Secret #1: Have A Plan
By Gary Young, EVP and co-founder, Royalty Exchange
There are a lot of good reasons to sell your catalog.
Here are the most common we’ve seen behind the nearly 900 transactions we’ve completed over the last 5 years.
Most commonly, artists want to raise money to invest in their career.
We’ve worked with songwriters like Felix Snow, who wanted to make the transition from songwriter to performing artist. He’d written hit songs for artists like Selena Gomez and Katy Perry.
But his dream was to become a performing artist himself, write his own music, and have total creative freedom.
So he worked with us to raise hundreds of thousands of dollars to invest in his artist project. He now has more than 100,000 monthly listeners on Spotify and is absolutely crushing it.
If you want to make the transition like Felix, selling your old songs that you wrote for other people can be a great way to finance your future goals. We’d love to help you do it. Plus, by selling your songwriting catalog, you can stay independent and not have to go around hat-in-hand to try and secure a major label deal.
We’ve heard from some artists that it serves as a useful creative turning point. Putting the music you wrote for others behind you can create the space you need to focus on the new music you make for yourself.
Another good reason to sell your catalog is to invest in building or upgrading a home studio. Jimmy Iovine, the legendary record producer, founder of Beats Electronics, and former head of Apple of Music, said it’s the most important thing for an artist to do as soon as they get their first big check.
Having your own studio allows you to skip paying expensive studio fees, it allows you to create whenever you feel like it, and gives you more control over your sound. It will pay dividends for years to come.
And, although he didn’t think about it at the time, in this world of social distancing and quarantine… it will allow you to keep making music… even if your normal studio is shut down.
And it’s not all about music. Many of our clients want to make a large investment outside of music.
What do I mean by that?
We’ve helped dozens of songwriters raise the money they need to buy their first home. Or to invest in rental properties. Or to build an app that could make them a fortune.
Savvy songwriters and producers understand that if all their income is coming from music… that’s risky. They want to diversify their sources of income to build real wealth.
Jahlil Beats, the producer behind many of Meek Mill’s biggest hits, raised a lot of money on Royalty Exchangeto diversify and invest outside of music. He owns a bunch of apartment buildings, a sneaker store, and many other businesses in his hometown of Chester, Pennsylvania.
He knows he can keep making hits… but he wants to make money while he sleeps. And he’s doing it… his family definitely appreciates it.
So if you’re trying to diversify your income and build an empire… then selling part of your royalties can be a great idea.
Finally, a lot of artists we work with sell their royalties to give themselves a financial cushion. Royalties go up and down and it’s stressful to live royalty check to royalty check. Sometimes, even a small amount of money today can allow you to break that cycle and step on the gas.
Either way, having an emergency fund so you never find yourself in a situation that you can’t handle is tremendously liberating. Don’t want to work with that artist that doesn’t inspire you… if you have a cushion… you don’t have to. Stuck at home and unable to tour because of a global pandemic? That’s not so sci-fi of a scenario anymore is it?
Having cash on hand to deal with any unexpected blow puts you in a position of strength so you’ll have the calm confidence of somebody that knows they can handle their situation. Having a war chest allows you to make moves that wouldn’t be possible if you were scraping by on those quarterly royalty checks.
Then there’s debt. Debt takes many forms, and almost all of it bad. Maybe it’s a bad advance you took. Maybe it's credit card debt. Whatever the source, debt is a weight around your neck that holds you back. When your incoming royalties all go to paying back debt in small increments, it’s like running on a treadmill… lots of action but you’re going nowhere.
Selling even a portion of your catalog to raise the amount needed to remove that weight of debt will get you off that treadmill and start moving forward again.
Now there are a bunch of other good reasons to sell your catalog but I think you get the idea.
Biggest take-away here is… HAVE A PLAN FOR THE MONEY.
Don’t just sell your catalog to sell it.
So start thinking about it now and make your plan.
Now, let’s talk about the next secret to selling your catalog and getting an outrageously good deal.