How TikTok Boosted Cage the Elephant's Music Royalties

An in-depth look at a songs journey from virality to financial growth
June 18, 2024

Royalty Earnings Performance

At Royalty Exchange, multiple listings of Cage the Elephant songs have been sold to investors. Most recently, in December 2023, a 46-track catalog was purchased for $64,000. In June 2024, another catalog was sold for $66,925.  

So why did these two catalogs fetch such high multiples and spark a bidding war between investors? 

Let’s dive in. The listing sold in December received 28 offers from 11 investors over the course of five days. The final bid was 16.75 times the previous year of earnings. One reason for the high multiple is the fact that the previous year earnings were 21% greater than the three year average. This shows continued growth in earnings driven mostly by streaming consumption.

Looking at the growth in streaming numbers of the top song in the catalog, “Cigarette Daydreams” has risen 79% in monthly Spotify streams in the past three years. The song has also seen drastic growth in YouTube streams per month rising 455% since the end of 2018

As you can see, the increase in consumption has directly correlated with the increase in earnings over the course of this catalog’s lifespan. 

But where did this spike in consumption come from? How did the earnings and consumption bottom during the first half of 2021 and see a huge spark in growth soon after? I mean, the song was already eight years old at the time of the spike in growth. It’s simple, it was from TikTok. From January 16, 2021 to July 12, 2021 this TikTok sound below saw 51,900 new videos created with it attributing to hundreds of millions of views and engagements. 

This organic user generated content opened the floodgates for song search inquiries, discovery, and increased consumption drastically. 

If we look one step further, we see that when users discovered the sound and wanted to figure out the name of the song, one of the first things they would do was Shazam it. Shazam has become synonymous with being a leading indicator for streaming growth to come from social media content the past few years. 

Usually, an increase in Shazams signifies that streams will follow. As more people go from discovery to consumption, it compounds to more listeners, and when enough people start streaming, then the streaming platforms push those songs to new listeners algorithmically to those who they think will like it based on similar listening behavior. 

Between January 14 and August 14, 2021 the song saw an increase of 264% in monthly Shazams. Zooming in to the YouTube streams for the song, during this same time frame we can see an increase in monthly streams of 131%.  

Another place we can see the journey of the TikTok discovery impacting the discovery and consumption by new fans on streaming platforms is with Google searches. If we zoom in to a year time frame a few months before the sound took off to a year after, we can see a full picture of fans going to Google to try and find the song. 

Towards the end of 2020, the search inquiries for the song were pretty stagnant, but then right when the TikTok sound started taking off at the beginning of 2021, the search volume increased dramatically reaching its first peak at the beginning of March before tapering off. Then it saw a second spike in search volume with more activity on TikTok reaching its full peak at the end of June matching exactly with the video creates volume, Shazams, and YouTube streams increases. 

The coolest thing about how this all translates to consumption and earnings though is that despite TikTok video creation activity slowing down the past few years, consumption platforms like YouTube and Spotify reward increased discovery over the long-term. 

We can see from the long-term Spotify and YouTube charts that even when activity on discovery platforms slowed, consumption continued to climb. This is due to retention, fans who enjoy the music will continue to listen consistently. This is also due to algorithmic consumption, these platforms will push songs that users who listen to similar types of music haven’t heard before that they think they will enjoy. 

Interested in Investing? 

Royalty Exchange offers a lot of rock catalogs that are up for auction today, so sign up as an investor to get started.

If you’re new to royalty investing, Royalty Exchange has prepared this guide on Royalty Investing Made Easy. Discover why so many investors today are actively adding music royalties to their portfolios. 

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