Music Rights Investing with Sherrese Clarke Soares

Ever since I started Trapital, I’ve been fascinated by the growing distinction between fame and monetization. I often hear about musicians who make bank but are relatively unknown outside of their biggest fans. They can often earn more than bigger-name artists who are household names who need more chart-topping hits to recoup their advance.

At our summit, I talked to HarbourView Equity Partners’ Sherrese Clarke Soares about this dynamic in music rights deals and catalog sales. The firm often passes on deals when the artistsias more famous than their catalogs were lucrative.

Here’s a quote from the HarbourView CEO at our summit:

“There are people who have been uber-famous but the cash flows have not followed on the music side. They've gotten endorsement deals or been in a lot of film and television but the fandom for their music does not correlate as tightly.”

The distinction is important for HarbourView since it invests in the catalogs of contemporary artists. The average age of the songs in their portfolio is twelve years old. It includes artists like Bruno Mars and Wiz Khalifa. That’s a younger cohort of songs than most firms in the space. Gen Z and Alpha will have their own timeless music just like the Baby Boomers do. That focus relies on picking catalogs that are likely to age well, stream well, and won’t have steep decay curves.

There’s a profile of artists who are more famous than they are rich. A “stack,” if you will. They occasionally get “stopped” by TMZ at the airport. They’ve been repeat guests on VladTV. They may be more likely to take a check for Rolling Loud than to build their own tour. You might be able to pay them for a happy birthday shoutout on Cameo.

Fittingly, I had Cameo CEO Steven Galanis as a guest on our show in 2020 when the company was a unicorn. He talked about how Cameo specifically targeted public figures who were more famous than they were rich:

“We've really found product market fit for people who are more famous than they are rich. So being recognizable or being like a voice that you like or being a character from a show that you really like is almost more valuable than having LeBron James or Ariana Grande on who probably would be so expensive that most people wouldn't be able to hire them. And that's why that bottom-right, that less famous, more willing over more famous, less willing is so critical.”

A negative signal for music rights investing may be a positive signal for Cameo shoutouts! Sure, there are exceptions. Artists like Montell Jordan and LeAnn Rimes are on Cameo and made songs that investors would love to own, but the signal holds generally.

Luckily in music, a lot of streaming data is quantifiable. That’s helpful for assessing the value of an artist’s recorded music and masters. But it’s less correlated with rights that are more reputation-driven, like publishing, name, image, and likeness. These reputation-driven rights may be more likely to correlate with fame though. Unknown artists don’t get biopics, let alone sync placements in a popular Netflix series.

This is where the job is both art and science. One metric that HarbourView looks to measure is touring. The firm holds assets of 25 active artists who were on tour as our recording in October 2024.

How often they tour matters, but how well do those shows sell? Hard ticket sales are the closest acid test of an artist's true fandom and longevity. We’re still in the post-pandemic touring surge now, so a lot of artist’s touring numbers may be especially high, but it’s a hard metric to inflate for long.

You should listen to the full conversation I had with Sherrese at our Trapital Summit here. We talked more about the bridge generation, investing in movie and multimedia rights, and more.

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