Bloomberg

ROYALTY EXCHANGE FEATURED BY BLOOMBERG TELEVISION

MARK CRUMPTON INTERVIEWS CEO SEAN PEACE

 

 

Bloomberg — Royalty Exchange Founder and CEO Sean Peace discusses investing in royalties with Mark Crumpton on Bloomberg Television’s Money Moves. The clip was originally aired on November 19, 2013.

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ROYALTY EXCHANGE FEATURED BY BILLBOARD

ROYALTY EXCHANGE WANTS TO MAKE PUBLISHING INCOME WORK LIKE STOCKS & BONDS

 

This article was originally published in Billboard.biz on August 02, 2013. Written by Ed Christman.

Billboard.biz — With big private-equity firms finding music publishing assets attractive, an upstart company wants to see if it can create a market for selling rights to individual investors. But the ambitions of the Royalty Exchange don’t stop there: Principals also envision the development a secondary market where units of assets would be sold like a stock or a bond. 

CEO Sean Peace — who co-founded the company with former Midnight Star singer Reggie Calloway and former music publicist Wilson Owens — says the firm can sell any asset regardless how big it is. But he anticipates the company’s sweet spot will be in holdings that generate annual income of $5,000-$200,000.Since its inception in July 2011, the Royalty Exchange has sold royalty-producing assets that combined have brought in $875,000, including songs by Preston Glass and Edmund Clement and titles owned by an heir of Frank Churchill, who wrote tunes for Disney movies, including “Whistle While You Work.” The company positions itself as a buyers-and-sellers marketplace for a variety of royalties beyond music publishing, including books, movies and TV. On the other hand, not everything that has come up for offer has sold. An auction for masters of songs by Jerry Garcia and Merle Saunders flopped because they didn’t have a royalty history.
 
 

Web Helps Musicians Sell Shares of Royalties

ROYALTY EXCHANGE FEATURED IN NY TIMES

“WEB HELPS MUSICIANS SELL SHARES OF ROYALTIES”

 

This article originally appeared online at NYTimes.com on April 21, 2013. A version of this article also appeared in print on April 22, 2013, on page B1 of the New York edition with the headline: “Web Helps Musicians Sell Shares Of Royalties.” Written by Ben Sisario.
 
New York (NY Times) — As a songwriter and producer for stars like Natalie Cole, Aretha Franklin and Whitney Houston, Preston Glass receives a comfortable stream of music royalties. But when he needed to make a substantial investment to embark on the next phase of his career — as a performing artist in his own right — he had few options to raise the money, he said.

“Me and most writers can’t walk into a bank,” Mr. Glass said in an interview from his home studio in Los Angeles. “Banks don’t understand how songwriting works, how the whole business of royalties works.”

So Mr. Glass turned to the Royalty Exchange, a Web site where musicians can sell parts of their royalty income to investors. He put 15 of his songs on the block — including “Miss You Like Crazy,” a Top 10 hit for Ms. Cole in 1989, of which Mr. Glass was a co-writer — and raised $158,000. Mr. Glass retains most of his rights to those songs, but will now share part of the income with an investor whenever they are played on the radio or streamed online.

Since it was founded two years ago, the Royalty Exchange, based in Raleigh, N.C., has held 18 auctions, raising about $750,000. But Sean Peace, the company’s chief executive, envisions it as a robust marketplace where musicians can capitalize on their work and investors can find a somewhat exotic asset that could still bring in steady earnings.

“Most musicians have no idea that they can take their royalties and reinvest in themselves,” Mr. Peace said. “If they could get $80,000 up front for selling 50 percent of their royalties, that can be game-changing.”

The music industry is full of bitter stories of musicians who have given up royalty rights for a fraction of their future value. Eli Ball, the founder of Lyric Financial, a competing service that gives musicians short-term advances on their royalties in exchange for a fee, thinks that musicians should not sell their rights.

“It’s too easy for songwriters to sell off an asset that took you a career to build and is going to be gone forever,” Mr. Ball said.

But Mr. Glass said he liked the Royalty Exchange because he could define exactly which rights to sell and which to retain. His sale involved what is known as the songwriter’s share of public performance; it does not cover sales of CDs or downloads, and it does not involve any change to the song’s actual copyright. (He also is a national artist representative for Lyric Financial.)

