Country Music Soars into 2008 posting double digit gains for investors in publishing, music masters, and "indie" labels headed for IPO success in the future. With the credit crunch in full sway, investors have pulled their money from the most vulnerable categories of the stock market, according to USA Today's John Waggoner. Waggoner says, "Spooked by the credit crisis, investors have yanked billions of dollars from stock and bond mutual funds since the mortgage meltdown began in August." "Investors are looking for a safe place to put their money. Country music is that safe place," according to MCA Universal producer Robert Metzgar.
Where can you invest your money, get a guarantee of all the principal back, plus interest that is 2 points above prime, paid dividends closely tied to the HSBC Direct online interest payments and make a percentage of the total income from copyrights that will earn money for up to 140 years? Those type of investments are only found in country music publishing companies with singer/songwriters who write their own original music and record product for sale in today's lucrative "indie" sales market. Production and video companies are experiencing the largest growth in country music's history. Several "indie" labels in Nashville will launch IPO's in the future with the help of major financial institutions in New York and Boston.
Investors have followed their heart and invested in country music publishing companies and music labels have seen double digit gains in their investments and the biggest growth in the industry in the past seven years. In fact, country music will soar into 2008 with the best record of investment dividends since the year 2000. Music Brokerhouse executives report, "Investors in country music publishing companies and music masters will see the biggest gains in those investments in the past seven years during 2008." Country music masters have doubled in value in just the past three years. A demo album that costs $35,000 is worth twice that when it's completed. A master scale album in Nashville now costs approximately $155,000 for 12 songs at a world class studio if the songs are original creations of the artist. The average singer/songwriter catalog is now worth over $2 million dollars if the NPS on the catalog is only $185,000 a year at the current multiples of 10-12. What sectors of country music are the hottest?
(1) Country radio is hot again in 2008. Ed Salamon, the Executive Director of the Country Radio Broadcasters, Inc. in Nashville said in a press release issued on December 31st, that country radio celebrates the New Year with more stations, more markets, and a bigger share of radio listening than anytime in music history. Audience growth in the United States, radio station growth, and the opening of Go Country 105 (KKGO) in Los Angeles and The Wolf 95.7 (KBWF) in San Francisco fill the radio voids in two of the biggest metropolitan areas in the country. International country music growth is literally three times what was originally expected last year.
(2) Country publishers are hot again with investors in 2008. Publishing powers the country music revenue stream into Nashville supporting much of the State of Tennessee's tax revenue that is created by producers bringing over 500,000 sessions to the city annually. The average cost of one master scale session is $25,000.00. Country artists are crossing over into pop and Christian radio like never before. Rascal Flatts, Tim McGraw and Faith Hill, along with the Eagles, Carrie Underwood and Kelly Clarkson have brought millions of adult contemporary listeners into country music. Carrie Underwood who started as an American Idol artist has joined with Taylor Swift in bringing literally millions of new listeners into country music from the younger 15-25 age pop genre. For the first time in history ASCAP, BMI and SESAC have collected well over a billion dollars in royalty payments for country music publishers expanding the growth in that section of country music to double digit gains and dividends that exceed 14% a quarter.
(3) Country "indie" labels are hot as IPO investments in 2008. The growth in what is called Christian Country Music is astonishing in the past two years. Every major label will release a new project this year with the Christian Country music audience on their sites for sales. Time-Life has just released a major televised Christian Country project that features Rascal Flatts, the Oak Ridge Boys, Diamond Rio, Emerson Drive, Ricky Skaggs, Charlie Daniels, Bryan White and Collin Raye. It's called Country Songs 4 Worship. This project is expected to sell over 25 million units. Positive country music is astounding labels with sales that far exceed the predictions made by industry insiders.
(4) Country tours are hot for 2008. This past year country artists posted 4 of the top 10 music sell outs nationally. Some of the largest ticket sales occurred with Kenny Chesney ($71.2 million), Tim McGraw & Faith Hill ($52.3 million) and Rascal Flatts ($41.6 million). Country music posted gains in touring with Billboard's Boxscore reporting successful tours by George Strait, Keith Urban, Brooks & Dunn, Alan Jackson, Toby Keith, Brad Paisley, and the magnificent return of Garth Brooks to country music. Garth sold out 4 shows in less than 2 hours recently and with the help of Big Machine records CEO, Scott Borchetta, Garth's back bigger than ever as an influence on country music. GAC and CMT are airing Garth Brooks "live" shows in Kansas, like Garth just had his first hit this past month. Brooks is as hot as a NASCAR tail pipe crossing the finish line at Daytona.
(5) Country singer/songwriters are the single hottest investment property you can find in 2008. A new artist that writes their own original material will literally make an investor (minimum investment of $500,000) three to four times their investment with original copyrights now paying over a million dollars for one hit record (ASCAP,BMI or SESAC) that stays in the charts an average of 21-23 weeks. The average 12-14 song original album now posting a total payback of the principal in the first 18 months through sales, and a double digit value in the copyrights that are good for the life of the songwriter and 70 years equals to an investment bonanza if the investor can find the right artist. A good example is the three album deal of new indie artists. The production of the album is $155,000 with sales out of the box initially of 35-40,000 units. With $6.00 profit per unit, the label or investor will triple his money within 18 months of the start of production. Consultants for production of these type of artists is difficult to find. Recently artists and labels alike have looked to MCA Universal producer/consultant Robert Metzgar for advice on who to back financially.
One of the most successful firms at this level is Capitol Management in Nashville. Joining with the record executives from Music Brokerhouse, they have positioned themselves to advise Chase, Toyota and other commercial companies making corporate investments into country music projects and artists.