Revenue Multiple
The factor applied to annual revenue to determine a music catalog's sale price.
What it means
A revenue multiple is the valuation metric most commonly used in music catalog transactions. It represents the number of years of current annual revenue that a buyer is willing to pay upfront to acquire a catalog. If a catalog earns $20,000 per year and sells at a 10x multiple, the purchase price would be $200,000. The multiple essentially reflects the buyer's confidence in the catalog's ability to continue generating revenue into the future, as well as broader supply-and-demand dynamics in the music rights market. Revenue multiples in the music industry have fluctuated significantly over the past decade. During the peak of the catalog acquisition boom (2020-2022), multiples for top-tier catalogs reached 25x-30x annual revenue, driven by institutional investors and low interest rates. As interest rates rose and the market matured, multiples for premium catalogs settled back to 15x-20x, while independent and mid-tier catalogs typically trade at 8x-15x. Several factors influence the multiple: revenue growth or decline trends, the proportion of streaming vs. legacy revenue, genre stability, metadata quality, geographic distribution of listeners, and whether the sale includes masters, publishing, or both. For ambient and meditation music catalogs, multiples tend to be favorable because these genres demonstrate exceptional revenue stability, minimal seasonal fluctuation, and strong growth aligned with the expanding wellness industry.
Technical details
Revenue multiples are typically calculated on Net Publisher Share (NPS) — the revenue remaining after all collection costs, distribution fees, and third-party shares are deducted. The formula is: Catalog Value = Average Annual NPS × Multiple. Buyers may use trailing 12-month (TTM), trailing 24-month average, or trailing 36-month average revenue as the baseline, depending on the catalog's revenue trajectory. Growing catalogs may be valued on projected forward revenue with an applied discount rate. The multiple itself is influenced by the weighted average cost of capital (WACC) of the buyer, comparable transaction multiples in the market, and the risk-adjusted return expectations. In financial terms, a 10x multiple implies a 10% annual yield on the buyer's investment, assuming flat revenue.
Frequently asked questions
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