Royalty Exchange Passes $50 Million In Royalty Transactions

  in Company Updates, Creator Financing

Jan 23, 2019



This month, Royalty Exchange reached an important milestone with far-reaching implications for the music business—over $50 million in royalty transactions in the three years since the company relaunched in 2016.

That’s $50 million of new capital going into the pockets of songwriters, producers, and other rightsholders. None of it is subject to confusing or unfair recoupment terms, or forces artists to give up their rights.

Every penny comes from a new source of funding that music creators previously had limited access to—the worldwide community of investors. The Royalty Exchange marketplace connects the creative industry with individual and institutional investors easily and efficiently.

This gives creators at all levels access to global, distributed capital for the first time. We didn’t reach this milestone through just a handful of blockbuster deals, like the ones you read about in the music trades. Instead...

535 Transactions

This $50 million was reached through 535 separate transactions over three years spanning a diverse range of creators, catalogs, and fundraising options.

Creators

The vast majority of music creators who come to us are not the kind of mainstream artists you’d recognize. 

  • 75% are individual songwriters typically underserved by traditional financing.

  • Over half have either participated in multiple transactions or referred a friend.

Catalogs

The last 12 months earnings of the catalogs (and portions of catalogs) listed on our marketplace ranged between $1,000 to just over $300,000.

  • Over half, 52%, were smaller catalogs earning $20,000 or less in the last year. That means we’re making this opportunity available to creators of all sizes, not just the top-earning artists that get all the attention today.

  • Over 70% were for the writer’s share of public performance royalties, not the publishing catalogs as you normally read about.

Options

Initially, the only listings you’d find on Royalty Exchange were for permanent royalty sales (usually for just a percentage of a catalog, and the copyrights generally weren’t included). But over the last year, we added new options:

  • Temporary sales that function much like an advance in that royalties revert back to the creator after 10 years. The result—larger advances with no recoupment commitment. These have driven 60% of all the transactions conducted since they were introduced.

  • Shared catalogs, where instead of auctions with a single winner-take-all highest bidder, multiple investors can buy shares of catalogs larger than what the auction platform can support. These drove over 35% of all transactions and brought in new investors and creators to the marketplace.

We’re proud of the work we’ve done to date, but we’re just getting started.

For instance, all this activity was generated by just 255 individual and institutional investors who succeeded in winning an auction or buying into a private syndicate (or both).

Thousands more investors have participated in auctions, but didn’t win.

Two of the three shared catalogs we’ve offered had far more demand than supply, with one for royalties stemming from the Dire Straits catalog alone oversubscribed by 85%.

We also regularly speak with large institutional investors, including one of the top 10 sovereign wealth funds in the world, that are highly interested and motivated to invest in music royalties. These are institutions each looking to invest $50 million or more across hundreds of catalogs.

All this investor demand is still out there, waiting to be met... like water behind a dam. If tapped properly, it will flood the music business with more capital than anyone realizes.

And our job is to build the infrastructure to make this possible. We don’t buy or sell royalties. Instead, we’re the market place where creators can access global, distributed capital.  


But enough with the numbers. Here’s a selection of the rights for songs and catalogs that appeared on our marketplace over the last three years.

Highlights

Most Bids: 107
Bette Midler’s “The Rose”

Most Registered Bidders: 171
Eurythmics, Bee Gees, Judas Priest, and More

Most Active Bidders: 20
Kanye West's Triple Platinum Hit “Mercy”

Most Popular Private Syndicate
Dire Straits Private Syndicate

Highest Sale Multiple: 17.41
Michael Martin Murphey's “Wildfire”

Other Notable Songs/Catalogs

“No One To Depend On”
Santana

“Black Water”
The Doobie Brothers

“The Furthest Thing”
Drake

“Empire State of Mind”
Jay Z / Alicia Keys

“All of the Lights”
Kanye

“If You’re Gonna Play In Texas”
Alabama

“Mary’s Song (Oh My My)”
Taylor Swift

“You’re The First, The Last, My Everything”
Barry White

“Something’s Got A Hold On Me”
Etta James

“What’s The Difference”
Dr. Dre

“Sugar Magnolia”
The Grateful Dead

Flawless
Beyonce

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