Anthony Martini on Music Royalties, Royalty Exchange, NFTs, and Managing Tyga and Lil’ Dicky

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Just last March, Anthony Martini became the CEO of Royalty Exchange, a marketplace where buyers and sellers can trade music, rights, and copyright. He explains how royalties can benefit middle and lower-tier creatives in this economy of hit records, highlighting what Royalty Exchange is capable of as a platform. He then talks about the practical applications of NFTs. He also weighs in on what he has learned as a former artist, an artist manager, and the founder of an independent record label.

Whether you’re a musician looking for funding or an investor searching for an asset to park your money in, this is the episode for you!

Episode Highlights:

[03:50] The opportunities in selling music catalogs and publishing

[06:48] How Royalty Exchange has grown and what it has to offer as a platform compared to other investment funds

[10:08] About multiples, the “dollar age” metric, and why music royalties are attractive assets

[14:40] Anthony’s insights on hip-hop from a streaming perspective

[17:18] The advantages of getting into the NFT market and the importance of really collaborating with artists

[22:32] On the legal feud between Roc-A-Fella co-founders Damon Dash and Jay-Z

[29:55] On setting up deals with digital distributors, artists, Youtubers, and Twitch streamers

[36:36] What it was like to work with big record labels, manage Lil Dicky and Tyga, and founding Commission Records

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Host: Dan Runcie, @RuncieDan, trapital.co

Guest: Anthony Martini, @realantmoney, Royalty Exchange

Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo


Dan: Hey, welcome to the Trapital podcast. I’m your host and the founder of Trapital, Dan Runcie. Today, you’re gonna listen to a conversation I had with Anthony Martini who is the CEO of Royalty Exchange, a marketplace where buyers and sellers can trade music rights and copyright. This is a booming time and a hot market for royalties and it’s a great time to have this conversation too. There’s been so many artists that have been selling their catalogs for big numbers, there’s been a lot of music investment funds that have been buying up these catalogs, and big major publishing companies have been buying them up too.


There are a few things that are driving this. First off, interest rates are low so it’s cheaper than ever to borrow money. Second, streaming and the streaming era gives us better data on consumption. We can go back and see how well certain songs perform and predict their performance moving forward, and it was very hard to do this. It was almost impossible in the CD era and any of the other times before, but, third, this is a non-correlated asset and this is a very hot time in general for alternative asset classes. People are trying to find other things to put their money in and when the economy is booming, people listen to music and when there’s a recession, people listen to music. That’s one thing that’s consistent and that is what’s attracted a lot of investors to this space, but it’s not just these big funds that are raising billions of dollars that can get involved. Royalty Exchange makes it easier for, (a), the artists that aren’t superstars to be able to use the platform to get money for things but still maintain the ownership of what they have moving forward, but it also gives an opportunity for retail investors to get involved too and be able to participate in the funding opportunities and what’s happening here.


In this chat, Ant and I talk all about his decision to become CEO and what it’s been like working. He recently became CEO in March of 2021. We talked about how these big major catalog sales have impacted the deal flow that he’s seeing on Royalty Exchange. We also talked about some of the overlooked investment opportunities too. What are some of the areas that people may not be realizing or what are some of the opportunities there? And we also talked about NFTs. Royalty Exchange recently launched the opportunity for artists to sell their rights and sell their copyright as NFTs and some of the more creative opportunities that can hold and how that can really open up the platform for so much more. And then we talked about Ant’s background as well. He ran an independent record label called Commission. He had managed and worked with artists like Tyga, Lil Dicky, IDK, MadeinTYO, and I think so much of his experience there and doing what he can to support the artists and understanding how this industry works informs a lot of his work at Royalty Exchange too so it was a great 360 conversation there. And Ant is a former artist too. He gets this and it’s great to be able to just talk full circle about everything. Here’s my conversation with Ant Martini.




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We got Anthony Martini here who is the CEO of Royalty Exchange and it’s an exciting time to be talking to you. I feel like you joined this company, you became CEO, and this royalty market is blowing up right now. How does it feel? 


Ant: It feels great. I like to think I had a little part in things heating up so, you know, it definitely feels great. It’s interesting because I think in the past, there was almost a stigma on like selling your catalog or selling publishing or anything like that where the perception has totally shifted, I feel like, in the past even year or so, you know, probably because you see the headlines, you know, Bob Dylan sells his catalog for $300 million, these huge catalog deals and then I think some of the other artists, they just started looking around, like, “How do I get in on that?” and it’s been an interesting time, I think, also between, you know, COVID hitting and the pandemic shutting down touring and it just became a way a lot of artists and creatives were looking for other ways to keep income coming in and we happened to be there at the right time.


