Royalty Exchange Passes 1,000 Marketplace Transactions

The more that the market for music investing expands, the more that all creators will benefit, not just the most successful few.
October 8, 2020

This week, Royalty Exchange passed an important milestone—1,000 transactions completed across the marketplace.

This number is just as important to us as the total dollar amount it represents (which by the way is now more than $84 million). That’s because the scope of rightsholders we’ve been able to serve across these 1,000 transactions is far greater and far more inclusive than was possible in the music business before we came along.

Unlike the investment firms and funds making headlines with just a few dozen multi-million acquisitions of big-name artist catalogs, Royalty Exchange got to this point facilitating far more, but smaller, transactions… mostly under $1 million each.

That means we’re serving the artist who would likely never have the chance to participate in the booming market for music catalogs we’re seeing today. Many of the artists who use Royalty Exchange would have been left behind and out of luck.

“Big investment firms and funds only write big checks to big artists,” said Royalty Exchange partner Anthony Martini. “But you don’t need to be Beyonce or Bruno Mars to attract investors for your catalog. I joined Royalty Exchange because it’s the only company built to serve all artists, not just the 1%.”

That’s what makes our marketplace different. We constantly work to reduce the barriers between artists and investors… between creators and the value they deserve.

Just look at how these 1,000 transactions were achieved—through a wide variety of deals and investing formats that collectively served to broaden the market for all.

The vast majority of these transactions involved music catalogs, but also included a smattering of non-music assets like film royalties, trademark royalties, and other types of intellectual property.

It also didn’t only include auctions. While auctions represent about 70% of all-time total transactions, they only represent about half of the transactions that took place so far this year. That’s because we’ve added other ways to connect artists with investors.

These include:

The Market

The other half of this year’s transactions took place through something we introduced last year… The Market. We originally launched it as the Secondary Market because it was created to allow anyone who bought royalties on our platform the ability to list them for resale. Not only did this add a much-needed layer of liquidity to the royalties acquired on our site (which in turn makes them more valuable as an asset for which they’ll pay more), but it allowed investors who can’t participate in auctions the ability to browse through dozens of assets at any time, and make offers at their convenience.

We’re now expanding The Market so artists can also list their catalogs directly to investors, bypassing the auction process. This will give artists who don’t want to risk the uncertainty of an auction the ability to set the price they want and wait for the right offer to come in. More to come on that soon.

Private Syndicates

It’s also worth noting that about 10% of the total transactions figure stems from activity surrounding our Private Syndicates. For larger catalogs ($2 million+), we do something a bit different. We create an LLC that acquires the catalog directly, and then offer shares of the LLC to accredited and institutional investors, which grants them a proportional share of the royalty income it generates.

We’ve offered three such syndicates, featuring royalties generated by music from the likes of Cage the Elephant, Dire Straits, and Eminem. The shares acquired in each Syndicate contribute to the overall transaction total. We’re evaluating several new catalogs for potential Private Syndicate treatment in the near future, so stay tuned.

The Power of Markets

Between Auctions, The Market, and the Private Syndicates, there’s a common thread—a transparent, free market. That’s what makes this 1,000 achievement so special.

Our marketplace welcomes investors of any level of purchasing power, not just the richest few. That means artists who don’t attract the attention of the larger funds can find the appropriate investor for them. Everyone can participate.

“The more that the market for music investing expands, the more that all creators will benefit, not just the most successful few,” said Martini. “Our marketplace unlocks the value of music for everyone, and ensure that value flows to those who deserve it most… the creators. ALL creators. That’s how we got to 1,000 transactions in less than five years, and how we’ll get to the next 1,000 transactions even faster.”

Music Transaction Highlights

Highest Price (Auction): $900,000
HipHop Publishing Catalog, including Drake, Meek Mill, French Montana, Diddy, and others

Highest Price (Market): $300,000
“In My Feelings” by Drake

Highest Sale Multiple (Auction): 17.41x
“Wildfire” by Michael Martin Murphy

Highest Sale Multiple (Market): 22.41x
Pop & R&B Catalog w/ Ariana Grande + Tank

Most Bids (Auction): 107
Global Pop Hits

Most Offers (The Market): 50
Pop and R&B From Shakira & Jamie Foxx

Private Syndicates
Cage The Elephant: co-publishing
Eminem: producer royalties
Dire Straits: management commissions

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