The artist relations team gets a lot of questions from music creators about who is on the other side of the marketplace. To get some answers about the investors on Royalty Exchange, we had a conversation with the VP of Investor Relations and asked a few of the most common questions.
Why do investors on Royalty Exchange want to spend money on music royalties?
Ha! That’s a good question with a lot of answers.
Most of the investors see music royalties as an alternative investment to stocks and bonds that they’re currently invested in. Instead of buying more shares in Apple or Ford, they want to buy a share in Drake or Cage the Elephant. They see that music royalties aren’t tied to traditional markets…so if stocks start crashing, they’ll still have an investment that’s paying them. And the music industry is growing thanks to more and more people streaming their music on Spotify, Amazon or Apple Music.
We also see investors who are more nostalgia-driven – they want to own royalty streams tied to artists or songs they love.
Basically, the more people learn about how they can have music royalties in their portfolios, the more investors we see.
What interests investors about a particular catalog or song?
A lot of their interest comes from the financial information about a catalog.
Since they only invest in the back-catalog and don’t really “gamble” on future works, they want to see what the music has earned, how long its earned, whether or not the earnings are growing, and so on.
So, who is the typical Royalty Exchange investor?
Well, we get people from all different walks of life, all around the world on our platform. That includes normal members of the workforce, music industry folks who know the value of music royalties firsthand, doctors who are retiring, entrepreneurs who just sold a company they started, a lot of different people.
Typically the investors are high net worth individuals that want to put their money in something that will diversify their portfolio and pay them passive income. In the financial world, we’d call them income investors. They’re willing to spend a lot of money today to lock in an income for five, ten, fifteen years in the future. We’re also starting to see a lot more interest from institutional investors, especially as we have larger and larger auctions.
Are you interested in seeing what thousands of investors on Royalty Exchange would pay for your catalog? You can find out using our brand new Know Your Worth tool. Click the button below to get started and see their offers in about 90 seconds.