Dan: Yeah, and I think with you, specifically, you are realizing that, yeah, there’s all these headlines of what the superstars have done or the biggest artists but, no, there is an opportunity for the people who aren’t superstars to still cash in on this moment so that’s where I feel like the sweet spot is in a lot of ways for what Royalty Exchange is doing and I’m sure a lot of that’s relevant for what you’ve done in your career as well —


Ant: Yeah.


Dan: — up to this point.


Ant: 100 percent. That really is the mission statement really, you know? It’s kinda like the superstar artists and producers, they’re good already. They’re rich, they’re making money, they have huge record deals, cut deals, all that kind of stuff but, you know, there’s a whole class of musicians that are below that, middle and lower tier that they might be making a living and maybe some are making a better living than others but they’re still not able to, you know, go buy a house or buy a car because they can’t get approved for a loan because it’s an unorthodox type of business that they’re in, you know?


So, there’s all sorts of, you know, obstacles, I think, for these mid-tier creatives that no one’s really offering them a solution and, you know, also when you look at hit records, there’s like 5 to 10 writers on every hit record, right? So it’s like not all of them are the superstar, so like these other like working-class musicians are just as important to the, you know, the whole economy of hits as the superstars but they’re not always the ones to benefit and so we like to be the platform that allows them to get some financial stability and empower them that way through, you know, the IP.


It’s like they’re creating these ideas, this IP, they should be able to leverage that. It’s obviously valuable. If the superstars are getting the deals, people are paying a lot of money for these deals so it’s valuable. The writers and artists have a small piece of that also, you know, benefit. That’s where our sweet spot is, Dan.


Dan: And how has this movement impacted the sweet spot specifically for you all? Of course, we’re seeing the dollar amounts and people are following what the large music investment funds are doing, but for you all, how has the business of Royalty Exchange been impacted? I’m sure it’s grown but any stats you can share on just how much impact it’s been? 


Ant: Yeah, we’ve definitely grown. I wanna say, you know, we’re probably up almost 50 percent in the last year just from the prior year, in terms of even like engagement, signups, investors signing up for the platform, and then also artists coming in and inquiring about doing deals. There is nuance to what we do where it really is a benefit. I see the differences in what we do as a benefit but some people kind of don’t understand — they lump all these kind of deals in the same pot but they’re different where Royalty Exchange, we’re not the ones buying the catalog, we’re simply a platform that connects the investors with the artists that are looking to do deals and we have more investors on our platform than anyone in the world. We have over 30,000 investors.


And then, also, another difference is there’s no sale of your catalog. You don’t give up IP. It’s really almost like leasing your royalties and so the benefit there is, okay, say, you’re a young artist and, you know, you wanna take some money off the table now, do a deal, then you get it back 10 or 30 years from now, then you could go sell it again for good or do whatever you want at that point but it really is about giving you options and, again, we are the platform that just kinda connects the people that are looking to make deals.


Dan: That’s interesting that people are grouping you with Hypnosis or Round Hill or some of these bigger investment funds because it’s a completely different thing. They are investment funds, you are a marketplace, but I’m sure that people are just probably grouping everything related to this ecosystem in one thing.


Ant: I mean, it’s a complicated space, you know? Like publishing and royalties and rights, you know, like it’s purposely complicated in the music business because the big major labels and major publishers don’t really want the artists to understand like what they’re signing half the time so it’s purposely complicated and it’s outdated, but so there’s a lot of misconceptions out there but, yeah, again, being the marketplace and being the platform that is empowering all this, we’re actually aligned with the artists’ wants and needs as opposed to being on the other side of the table where it’s like we’re negotiating against each other, I’m trying to get the best deal.


Even though Hypnosis and Round Hill, everyone’s paying fucking crazy money, they’re paying crazy money for a reason because they’re gonna make crazy money off, you know, so like you gotta think, if they’re willing to pay me $300,000, I wonder what they’re gonna make on this, you know, when they go down, whether it increases the valuation of their company and, you know, all this kind of shit. We are on the side of the artists of, “Let’s get you the most money possible, let’s maximize the value of your work,” and we do that through a marketplace because it’s transparent.


You know, when you go into an auction scenario, investors are bidding against each other so it’s gonna — the highest price is gonna win so we always wanna achieve that for the artists. We’re not like trying to hold back anything, we want you to get the most money you could get.


