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Hi; Has anyone worked with Royalty Exchange? They broker your catalog to investors. So you can sell all or part of your catalog. Wondering if anyone has done this or had them estimate your valuation?
Thanks!!
They have been around for a few years but no info on anyone that has worked with them.
I’ve heard of them too and checked them out. It would be interesting to see some competition for them. I browsed their listings and it looked interesting but I didn’t pursue it any further.
OK. Thanks. I am wondering if you think there is any danger in allowing them access to my catalog and royalty receipts so they can valuate my catalog?
What do they want to access? Your PRO account? If you are uncomfortable with that just send them copies of your statements.
@Composer of Notes – Typically you will get 5 times the last 12 months royalties. I have been following the royalty exchange story for 2 years now.
If your PRO statements over the last 3 years (For example) show that you consistently earned $10,000 a year. An investor would “invest in” or “purchase” your “future royalty revenue stream” for $50,000. This is how I see it and I am only using 10K for the sake of example and using a nice, easy round number.
Just look at your last 3 years of total PRO earnings, come up with an “average annual income” based on 3 years…multiply by 5 times your “average”…that should give you an idea of what an investor would pay.
Some “catalogs” or “songs” have fetched 6 to 10 times average annual royalties. Just start eye balling that market and you will eventually understand what they are doing.
For me, I just want my royalties to continue to roll in. I do not need to “raise money” so to speak.
One of the best investments I saw on royalty exchange was 500 K for the Sesame Street tunes. That was a good investment for sure. Those tunes will continue to consistently earn 100K a year in royalties I’d think. That investor made a good move buying that catalog. Just my opinion.
Thanks Music1234 for the info!
I’d like to also add that I have never seen anyone sell PRS, GEMA, BUMA, or any foreign PRO royalty streams. This seems to be 100% centered around USA PROS – BMI, ASCAP, and SESAC.
I suppose things can get very merky and dicey if European writers tried to put their PRO royalties on the market for investors.
Basically once a deal closes – the future royalties immediately get assigned to the buying investor. It really is kind of like buying shares of a stock on an exchange. You buy the shares of Proctor and Gamble or Coca Cola, collect dividends “royalties”, but you also have the right to re-sell the stock, or in this case the “share of the future PRO royalty income stream”.
It’s a very cool concept. Some folks may need to raise money faster from their compositions and property. I prefer to just collect my “dividends” or “royalties” or “rent” long term.
Sesame street songs were put on the block because the charity that inherited the catalog just wanted hard cash now. They did not want to deal with a future royalty stream. The investor of that catalog will have the last laugh imho.
Thanks for the info! Yes Art, they want my PRO statements and complete catalog. Not sure I want that info floating around.
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