The Royalty Exchange Effect

As a platform, we can bring the benefits of royalty investing to far more investors and music creators than any buyer can.
March 9, 2021

Today, Fast Company announced that Royalty Exchange was named to its list of Most Innovative Companies for 2021, in the Music category.

It’s an incredible honor, and we thank Fast Company for shining their light on what’s happening beyond the splashy headlines in the music catalog space. After all, we’ve championed music royalties as an asset class that benefits both investors and music creators for five years, well before it became mainstream news.

Since then, royalty investing has gotten a lot of press, most given to the big funds doing the buying. Hipgnosis. Round Hill. Primary Wave. They’re big funds writing big checks to big artists. It’s a sexy story. We get it.

But there’s a difference between those funds and what we do… Royalty Exchange doesn’t buy or sell royalties. We’re an online platform that brings buyers and sellers of all sizes together. As a platform, we’ve streamlined a confusing process and eliminated gatekeepers... allowing everyone to get in on the action and reap the benefits.

Here’s how. No matter how much the buyers you read about spend on music catalogs, they’re limited in the overall impact they can have industry-wide. When you raise billions of dollars of capital, you have to spend it in big chunks—$20 million, $50 million, $100 million deals. That naturally limits transactions to the biggest catalogs… the Bob Dylans and Beyonces of the world.

That’s a relatively small number of available catalogs, and competition for them is fierce. Hipgnosis, perhaps the most active buyer in the space, has only conducted something like 60 transactions in the last few years.  

Individually, these deals seem huge. But looking at it from an industry-wide perspective, it’s a drop in the bucket. No matter how much money these funds raise, or how many big catalogs they buy, there’s a limit to how many artists they can help, and how many artists can benefit.

Platforms have no such limit. As a platform, Royalty Exchange is not a buyer nor a broker, but a marketplace designed to bring together ALL buyers and ALL sellers. As a platform, there’s no limit to the number or size of artists and investors who can benefit.

Investors come in all sizes. Some only want to spend a few thousand dollars. Others want to spend millions. Catalogs come in all sizes as well. Some artists want a deal for their entire catalog, others want to cherry-pick select songs. Our platform simply matches the appropriate investor with the appropriate catalog. No limitations.

In five years, we’ve facilitated more than 1,000 transactions. They range from as low as a few thousand dollars to over $3 million.

Individually, few of them will attract headlines. But without our marketplace, the artists we’ve served would have been shut out of the boom in music catalog sales. There simply wouldn’t be a buyer for them.

That’s the power of a marketplace. It chips away at the old power structure of the industry. It opens it up to the historically ignored or disadvantaged. The more we open it, the more capital will flow freely to creators at every level, not just the superstars.

Given all the hype we’re seeing today around investors and music, it’s funny to recall our early days when songwriters would ask us, “Why would anyone want to buy my catalog?” The idea seems absurd now, but not long ago, rightsholders didn’t believe their modest catalogs had value at all.

Times have changed. And we’ve changed them. The more we expand our marketplace, the faster these changes will accelerate. The big checks written for just a few big artists won’t change an entire industry. But a marketplace that empowers all artists will.

It already has.

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