top of page

How to Build a $100K Music Catalog in 36 Months

All creatives want a valuable music catalog to live off of. However, evaluating a catalog is not something creators know how to do. What do you do with a high-valuation catalog? How do you live off of it or grow from it?

The Problem

  1. Artists don’t know the true value of the work they’ve already created.

  2. Many don’t feel like they have a true shot at making it.

  3. If creatives knew this simple formula, it would change their mindsets overnight.

What is a Catalog Record?

A record older than 18 months is considered a catalog record. A record older than three years will be considered investable and a less risky investment than a record that has just entered its 19th month of age. To evaluate your catalog properly, we need a full three years of royalty history to give the catalog record a proper valuation.

How Valuation Works

Valuation works on a method called LTM (last 12 months) and a set premium over the LTM.

$10,000 LTM (Last 12 months) x number of years on the market = Estimated total value earned over the life of the catalog.

From this equation, you can then determine how much premium will be placed on the catalog (2x, 3x, 4x, etc).

$10,000 x 3 years = $30,000

$30,000 x (3.33334x) = $100,000

What If I Made More Than $10,000 in the Last 12 Months?

LTM or Last 12 months' data is a weighted average that safeguards the investor. Because if we’re being honest, all the money already deposited into your accounts is of no use to an investor. Therefore, the last 12 months will allow an investor to safeguard their bet against the future since the music business is so volatile. On top of this, the age of the song or catalog further ensures that the investor will make their money back.

More Age + High LTM Royalty Amount = High Premium Sale

Our Goal

Our goal is to grow a group of songs over 36 months to achieve $10,000 in revenue in the last 12 months of their existence to sell to an investor at 3.33334 times its value! Giving us a $100,000 valuation. This is essentially an inverse record deal.


Appreciation means to increase the monetary value of the intellectual property. In many cases, perception will outweigh reality. Therefore, if we increase the perception by quality presentation and communicate clearly why the public needs to hear our music, then our perception will appear bigger than what the reality is, even if you’re just starting. Appreciate your talent by showing it some love and giving it a proper display to the public. Your catalog must be displayed in a high-quality manner at all times to achieve maximum perception, which then gives us a potential maximum appreciation.


Licensing will give us the money we need to validate the value of our catalog. All revenue for music comes to us through licensing. From TuneCore, synchronization, and any publishing royalties received, it is all licensed revenue.


This is a hidden step to increasing your catalog's value. People that buy catalogs want to know who owns them. Otherwise, how could they buy from you? If your catalog is organized through means of protection, then your potential buyers will add this value to your catalog because of your attention to detail and quality control.

Revenue & Earnings

To know the real value of your catalog, we must track the actual revenue received from the catalog. We do this through royalty management software, or if you’re savvy enough, you can do your own spreadsheets. However, to get an investor on the hook, you will need your financials in order so the purchaser can audit your earnings.


The catalog must be promoted for revenue to increase and its perceived value to increase. According to your plan, faking it until you make it when it comes to the quality in which you deliver your product to the market will be key in standing out amongst the noise. Promotion is all about cutting through the noise by making even louder noise.

Tax Benefits

Selling will be considered income on your behalf, but because you held the catalog in an LLC, you can now use that money to further grow the LLC itself tax-free.

Why Would I Do This Instead of Asking for the Money Upfront?

In many cases, the artist will need cash at a zero percent interest rate to further invest in what they are building, and selling a portion of your catalog can help you with funding. Secondly, if you’re seeking a record deal, you can use this same structure to accurately see the potential amount a label may offer you.

Can Anyone Do This?

Yes, you can either do this on a market exchange like Royalty Exchange or privately.

How Many Songs Should I Include in the Catalog?

As many songs as you want that keeps the value up!

Why Would I Put the Songs in an LLC?

So you can do business with the LLC by receiving the funds through it for many major tax and security benefits.

Can I Go to a Bank with My Valuation?

You absolutely can. However, it won’t be interest-free. Just make sure you pay down the interest first.

Check This Out!

If you're a music creative or executive looking to build your label or publishing company in 60 days or less, with a step-by-step foolproof process, grab the 60-Day Record Label Course and get it done today! You’ll gain the ability to get real funding, avoid contractual pitfalls, and keep the middleman out of your pockets. Click the link below to get started now! If you’re skeptical, grab the free guide, "10 Ways to Increase Your Record Label Profits," which comes with a free split sheet download.

Valuing Your Catalog…

Is an advanced move, however, it’s not hard to do with a little elbow grease. This will allow you to know your worth at all times so someone won’t short-change you on your music’s value. It also helps you form an exit plan for the music business if you ever want to hit a mark to exit this business.

Not Valuing Your Catalog

Is a beginner’s move. You’ll never understand what you’re truly worth, and if you don’t know what you’re worth, you won’t be able to recognize your true potential beyond creating the music itself.


Now you have a bit more knowledge to move from a beginner to a boss in the music game. With these strategies, you can build a valuable music catalog, ensuring your work pays off and setting you up for long-term success in the industry.


bottom of page