The intricacies of royalties can be confusing even to many in the industry. But Mr. Peace said his buyers are told what they will and will not receive, and are given at least three years of back earnings reports. For a collection of songs written for R&B acts like Usher and TLC that was up for auction recently, bidders saw that most of the $22,975 in annual earnings was generated by three tracks.

The company takes a 2.5 percent fee from the buyer and anywhere from 5 percent to 12.5 percent from the seller, depending on the size of the deal. It also takes 2.5 percent of future earnings from the buyer, as an administration charge.

Mr. Peace, whose background is in technology, started the Royalty Exchange in 2011 with two others after first trying a similar idea with SongVest, which sold interests in songs as high-priced memorabilia items for fans. But that model tended to work only with big artists, he said, so the Royalty Exchange instead aims at investors with bundles of songs.

The idea of royalties as a salable asset has a mixed record. In 1997, David Bowie raised $55 million by selling a 10-year bond in some of his royalties, with a fixed interest rate. But by 2004 they were downgraded amid industry tumult, and lawsuits over administration fees and other issues marred similar bonds.

The complexity of music royalties is another concern. Michael S. Simon, the chief executive of the Harry Fox Agency, one of the industry’s primary royalty-collecting groups, said that a potential investor needed considerable sophistication.

“You need to understand life of copyright, you need to understand the potential ramifications of legislation that could affect life of copyright, and you need to understand termination rights,” Mr. Simon said. “Those are three things that most people don’t understand, let alone how to predict revenue in the music business.” (Termination rights let authors recover copyrights to their works from third parties after a certain period.)

Martin Diessner, an investor who lives in South Africa who bought about half of Mr. Glass’s offering, said that being an outsider allowed him to spot a good investment where others might see risk.

“The reason why I think it’s less risky is probably because I don’t understand the music industry,” said Mr. Diessner, who is now on the Royalty Exchange’s advisory board. “Everyone who is in the industry sees it from the inside out, while I see it from the outside and maybe don’t have a negative perception.”

Most of the Royalty Exchange’s sales have dealt with the publishing rights of songs, which have to do with songwriting, as opposed to their recordings, which are controlled by a separate copyright. Publishing income has been seen as more stable, but it is also subject to shifts. Last year Ascap and BMI signed a new deal changing the method for how radio companies pay royalties. According to BMI’s most recent annual report, the change has already resulted in a 3 percent drop in revenues.

Mr. Peace said that like any investment, royalties involved risk, and that its buyers were given a significant amount of information for evaluation.

As for Mr. Glass, the sale has helped him buy new equipment for his studio, including a sitar and various vintage instruments, that will help him as he starts a new phase in his career.

“I wanted to be competitive, not only as a producer and writer but as an artist, too,” he said. “I wanted to invest in myself, to be able to use some of the royalties that I have built up, almost like real estate.”
 
 

CNN

ROYALTY EXCHANGE FEATURED ON CNN

“RIGHTS TO JUDY GARLAND’S TV SERIES TO BE AUCTIONED”

 

This article originally appeared on CNN.com on December 21, 2012. Written by Alan Duke.

Los Angeles (CNN) – Looking for that special Christmas gift for the Judy Garland fan who has everything? Consider giving them the U.S. rights to the legendary actress-singer’s television variety series.

“This would be a great Christmas gift for somebody,” said Darryl Payne, a music producer who bought the rights in 1998 from Sam Luft, Garland’s former husband.

“The Judy Garland Show,” which cost CBS $24 million in 1963, is being auctioned this weekend with a starting bid of $1 million. The bidding, conducted online by The Royalty Exchange, is set to end Sunday afternoon.

“You get Judy Garland,” Payne said. “She’s singing, she’s dancing. You get all the biggest stars of that era.”

Then-rising star Barbra Streisand sang a memorable duet with Garland in one episode, before the singer filmed “Funny Girl,” her breakout movie. The appearance earned Streisand her first Emmy nomination.

Garland’s daughter Liza Minelli, then 17, was a guest, along with many other entertainment legends: Tony Bennett, Lena Horne, Peggy Lee, Count Basie, Mickey Rooney, Ethel Merman, Bob Newhart, Donald O’Connor, Steve Allen, Jane Powell, Peter Lawford, Vic Damone and Jack Jones.

