Overvaluing your music

Not everyone's music catalogue will appreciate.

Overvaluing your music

One mistake I often make while being independent is focusing too much on the value of my music copyright and too little on actual cash income.

It's a sexy story to tell myself that the tunes I write and the recordings I make will be worth something and that I'll own it all.

However...

I can't forget the need to make a living in the meantime. Sometimes working for hire is the right thing to do.

Additionally, there's a chance that I'm wrong about the future value of my copyright. What if the whole landscape shifts?

Or a more banal question—what if it just doesn't have the staying power that I hope it will have? I don't even know how I would know whether or not my music has staying power.

I invest in a few things, including index funds. Maybe, at least regarding the bottom line, my music catalogue is just another one of those things.

I thought about this topic again after catching up on some podcasts. Dame Ritter on the Trapital podcast of March 25, 2021 said:

"Sometimes you can get fairly compensated for your asset, and then you can take that money and invest it in something else that you own.

If ownership is super important to you, you get the money. You can invest in real estate, that can get passed down to your kids, [and] there's other investment vehicles that might be more profitable for you going forward than your music.

Maybe your music declines over time. Not everybody's catalogues holds [sic] up. Very few catalogues hold up, especially when you're talking about independent artists.

Unless you have a classic song, your catalog's probably gonna depreciate in value, unless you have a way to prop it up or keep it going."

When every artist thinks that their recording or song catalogue will appreciate, our industry enters a big bubble. In truth, the price appreciation of a music catalogue is the pinnacle of success.

Host Dan Runcie put it eloquently in relation to TV in his written format for Trapital on March 30th:

Shows like Friends, The Office, and Seinfeld are like unicorn exits for a venture capital firm.

These shows are highly successful ones whose prices have appreciated while many others have faded away. They don't need any marketing campaign to 'prop it up' because people enjoy talking about the shows with each other every day.

Word-of-mouth activity like that on a large scale, over a long period of time, makes creative work valuable. That's what determines who has staying power.

Today's industry has seen its share of big winners, but until your work finds that rare achievement, smart money would avoid overvaluing your music.