Dan: Makes sense. And I’m curious what it’s like on the artist side, especially for some of the younger artists because I think that the narrative for royalties itself is that the catalogs that tend to be more valuable are the ones that are older, right? Like they have that longer consistency, but for some of the younger artists, especially in the streaming era, it can be harder to have those 5, 10 years of proof point so what are those conversations like? I can imagine that’s very different from, let’s say, a legacy artist from the 2000s or the 90s coming to talk to you.


Ant: 100 percent. So, that’s where, you know, the whole multiple sort of measuring stick comes into play and everyone’s always so interested, like, “Oh, what kind of multiple are you gonna give me?” because that’s what has been put out in the media, like this is what you need to look at, this is the fact of the multiple. It’s not really — like we invented a metric called Dollar Age which is how we sort of judge, you know, where you are and your catalog because, you’re right, the newer the catalog, there’s still gonna be a decline, you know, you have to factor all that stuff in.


If you just made a hit last year, that was like, you know, number one on the charts, all this shit, yeah, last year, you made a shit ton of money so we can’t base this deal on just last year’s performance because it’s gonna probably be half next year, half after that, and then it kinda levels off and so that’s what fucks up the multiples. If you look at just the overall amount of money and say, like, “Well, what can I do with this or the time value of the money?” it’s less about a multiple conversation, it’s more about like what are your motivations? Like what do you need the money for?


And we’ve had plenty of potential deals where it’s been younger producers or younger artists where we told them to wait, like, listen, this is only two and a half years old, like wait another six months and come back and we’re gonna probably be able to get you a better price because the data is there and we can factor it in a little more accurately but everyone has different reasons for why they wanna do a deal but if we don’t think it’s gonna be a good deal for them at that time, we’ll actually tell people just wait a little longer because you’ll get a better deal.


But, yeah, the multiple metric is really what kinda skews all these conversations because, again, people look at the things they see in the news and it’s, yeah, like you’re getting 25 times over but this is on a 40-year-old catalog, like there’s no decline happening anymore and now you’re buying it for life so even if it is a 35 multiple, after 31 years, you’ve made your money back so it’s kind of just the long play. But, you know, you’re not gonna see that with the younger artists because it’s still gonna continue to decline even with like rising streaming rates and all that shit.


So, you know, we try and that’s part of what we do in our evaluation process is trying to educate the creative as well as the investors so like, well, you know, you come to us, I wanna do a deal, okay, give us access to your statements, whatever you wanna put into the deal, we’ll analyze it, we’ll go create a deck for you, we just try and arm both sides with as much data as possible so they make the best well-informed decision and, you know, we’ll just — we’ll walk you through each step of like here’s your top songs, here’s the sources, here’s what it’s earned over the past few years, here’s what we think it’s gonna earn, and then we’ll give you a price of what we think, based on the data of over a thousand deals that we’ve done, what investors will pay, and, as an artist, if you are on board with that, we move forward and get it in the system.


Dan: The other tough thing too about the multiples and the whole comparison with that is the buyers and the investors aren’t always the same. Selling to a passive investor that’s gonna be chilling on it whether it’s a pension fund or someone looking to diversify their portfolio is very different from someone that’s going to maximize this asset and try to get sync placements and try to do all these other things.


Ant: Exactly, yeah, and, I mean, obviously, you’re pretty well versed in the space so you know the difference on that, but like, yeah, a lot of our investors are — they’re just passive investors that are looking for a steady yield or just to diversify their portfolios and, you know, the thing is, music royalties have become really attractive because they’re not correlated to any market, you know?


Like, well, anything could be happening in the world, you could own all types of stocks in these blue-chip companies and, you know, the economy goes to shit and now you lose a bunch of money, that’s not really gonna happen with music royalties because it’s not tied to a market like that and people are gonna, as long as music is streaming and people are consuming it, which they will, even through, you know, as we saw, even through a pandemic, like it doesn’t affect royalty pricing so, you know, it’s become an attractive asset for investors to just park their money in.


Dan: Definitely. One thing that I’ve heard from people, especially on the investing side, is some hesitancy with hip-hop and I wanna know what you think about this because it seems as if, because of sampling and lack of radio play and some of the legal challenges, that some investors are a bit more hesitant with hip-hop catalogs as opposed to classic rock or pop, even if they’re around the same age. What’s your take on that and what have you seen on Royalty Exchange?


