established rights-holders, distributors, publishers, labels and professional industry players. Additionally, all payment transactions on ANote Music are processed through Mangopay, a regulated financial institution based in Luxembourg and supervised by the CSSF (Commission de Surveillance du Secteur Financier).

When it comes to the security of your account, it’s important to clarify that we don’t manage your portfolio or make decisions for you. You’re always in control of what you buy, hold, or sell. Our role is to provide the infrastructure — a marketplace where everything is traceable: every catalogue, payment and transaction is verified.

Today, over 40,000 investors trust our platform. If you’d like to hear from some of them, we invite you to read their experiences directly on Trustpilot.

We believe trust isn’t built only through paperwork: it’s also human connection. We pride ourselves to have a dedicated team always available to answer questions about your payments, account security, or how the platform works. 

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3. Are music royalties actually profitable?: Not making enough money 

The idea of earning through music — something we all enjoy every day — is appealing. But many first-time investors wonder: will the income be consistent? And is it enough to make a difference?

Music royalties can generate returns. In fact, the music industry, and the royalties it generates, has seen a steady growth in recent years. According to Spotify’s 2025 Loud and Clear industry update, streaming platforms continue to fuel a robust royalty ecosystem — with Spotify alone paying out over $10 billion in music royalties in 2024. This steady growth in royalty payments shows that the underlying revenue stream behind music rights remains not only active but expanding, reinforcing why royalties can represent a meaningful source of long-term passive income for investors. However, like any other asset, results vary. 

As a general rule in the industry, music catalogues are typically priced to offer royalty returns in the range of 6% to 16% per year. 

On the ANote Music platform, the gross average internal rate of return (IRR) achieved across all investor activity between 2020 and 2025 was approximately 10%, based on a weighted average across all catalogues. This figure includes both royalty income and price performance, assuming full reinvestment of royalties. This is based on historical data and does not guarantee future results or reflect the outcome of any individual catalogue.

While some catalogues have delivered strong royalty payouts and stable resale value, others have shown more modest or inconsistent performance — especially when market demand or song popularity declined. Beyond the performance of each catalogue, profitability also depends on your portfolio diversification, as well as the numbers of shares you purchase and the royalty payment frequency of your catalogues. 

Royalty income tends to build up gradually, making this a source of passive income over time, rather than a fast-return strategy. What matters most is setting clear expectations, diversifying wisely, and using the available data to support informed decisions.

Please note that this information is for educational and statistical purposes only and should not be considered as financial advice.

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4. Could I lose my money?: Risk of loss

Every investment carries risk, and music royalties are no exception. Yes, you can lose money.  But understanding where that risk comes from can help you manage it.

Buying catalogue shares on ANote Music means two things at the same time: 

1. You earn royalty income for as long as you hold the shares. 
2. In parallel, your catalogue shares have a market value that can fluctuate up or down based on demand, catalogue performance, and general market sentiment.

Let’s see an example, if you buy shares in a catalogue at €10 each, their price could rise, for example to €11, if the catalogue does well, or fall to €9, if royalty performance goes down. These movements are usually gradual and driven by normal market behaviour, rather than sudden swings. Also remember that as long as you hold the shares, you continue receiving your royalties regardless of the current trading price.

Even if your intention is to hold shares long term and only collect royalties, it’s good practice to monitor the value of your portfolio, including the unrealised gain or loss.

If you’re not familiar with the “unrealised gain or loss” concept, it represents the difference between the price you paid for your shares and their current market price — as long as you still own them.

• If the price has increased: you have an unrealised gain.
• If it has decreased: you have an unrealised loss.

Let’s go back to the example above of the €10 per share: Imagine you buy 10 shares of that catalogue. If the price rises to €11, your unrealised gain is €10 (10 shares × €1). If the price falls to €9, your unrealised loss is €10.

Understanding unrealised gains and losses helps you make sense of the performance of your portfolio. Until you sell, any increase or decrease in value is simply an indicator of where the market stands at that moment. It only becomes a realised profit or loss once you decide to sell. In the meantime, you still own the underlying rights to keep collecting royalties.

