Royalty Exchange Transactions Pass $75M, Helping 875 Creators
The Royalty Exchange, a digital marketplace for buying, and selling music catalog, announced that it passed the $75 million in transactions in May, just 4 years after its 2016 relaunch.
According to the Royalty Exchange, $25 million, a full one-third of the full transaction value took changed hands on the platform in just the last year.
Royalty Exchange was quick to point out that the reported value of transactions reflected more than 875 separate trades, representing an average transaction price is $70,000 instead of a handful of blockbuster deals.
“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,” Royalty Exchange said.
“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,” they added.
The change comes as investors look to diversify portfolios amid uncertain times, and with a market that’s flush in capital.
“Royalties are paid on regular known dates. You know that it’s coming. It’s not like a dividend. You know it’s going to come at a certain time and that the rates are sort of set – they’re set and controlled. There’s no question about what that royalty rate is,” Royalty Exchange Director of Communications Antony Bruno told Forbes in a recent interview. “If the stock market crashes, the royalty rate stays the same. If the bond markets go sideways, royalty rates stay the same. If you have money in royalties, that royalty check is going to come consistently and regularly no matter what. And that’s a nice hedge when you’re looking at a broader portfolio.”