Royalty Exchange made an update to their platform that will fundamentally change the velocity of deals: the ability to counteroffer on the eXchange. It may sound basic as this is not a new concept in the world of auctions, but this something that has not existed on Royalty Exchange until now.
Here's a quick overview from the Royalty Exchange press release:
"When an investor makes an offer for an asset, the owner receives an email notification with a link to the listing in question. Previously, the asset owner could only choose to accept, reject, or ignore an offer. Now, as the name implies, the owner can send a counteroffer which can only be accepted by the investor making the original offer."
This reduces one of my primary gripes about purchasing catalog rights on their platform: the amount of effort it takes to actually get an offer accepted. I've written about this previously here, but if you don't want to go back and read the article then here's the important snippet:
"I've made 100 or so bids on royalties over the past 4 months, and only had 1 of them accepted outside of the list price. That process can be exhausting and frustrating. It seems that many catalogs are listed without the owner really having a desire to sell."
Now that the owner can counter my offer I'll know immediately if they are motivated to sell, and how far off we are on the dollar figure. I'm so ridiculously excited about this! I think it's one of those changes that will quickly be viewed with wonder as to how this royalty investing world worked before it existed.
I was curious to see how this change would play out in reality however. Sometimes changes look good on a whiteboard but land with a thud when actually put into existence. Well it seems like we already have a solid example of this playing out as designed within the first day of launch:
Hip-Hop Publishing Royalties ft. Ja Rule: For this listing there were 8 counteroffers made between bidder and seller. The bidder started out wanting to pay $55,000 but the seller wanted $65,000. They eventually arrived to an agreed price of $60,501 - not exactly splitting the difference but damn close.
Here are a few other examples of the counteroffer functionality being utilized (although a counteroffer bid wasn't accepted):
These are all beautiful sights to see! Can't wait watch this progress from here.
I'm 3 months away from being ready for my next music catalog investment. I'm sure that between now and then many more buyers and sellers will utilize this catalog feature with success, which will hopefully lead to more buyers and sellers coming to the eXchange. I know I'm going to be paying close attention as I really do think this is going to change the game.
One thing is for sure, the world of music royalty investing is rapidly expanding! Please join our little group on Reddit to follow along with all of the developments in this exciting asset class.
Now if someone would only solve the high minimum investment barrier to this asset class, then we'd really see how high it could go. Stay tuned.
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