Deciding when to sell (or buy), requires some analysis. To help with that process, we developed the Investors Protection Program (IPP). The IPP provides alerts on factors such as sudden price movements, limited liquidity, or catalogues with returns dropping below healthy levels. While the IPP cannot eliminate risk (no tool can) it gives you clearer, timely information so you can act with more confidence rather than uncertainty.

The reality is that catalogue prices can move up or down based on demand and performance. Movements can be reasonable or noticeable at times: that's how markets work. What helps investors manage this is having clear data, diversification options, and tools that make it easier to monitor their exposure. Our role is to give you that visibility so you can make informed decisions at the right moment.

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5. What if I need to sell?: Lack of liquidity

Wanting the option to exit an investment (liquidity) is perfectly reasonable. Although traditional financial markets provide constant trading opportunities, music royalties operate differently.

To address this, we have created the ANote marketplace, where investors can buy and sell shares in over 30 active catalogues. This means you’re not locked in indefinitely.

That said, enhanced liquidity does not mean guaranteed liquidity. A sale depends on market conditions and on whether another investor is willing to buy at your desired price. This is why it’s useful to monitor the order book, which shows current buy and sell offers and gives you a clearer picture of market activity.

The Marketplace gives you flexibility: you can rebalance, exit positions, or take new ones as your strategy evolves. Like any open market, pricing and demand matter, but with clear data and a transparent order book, you can decide on your own terms.

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6. Can returns drop over time?: Performance risk

Royalty income fluctuates, because it is tied to the popularity of songs. So yes, returns can drop as they can rise. While a catalogue might perform very well today, its future performance will evolve. Think of a song’s life cycle as a curve that often spikes shortly after release, then declines, and then may stabilise at a consistent level. Mature catalogues — those with older songs — tend to be more on that stable phase than the younger ones. 

At ANote Music, we have a variety of catalogues ranging on different life-stages. We aim to list catalogues where royalties have demonstrated consistent performance over the last 3 to 5 years, favouring those with reliable, proven revenue over short lived hits.

To help manage performance risk, many investors use diversification as a way to reduce exposure to volatility. On ANote Music, you can spread your purchases across different catalogues, artists, and genres. For example, some investors choose to combine shares from K-pop catalogues — a genre we explored in detail in our article about how K-pop became one of the most influential music genres — with shares from electronic or pop catalogues.

Another option for diversification is the Bundles, packages composed of a mix of shares from different catalogues available on the platform. Bundles offer a faster way to diversify, without the need to place multiple individual orders. While they can help spread exposure, it’s important to review the catalogues in the Bundle and to keep in mind that past performance of any individual catalogue does not guarantee future results.

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So, how does ANote Music help you mitigate some of the risks?

While no investment is completely risk-free, our goal is to provide an environment where investors can make informed, confident, and data-driven decisions.

We do this by:

• Offering education and transparency so investors fully understand the mechanics of royalties.
• Applying strict due diligence to ensure rights verification and legal security.
• Prioritising catalogues with a proven track record.
• Providing an active marketplace for flexibility and liquidity.
• Allowing diversification through individual catalogues and Bundles.

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Final thoughts

Getting started with something new can feel intimidating — especially when it involves your money. But most concerns are often mitigated once you have the right information and tools to make confident decisions.

Music royalties offer a unique opportunity to participate in a growing creative economy while earning from an asset class that behaves differently from traditional markets.

At ANote Music, we believe that transparency and education are key to making informed decisions. By taking time to understand the risks, diversifying carefully, and staying informed, you can determine whether music royalties have a place in your portfolio.

If you’d like to learn more about how it works, our team is always here to help you explore your first investment step by step.

* Disclaimer: Nothing in this article is investment advice; always consider your circumstances and risk tolerance.

Historical data does not guarantee future returns and should not be considered financial advice. Like all financial opportunities, music royalties carry risk. Catalogue performance can vary, and there are no guaranteed returns. Always review historical data and platform information carefully.

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