Graduation Year

2024

Date of Submission

4-2024

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Darren Filson

Abstract

This thesis will investigate the multifaceted drivers of acquisition price in music catalog purchases within the new practice of royalty-backed securitization. This paper seeks to identify the key variables driving the prices realized in catalog sales with a comprehensive dataset that includes artist popularity metrics from Spotify, chart performance from the Billboard Hot 100, industry sales trends, and Grammy Awards data. Univariate regression analyses showed that Spotify monthly listeners, Grammy Awards wins, and catalog prices were statistically significantly positively correlated with valuation. On the other hand, peak positions on the Billboard Hot 100 didn't yield significant influences on valuation. Even after controlling for genre and other success metrics, using a multivariate regression model, the results sustain the significance of critical acclaim (Grammy wins) and broad listener engagement (Spotify monthly listeners) for determining music catalog values. Further justification of the research is that long-term recognition, coupled with a lasting climax of popularity on the streaming sites, is key to increasing the financial value of the catalog. Findings from this study will be supportive of more understanding concerning the mechanisms of valuation in the music industry. Artist management is important to stakeholders such as catalog acquisitions and promotional strategies. In doing so, this brings to light the complex interplay of factors driving music catalog prices, making a valuable contribution to the academic discourse for the econometrics of the music industry. These results point to an absolute need for an all-embracing method to appraise and forecast the worth of music catalogs within the current environment of digital streaming and the always-changing behaviors of investment.

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This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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