.jpg)
Clouty, the first organization to make music a financial instrument, announced that today it is launching a composite index designed to serve as the key benchmark for the music industry. The firm is partnering with the world's leading data providers to disseminate the index globally. The move paves the way for the introduction of a host of tradable financial products, giving the industry and those with exposure to it an opportunity for much-needed risk management capabilities, and offering institutional investors as well as the general public a chance to have a financial stake in music, even down to their favorite songs and genres.
Music is one of the only asset classes that has continued to rise amidst a macro-economic downturn. In 2021, more than $5 billion was spent on music catalog acquisitions, and global music streaming has grown into a $30 billion market from just $2 billion in 2015, on pace to reach $103 billion by 2030, according to industry analysts.
Clouty's MUSIQ™ 500 uses numerous inputs to capture the spot price for the top 500 songs in aggregate streamed in the U.S., consisting of various genres, including rap, children's, country, Latin, R&B/hip-hop, rock, dance/electronic, pop, world music (e.g., afro beats, reggae) and more. Applying its proprietary methodology to calculate the index value, Clouty intends to follow up with individual indexes tracking the top nine genres, along with a global composite, soon after the release of the MUSIQ 500.
Clouty Founder and CEO David Umeh said: "We have very exciting plans for Clouty and interest even beyond what we imagined throughout the financial markets and music industry. By 2030, the global music industry will have grown several times over. The shift in music consumption to streaming has made it possible to run robust and meaningful financial analysis on this data. We're thrilled to kick off our innovative composite index and looking forward to sharing a number of other major developments in the coming months.
"As humans, we're all connected emotionally in some way to songs, and music in the streaming era, which is consistently uncorrelated to other asset classes, remains ripe for innovation. By creating a financial index to allow the world to track the performance of the underlying market – a tool that's been available for decades in other assets – we open the door to a range of interesting opportunities. With our benchmark, the wave of music investing and risk management is taking a huge step forward, providing an important new way for the industry, professional investors and individuals to gain and manage exposure to this valuable asset."