Ant: No, we love hip-hop. Honestly, like, I’d say probably 80 to 85 percent of our deals are hip-hop, you know, based, whether it’s the producer, writer, artist, and, you know, as far as like radio, any of that, like, to me, I mean, hip-hop, from a streaming perspective, that has proven to be even more consistent than rock or any of these other genres, you know? Like hip-hop is the dominant genre.


So, every investor that we have in our system is very bullish on hip-hop and, you know, sometimes, they don’t even know the artist and they just, you know, like, it’s like some old, you know, a guy in like Ohio who has a bunch of money and wants to, you know, he loves the space and then we put up like an NBA YoungBoy song and he fucking buys it right away and it’s like, does he know him?


Like sometimes I wonder, like if he’s going and researching and like listening to the songs and be like, “Oh, this is cool,” you know, and they tell their kids like, “I bought a piece of this NBA YoungBoy song,” you know, like it’s funny but like we see those kind of assets because, you know, people — they get snatched up quick. 


Dan: There was that one story this reminds me of, there was some investor in Texas that had bought Cardi B’s “Bodak Yellow” or he bought a slice of it, had no idea who she was at all. 


Ant: Yeah.


Dan: Yeah.


Ant: But, a lot of times, it is a strictly financial play for some of these investors so they’re just — they’re looking at the data and they’re like, okay, some of them may know the song, some of them may not but, yeah, there’s definitely — we have investors that have no idea what they’re buying sometimes, they just — they see the data and they say, “Oh, this is a good investment,” and then a song like “Bodak Yellow” fucking takes off and they make out.


Dan: Has the profile of investors changed at all since this boom has been happening? Because, from my take, I can see a path where there’s more investors like we’re saying that care less about the music but care more about the investment opportunity that has been moving with this rush maybe relative to the folks that were big on Royalty Exchange before the past couple years.


Ant: Actually, like I’ve seen — I mean, more recently, I’ve seen a different type of investor coming on board with like the rise of platforms like Robinhood or even just like the crypto boom and like the NFT boom, you know? We’ve gotten a bunch of those kind of investors now, like people that are in the crypto world that are looking at these as like alternative assets so that’s been interesting to see over the past, you know, three, four months, even with that.


Dan: And you all now let people sell NFTs as their catalogs or as their assets to put on the platform now, right? 


Ant: Yeah. I’m real bullish on like just the NFT market and all that and I think a lot of people, even now, are kinda naysaying, “Oh, it’s a fad,” and, you know, the boom hit and all that but like I don’t think that that’s true, I think it’s recalibrated and I think that, you know, practical applications of NFTs are gonna be what the future is. It’s really just like a digital sort of like certificate of authenticity for certain things so it’s gonna be applied to all sorts — I think, especially for the music business, it’s right to have all sorts of applications but I put a big onus on our team to, “Let’s figure out how to sell these as NFTs,” because it seems so perfect to correlate with like a catalog as represented as like a digital asset and the interesting part is it’s opened up a part of the business where, a lot of times, people, even though it’s not true, but a lot of people we’ve been talking to would think to do a catalog deal, you have to sell your whole catalog and you don’t have to do that, at least not with us, like, you know, you could sell one song if you want and, with NFTs, we’ve done them as one song, we’ve done a few as like one song and I think that’s opened people’s eyes where it just like lowers the barrier of entry of like, “Oh, let me get into this kinda selling my catalog space and see how it goes,” and they could dip their toe in the water with just like one song and not feel like they’re fully committing their whole catalog and it’s like what happens after that, and that’s been really interesting to see.


And I sort of always had that hypothesis, even just with our marketplace in general, that if we could break down, you know, these assets into smaller pieces, it would create more engagement, like you see with the rise of like these retail investors, like a Robinhood, people are willing to just bet on some shit that they think is cool, like, you know what I mean? So it’s like if we could open it up and now you can come in and bid on a piece of like a Biggie song for 500 bucks, like you might overpay actually because it’s cool to have and it’s not that much money where you’re like, oh, it’s not like a $30,000 investment which, technically, is still low in this world but, if you’re an average person, that’s not really accessible for you.


So, NFTs have really opened that side of it up for us and it’s been interesting to see just the influx of interest from artists that wanna now turn pieces of their catalog into NFTs has been, you know, really exciting.


Dan: And I think the cool thing with NFTs too is that, as a catalog, you could mix it with some type of artwork or some type of token so then it can get past maybe more of the pure transactional aspect of royalties that may have hindered some from wanting to get involved, but it’s like, no, you have your catalog and you have this little token thing so that people can then have that digital asset and I think there’s so many things that that could be done with, right? What if there’s an NBA Top Shot type of thing where the publishing thing is some type of visual that represents that album or represents that song. I think there’s so many things there.


