Key takeaways: 

• The 2025 market has seen at least $4.4 billion in music royalty bond offerings
• Funds are securitizing future royalty revenues from artists of all genres and eras, from the Beatles to Justin Bieber
• Streaming habits and better data on music listening trends are helping fuel the surge

Music royalty bonds — securities backed by future song royalties — are drawing attention. An increase in offerings reflects the streaming music era and more artists monetizing song catalogs. Data analytics and more transparency into listening habits have helped grow the market.

Securities backed by music royalties are becoming more popular plays on Wall Street. The music bond market has raised at least $4.4 billion in 2025 as artists and other owners decide to monetize all or part of music catalogs.¹

Earlier this year, Recognition Music Group sold $372 million in bonds backed by royalties from artists including the Red Hot Chili Peppers, Justin Bieber, and Shakira.² It’s part of a growing trend of public and private funds obtaining music royalty rights and selling them to investors.³

Music royalty bonds are financial instruments secured by future royalty revenues from songs or catalogs. The securities allow artists or rights holders to convert their expected royalty income into upfront capital, while investors earn returns based on the ongoing performance of the music.⁴

Such deals aren’t exactly new. David Bowie broke ground in 1997 when he raised $55 million by securitizing then-future royalties from the U.S. sales of a 25-album back catalog. “Bowie bond” investors received regular annual payments until the bonds matured in 2007.⁵

But those financial instruments remained rare during the late 1990s and 2000s as album and CD sales declined with the rise of online music and file sharing. A more recent resurgence of music royalty bonds since 2021 reflects a much different industry supported by pay-based streaming platforms and more diverse income streams.⁶

Read more: Bonds: What they are & how they work

Streaming habits reshape music values

The growing popularity of streaming services like Spotify, Apple Music, and others has helped bolster royalty cashflows in recent years, and in turn, the appetite for bonds tied to music assets.⁷

Empower research shows nearly 60% of Americans think financial happiness comes from spending on things and experiences that bring joy. Music has been no exception in recent years.

Americans spent $112 per capita on recorded music in 2024, up nearly 10% from $102 in 2023, according to industry research firm MusicWatch. About 132 million Americans pay for music subscriptions, which includes on-demand subscriptions, satellite radio, and other formats.⁸

U.S. recorded-music revenue reached $17.7 billion in 2024, driven by the continued rise in on-demand streaming. Streaming accounted for 84% of the total revenue but traditional formats like vinyl record sales, which climbed to $1.4 billion, are also up.⁹

Streaming is just one piece of the music-revenue picture. Songwriters, performers and other rights holders also earn from radio, commercials, and TV, as well as social platforms, short-form video, video games, fitness apps, and other experiences.¹⁰

Read more: Business of Play: “Immersive” is the latest buzzword in entertainment and wellness

Better music data changes the bond equation

Royalty and song ownership and copyright structures can be extremely complex.¹¹ While most associate bonds with the artists, funds are also acquiring royalty rights owned by music producers who have worked with acts such as Taylor Swift, Dua Lipa, The Weeknd, and U2.¹²

The digitalization of music has provided greater transparency into potential revenue streams based on royalties. Music metrics have become far more advanced with detailed data on plays, listener demographics, engagement, and other measures, often in near-real time.¹³

That transparency has been important to music-backed bonds because it can make cash flows easier to model. Older catalogs — especially classic rock songs with decades of listening history — can show long-term patterns, while improved data can also improve forecasts for newer music as well.¹⁴

The asset pools behind music securities can be massive and diversified. Concord Music Group recently offered $1.7 billion in notes backed by music assets spanning many artists, eras, and regions — from Rodgers and Hammerstein to the Beatles to Rihanna — covering over one million compositions, master recordings, and related rights.^15,16

Music bonds: A small but growing market

The music bond market is much smaller than other types of asset-back securities such as those based on auto loans, credit card debt, or equipment leases.¹⁷ But music bonds are now regularly rated by the major credit rating agencies because of growing interest.¹⁸

Some observers see underlying music assets as plentiful.¹⁹ Dozens of major artists have made headlines in recent years — including Sting, Stevie Nicks, Neil Young, and others — for selling or all part of their catalogs and other rights for big lump sums. ²⁰

While potential future music streams and income have become easier to model, the music industry is also constantly facing changes — as it did when the first Bowie bonds were offered more than 25 years ago.

AI is reshaping music and it’s use could raise copyright or legal concerns.²¹ Listening habits and consumer tastes are always shifting while streaming platforms and algorithms have a big inputs in which music gets heard and payout formulas.²²  

But with global music revenue rising in recent years and digital listening habits on the upswing, many are tuning into what comes next for music-backed securities.

Read more: One thing: The subscription economy