We’ve all read about the booming market for music catalog deals taking place over the last year. Most have been big funds writing big checks to big artists. But those big funds aren’t the only investors interested in music.
There are literally thousands of individual investors and smaller investment firms also looking to invest in music catalogs. That means the other 99% of artists that the big funds ignore can also benefit from this demand.
Royalty Exchange was designed to match these investors and artists together by lowering the barriers for them to find each other and interact. Today, we’ve added a powerful new feature to make that even easier—Direct Listings
With Direct Listings, royalty owners can post a catalog to the Royalty Exchange marketplace, and invite investors to make them an offer for it. It allows artists to dictate a specific price, and to review offers as they come in, simply accepting or rejecting as they prefer.
This is a stark difference from the auctions that Royalty Exchange is best known for. Auctions typically start at lower prices to attract competition. They have a time limit that creates urgency around bidding. But the final price isn’t known until the last bid is placed. While the final closing price of an auction typically falls within the range we estimate in advance, auctions do carry a risk that investors won’t bid up the catalog to the price the seller desires.
“Many artists rightfully want more price certainty for their catalog of work than auctions can provide,” said Royalty Exchange partner Anthony Martini. “Direct Listings give them that certainty and control, while still letting them benefit from the competition our marketplace creates.”
Directly Listings include all the flexibility and benefits that Royalty Exchange is known for, including:
- Competition: Catalogs are presented to the largest community of music investors in the world, who compete with each other to offer the best deal.
- Flexibility: They don’t have to be catalog sales. Artists can choose to sell as much or as little of their public performance royalties as they like while keeping their other royalties.
- Control: Music rights aren’t included: Artists keep the same ownership over their music as they had before.
- No Debt: These aren’t loans or advances. There’s nothing to pay back or recoup.
By setting their own asking price, artists placing Direct Listings can simply wait for the right offer before committing to a sale. And while a typical auction lasts 3 - 5 days, a properly priced Direct Listing can go live and close in a matter of hours.
Both artists and investors have responded with overwhelming interest since we started testing the process in September. Over the course of the month, Direct Listings generated more for rightsholders in that timeframe than auctions, with transactions spanning from $3,000 to $300,000.
That’s not to say auctions are going away. At launch, Direct Listings are only available to public performance catalogs distributed through ASCAP or BMI (and we plan to include publisher royalties to the mix in the coming weeks). So other types of royalty listings will continue to be offered as auctions.
Also, in many cases, an auction is preferable to a Direct Listing. Auctions add a degree of urgency to the competition over music royalties, which have the potential to drive prices up far higher than artists may realize they can get.
But the speed and simplicity of a Direct Listing will give creators more options to raise money using their music royalties than ever before.
“Based on the response so far from both artists and investors, we think Direct Listings have the potential to become the primary format on the Royalty Exchange marketplace,” Martini said. “They give both buyers and sellers more control over the process, yet result in faster transactions at the same time. That makes everyone happy. And as a marketplace, our only job is to make both buyers and sellers happy.”
Direct Listing eligibility requirements are:
- ASCAP or BMI public performance royalties only at launch. (Publisher royalties coming soon.)
- Earn $1,000 in royalties in the last year.
- Complete a Due Diligence process to ensure a clear path of ownership (no liens, judgments, etc).
Artists with catalogs that meet these criteria only need to follow a few simple steps to create their Direct Listing:
- Visit RoyaltyExchange.com (or click the green button below) and create a Royalty Exchange account.
- Connect your ASCAP or BMI account to automatically upload your earnings history.
- Review Instant Offers. These are “blind” offers left by some investors willing to buy certain catalogs sight-unseen. Accept it to finalize a deal, or reject it to create a Direct Listing.
- Follow the Direct Listing wizard, which will direct you through the process of adding the names of your songs and supporting media, pricing, and more.
- Submit your listing for due diligence, and then wait for the offers to come piling in once it goes live!
The entire process just takes a few minutes. To get started, simply follow the link below to connect your ASCAP or BMI account, and our setup wizard will guide you through the next steps.