Ant: Oh, goodness, yeah, like we’re fully diving into all those possibilities and trying to think like what can we add to the NFTs that we’re doing to make it even more interesting and different ways to experiment. I really just wanted to like get out there as soon as possible and plant the flag that, “Hey, we’re doing NFTs,” we’re doing it in a different way where you’re actually earning an income, promoting it, and just kinda, at least, you know, set the baseline there and then we’re gonna start adding capabilities as we go but, you know, it’s really just like wanting to beat everyone to the market.


Dan: Right. What are some of those capabilities that you think you may add?


Ant: I mean, the only — you know, the tricky part that you sort of have to get around with some of this stuff is like rights issues with the label, you know? Like what does the artist themselves own and control that we could basically offer within an NFT or like without having to be encumbered by a label or publisher that’s gonna want their piece or they’re gonna hold it up, you know, like as much as we could stay out of that like ecosystem, we do, so it’s really about just figuring out like what makes sense for the artists and what they’re willing to do.


It can be a different menu of additional content or different exclusives with each NFT. It really depends on like what the artist wants to do, but like adding access to shows, you know, I mean, like it’s — like all access pass essentially is built into the NFT or, you know, maybe they get like the first listen of a new song or, you know, there’s all sorts of things like that that could be built into it. Again, it’s about collaborating with the artist a little bit on that and what they’d be willing to do.


And then also not trying to get too far out of the core of like what Royalty Exchange does and become like an NFT marketplace. We just wanna kind of keep it all wrapped up where it’s a focused idea but we’re doing cool shit. 


Dan: That makes sense. That makes a lot of sense. And how much work are you doing now on the demand side? So, of course, you have the marketplace set up and it’s attracting both investors and artists but are you going out there and trying to get after some of the bigger deals? Like, for instance, I know the time that we’re recording this, Dame Dash is actively selling or auctioning a third of his Reasonable Doubt and Rockefeller Records asset off as an NFT but that’s a third of the publishing catalog, right? Like is that an example of a type of deal that you may have been like, “Oh, how can we get a piece of this over at Royalty Exchange? How can we get involved?”


Ant: Oh, 100 percent. As soon as I saw that he was getting sued for selling a piece of Reasonable Doubt, I was like, shit, we should go talk to him because, I mean, he has the right to do it, you know what I mean? Like no matter what Jay-Z says, like he has the right to do that. I know it was fucking up Jay-Z’s launch of his little NFT that he was doing which is fine, that’s really the only reason why they sued him, he was not out of bounds so once I saw that and kind of read what was underneath it all, I was like, shit, we should get in touch with Dame Dash and just try, you know, I’d love to have Reasonable Doubt on the platform but, yeah, like I, because I come from the traditional side of the business from artist management and record label and so, you know, a lot of my relationships are with artists and managers and people in the business and that’s really been one of my main just like roles is soliciting and really just telling people that we exist, you know?


Because I — when I first heard about Royalty Exchange, I never heard of it before, you know what I mean? And someone who’s an investor in the platform was like, “Hey, check out this company. What do you think? I’m thinking of investing,” and I was like, oh, this is really interesting, you know, and ended up a few months later like consulting and then that evolved into being CEO but my whole thing was like, listen, if I never heard of it and then I got excited about it, the more people that I could tell about it, everyone’s gonna — it’s a great model, it’s a great idea, and so part of what I’ve been doing is just tapping into my network and seeing who makes sense for the platform and we brought in, I mean, there’s been a bunch of deals that have come through like that and we’ve had a lot of conversations, but then also too some of the, again, the higher level artists, they talk about the multiples of Hypnosis and this and that and I’m like, all right, you know, it’s a different idea but, you know, we could compete so we’ll see. The thing is, I love servicing, you know, sort of the 99 percent but, hey, like if we could get, you know, some of these big splashy deals in too, you know, I think that’s all in the plan. 


Dan: Makes sense, yeah, and I think too with that, so much of your job is communicating and evangelizing the product, making sure people know that it’s out there and also I’m sure making sure that people understand, of course, there are risks with anything, it’s an investment, but it’s an opportunity. So I know, for instance, recently, there was the news with A Tribe Called Quest and then them putting out their — at least a portion of their catalog on the platform and then I know there were some news reports after that about whether or not they knew about that so I’m sure part of your job too is either just being like, “Hey, this is what happened with this. This is where we’re at,” and so on. 