While clips of the series have been licensed over the years, the episodes have not been shown on television since the series was canceled in March 1964, Payne said.

The buyer can sell DVDs or rebroadcast in the United States the 26 star-filled episodes hosted by Garland for a season on CBS starting in 1963. The new owner could also license the series for streaming online or downloading, Payne said.

The remastered digitized video also includes never-before-seen outtakes from the show, Payne said.

Garland died of a drug overdose at age 47, five years after the series was taken off the air.
 
 

FOX Business

ROYALTY EXCHANGE FEATURED ON FOX BUSINESS

DARRYL PAYNE INTERVIEWED ABOUT JUDY GARLAND SHOW ROYALTY AUCTION

 

 
Royalty Exchange — Last week, in the midst of a number of entertainment auctions, The Royalty Exchange and our Judy Garland Show listing were featured on Fox Business’s After the Show!

Darryl Payne, seller of The Judy Garland Show rights, was the show’s featured guest. In addition to discussing the auction itself, the interview also highlighted the advantages of investing in royalties at Royalty Exchange. The show originally aired on Friday December 14, 2012 at 4:00 PM.
 
 

The Royalty Exchange Launches

This article originally appeared on TechJournal on July 5, 2011. Written by Allan Maurer.

Would you like to have an income from the music used in classic Walt Disney’s animated features such as “Snow White,” “Dumbo,” or “Bambi?” Interested in acquiring an income stream that is also a conversation starter? Cary-NC-based  The Royalty Exchange, an online company created by the founders of SongVest, has begun auctioning royalty streams from songs, TV shows and movies.

The first auction, which began July 2 and lasts until July 16, is for the royalties oof Disney song writer Frank Churchill’s catalog. Churchill joined Disney Studeios in 1930 adn his work includes songs from “Snow White and the Seven Dwarfs, ((“Heigh Ho,” “Whistle While You Work,” “Someday My Prince Will Come” and “I’m Wishing”), Dumbo and Bambi.

Churchill scored 65 Disney shorts, including “Who Killed Cock Robin.”

Buyers get a look at previous royalty income and details about the items for sale and compete in an auction. Winners will be paid royalties via organizations controlling them, such as BMI, ASCAP for music and the Screen Writers Guild for TV shows.

Sean Peace, founder and CEO of The Royalty Exchange and SongVest, is a tech-savvy computer expert with grew up in Henderson, NC, just 45 minutes north of Raleigh. He attended UNC Wilmington as well as UNC Chapel Hill, where he majored in economics. Upon graduation, Peace started three technology companies, one of which helped integrate technology into classrooms via wireless networks and connected teachers with common educational tools.

Peace tells TechJournal South the idea for SongVest, which is similar to The Royalty Exchange, but more focused on selling a piece of a song or a catalog as memorabilia than as an income stream, evolved after he had a conversation with Tia Sillers, a former teacher at the University of North Carolina at Chapel Hill. He met Sillers while he was a student there and she harbored dreams of becoming a songwriter, which she later fulfilled.

“She mentioned that at some point when she retired she would sell her catalog,” says Peace. A songwriter’s catalog packages the royalty interest in all of an artist’s work for sale to investors.

“People buy catalogs based on a financial multiple of how much it made over the last several years,” Peace explains, “paying 10 or 20 times the royalty stream.”

SongVest, though, only hit a small percentage of the market and it proved harder than Peace first expected to get people to understand the concept.

The Royalty Exchange uses essentially the same auction mechanics of SongVest, but the multiples on the music or other creative property being auctions is a modest 10 to 1.

Peace notes that “Royalties are fairly consistent and trend one way or the other. But there is a potential upside. It’s possible that an artist or song will suddenly get big. A song from an album might be used in a movie or on (the TV show) “Glee.” So you could have a little spike, although it’s not something you should count on,” he adds.

Buyers will get to see what they have on an online dashboard, and eventually The Royalty Exchange may add a social component so buyers can show people on Facebook or other services what they purchased.

Down the road, Peace says, he’s looking at the possibility of creating a secondary market for royalties for accredited investors.