Many commentators have addressed the apparent decay of value in the music industry, but there is increasing contrarian evidence that musical IP is actually more resilient than other parts of the economy—particularly since COVID-19.

One of the main drivers of dependable value in a music catalog has been the recent profitability of streaming, which has triggered expectations of higher cash-flow growth, according to this new academic report. Music royalties in this new model are recurring and more predictable (similar to what a business valuation expert might expect from asset classes such as real estate). Shot Tower Capital’s managing partner David Dunn notes that music industry revenues also have a low correlation to economic activity (they note that Justin Bieber just sold his music catalog rights at a high multiple). A 2021 report by Shot Tower Capital explains that “music assets have generally experienced non-correlated growth throughout various market cycles.” Moreover, consumers continue to spend on music during recessions. In times of economic instability, music provides stable cash flow—though rising interest rates may be causing a “general cooling-off” of the catalog market, along with many other parts of the UK economy.

For some insights into the valuation of a music catalog, Dunn discussed the valuation of Michael Jackson’s music catalog during a 2021 BVR webinar.

The second edition of The Valuation of Digital Intangibles by Roberto Moro Visconti includes updates that address the metaverse, cloud storage, multisided digital platforms, ESG compliance, and more. Roberto is a professor of corporate finance at the Catholic University of the Sacred Heart in Milan and is the owner of Studio Moro Visconti (chartered accountants). Among his other recent publications are these recent titles: “From Physical Reality to the Internet and the Metaverse: A Multilayer Network Valuation,” “The Valuation of E-Health and Telemedicine Startups,” and “Digital Art Valuation.”

Among many other resources, the BVResearch Pro platform contains the full archive of the Business Valuation Review, the journal of the American Society of Appraisers (ASA) going back to 1982. The Summer 2022 issue has been added to the platform, and it includes these articles:

• “Double Backsolve Remains Unsupported” (Eric Sundheim, ASA; Ben Towne, CPA/ABV; and Jeff Faust, CVA);

• “The NICE Method Theory and Application” (William H. Frazier, ASA); and

• “Most States Reject Discounts in Appraisals and Oppression Cases—But There Are Important Exceptions” (Gilbert E. Matthews, MBA, CFA).

If you are not a subscriber to the BVResearch Pro platform, you can do a stand-alone subscription to the ASA’s BVReview if you click here.

16-17 February: ICAEW Advanced Valuation Techniques, two days, virtual classroom (repeated 1-2 June 2023)

24 February: Discount Rates in a High Inflationary Environment, ICAEW webinar, 13:00

30 March: BVIUK Fiscal Valuation With Andrew Strickland, virtual, 17:30

11 April: ICAEW Practical Business Valuation, four days, virtual classroom (repeated 21 June)

27 April: BVIUK SaaS-Sy Valuations: How to Confidently Approach the Valuation of Software-Enabled Businesses With Mike Blake, virtual, 17:30

20-21 September: ICAEW Valuation Conference, virtual, details to follow

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Want to share a news item? Have feedback or comments? Please contact
David Foster at ukeditor@bvresources.com.