Royalty Exchange Marketplace Passes $75 Million Transaction Milestone

  in Company Updates

May 27, 2020


The Royalty Exchange marketplace this month surpassed $75 million in transactions since its relaunch in 2016. 

And our momentum makes that even more impressive. $25 million of that $75 was generated last year alone, after over three years getting to the first $50.

But what is far more interesting is how Royalty Exchange has reached this figure. The boom in music catalog sales in recent years has generated headlines for the sheer size of the deals struck lately. Multimillion-dollar transactions naturally generate that kind of attention. 

The size of transactions on our marketplace won’t generate those kinds of headlines. That’s because it didn’t get to $75 million in transactions through a handful of blockbuster deals with superstar artists. 

It got there through over 875 separate transactions with working creators. The average transaction price is $70,000. While that’s $10,000 higher than last year’s average, it’s still far less than the big transactions that dominate in the press.

And we wouldn’t have it any other way. 

Our goal from the start was to be a resource for both buyers and sellers left behind by the traditional system of artist financing and royalty transactions. The catalogs listed on Royalty Exchange, on average, earn about $15,000 a year. Some earn far more, some far less, but that’s the average.

Traditionally, corporations buying music royalties have had little interest in transactions of this size. That’s left the creators behind those catalogs with few options when it came to raising money. If they couldn’t get a fair deal on a sale, their only option would be a predatory advance that buried them in debt. 

We’re glad to provide an alternative. 

About 70% of the artists selling royalties on our marketplace are songwriters, who typically have fewer options to raise money than recording or touring artists. 

Not only has our marketplace given them a resource to leverage their catalogs as financial assets, but it’s also given them flexibility. Our 10-Year-Term option allows songwriters to only temporarily sell their royalty income, so they can receive a useful lump sum today, and in 10 years regain their royalty stream. 

Since introduced, over 55% of the transactions on the marketplace have been these 10-year temporary sales. 

The reason we can facilitate a more democratic range of deal sizes and terms is simple. We’re not the one doing the buying/selling. We’re just the marketplace. And like any marketplace, there’s both a seller and a buyer. 

We’ve already talked about the sellers in our marketplace. Now let’s take a look at the buyers. Who are they? Most are individual investors, looking for opportunities to put their money into investments that generate regular income. In the investment world, this is called “yield.”

You don’t need to be a music industry professional to seek out sources of yield. There are so few places to find yield in the world today that royalties have long been considered lucrative. But until our marketplace, only hedge funds, pensions, and private equity would buy royalties. 

Our marketplace increases competition. For every auction we have, there is an average of seven investors competing with each other to win. And those who win often come back for more. In fact, nearly half of all investors who have bought royalties on the marketplace (46%) are repeat buyers. 

And more investors continue to flock to the marketplace. Nearly 10,000 new investor accounts were created in 2019. There were more new investor accounts created in April, at the height of the pandemic, than in any single month in our company’s history—at 2,360.

Taken together, since our last milestone announcement, the marketplace has attracted more buyers, more sellers, and more sales. We call that healthy. Not just for us, but for the music and investment communities our marketplace serves. 

Ideas have value, and we believe that only the power of markets will fully unlock the value of ideas for all involved. The healthier the market, the better it serves all participants. 

Thank you to everyone who has contributed to the success of this marketplace. After all, it’s not our marketplace… it’s yours. 

MARKETPLACE HIGHLIGHTS

(Since January 2019)

Most Bids: 102
Hit From Dr. Dre’s Multi-Platinum Album "2001"

Most Registered Bidders: 96
Slipknot & Simple Plan Producer Royalties

Highest Sale Multiple: 15.43x
Iconic Hip-Hop From Jay-Z

Biggest Sale: $900,000
Multi-Platinum Hip-Hop Collection

 

NOTABLE SONGS/CATALOGS  

Evanescence “Bring Me To Life”

Classic Comedy: Trading Places

Live

The Misfits

Rihanna’s “Don’t Stop The Music”

Flogging Molly

Nicki Minaj’ “Anaconda”

Dirty Dancing’s “Time Of My Life”

Kendrick Lamar 

Rascal Flatts “Mayberry”

Drake “Fire & Desire”

Cardi B’s “Bodak Yellow”