How a DCF values a music catalogue
A multiple is the quick answer to what a catalogue is worth; a discounted cash-flow is the rigorous cross-check. Together they keep a valuation honest.
The idea
A DCF asks a simple question: what are this catalogue's future royalties worth in today's money? It projects income year by year, then discounts each year back to the present, because a dollar earned in five years is worth less than a dollar today.
The two inputs that matter
- Decay rate — how fast royalties fade each year. Stable catalogues decay slowly; trend-driven ones fast.
- Discount rate (WACC) — the return a buyer requires for the risk. Higher risk, higher discount, lower value.
Why use it
A multiple alone can flatter a catalogue whose income is about to fall. The DCF catches that by modelling decay. That is why Arbiter computes both — the multiple-based value and a DCF cross-check — as part of its methodology.
See the multiple and the DCF on your catalogue. Upload your statements for a value range with both methods.
Value my catalogue →Frequently asked
General information, not investment, legal or tax advice. Valuing music rights involves assumptions and uncertainty; past performance is not a reliable indicator of future results.