Ant: Exactly. Well, I mean, yeah, that’s an example of, again, like, you know, we vet out any asset that comes into the platform, you know, we make sure all the contracts are there, we go through the agreements, we reach out to everybody so, if it’s good to go, it’s good to go, you know what I mean? Like — and we have no prior knowledge of if there’s like a history with someone and people don’t like each other, you know? So it’s kinda like, you know, you’re coming to us just to value an asset. As long as it’s all, you know, aboveboard, we could do it and so that’s sort of what happened with the Tribe Called Quest thing.


I think the main issue with that was, again, people don’t understand the space so much so a lot of the media that just reported it, they wanna glom on to the headline of, oh, A Tribe Called Quest, but it was clear when we sent out the press release that it was a portion of their catalog from a third party. It wasn’t like we didn’t do a deal with A Tribe Called Quest, like it was never positioned as that, because people don’t really understand how these things work and how multiple entities can have ownership of a song or a catalog. It just was put out kinda in a lazy way.


And, yeah, Ali, he was caught off guard and Q-Tip were caught off guard, they were like, “What the fuck? We didn’t do a deal with Royalty Exchange,” like you know what I mean? And so they hit me up and I ended up — I actually went out and met with Ali and we talked and he gets it. It was just — it was through like an old, you know, prior settlement that they had with one of their early, early managers back in the day and he somehow, you know, negotiated a settlement to get some percentage of something from the label and I guess he died but he sold it so it’s been sold a couple times between them and even the guy that brought it to us, he has no relationship with A Tribe Called Quest and they don’t know him but there’s no like bad blood between them, but it was just like, I guess, the sore subject of the legacy of how this royalty was acquired and then them being caught off guard and being positioned like they did a deal with us when they didn’t and so it got smoothed over, you know, I explained everything, like our platform to them and how it works and they actually were like, “Oh, this is fucking great,” like, you know, they introduced me to Phife’s manager, we’re talking about maybe doing something there so, you know, turned into a positive but because there’s so much, you know, it’s just a confusing space and especially like, you know, once news stories get out there, it turns into whatever, you have no control over what people print after that but we vet out every deal and make sure that we actually — or whoever’s bringing us the asset actually has the right to do that.


Dan: Yeah, because I remember when that news came out, there was the original headline when it was put out, and I said, “Well, this is owned by a third party, like what’s going on here?” I had the same exact thoughts so, I mean, I’m with you on that but then, in some ways, this isn’t too different from the Dame Dash and Jay-Z Reasonable Doubt thing where they came out and they said that, “Oh, you don’t have the right to distribute this or this or sell this,” and he’s like, “Well, I own a third of this and I’m selling my third.”


So, part of it is how it was worded. I think there were some things there that could have been more clear but it’s also this environment where you have Taylor Swift and Scooter Braun and Big Machine and all of that and when there’s ever any headline about the artist and people are trading their assets and they don’t know about it or something like that, things get all haywire so, of course, I know it comes with the territory with your job but I can imagine how frustrating it can be sometimes.


Ant: Oh, I mean, honestly, like I — it didn’t really bother me much, like so once I had the conversation with the group directly, it was all good and they actually, you know, I tried to explain to them like, “Look, we are a platform for the people that are getting fucked over for things,” you know, like it just so happens that this piece, you know, the history behind that, like we don’t know that, but, overall, it actually empowers the people that are involved with these songs that don’t have any leverage or don’t have, you know, like they’re not getting the big pub deal, they’re not getting the big record deal but they, you know, they make $30,000 a year or $50,000 a year off some royalties which is cool, like that’s great but like maybe they wanna buy a house, maybe they wanna buy a car, maybe they wanna invest back into their career, we’re enabling them to do that and we’re actually focused on the smaller guy.


So, they got it after that. They actually were like, “Oh, we should do something,” you know? And I was like, yeah, we should and like let’s figure it out and apologies and, you know, we sent just more clarifications out to make sure that it was clear but, again, we live in the world of fucking clickbait headlines, whatever, you know, like no one’s gonna click on the thing that just says like, Royalty Exchange whatever, A Tribe Called Quest was gonna get the clicks, you know, so I get it but it’s just miscommunication.


Dan: Right, and no one wants the nuance, no one wants to read nuance. People just want the…


Ant: Keep to simple headlines, we’re fucking dumb, like dumb American.


Dan: Exactly, exactly. So, from an investing perspective, what are some of the sweet spots? What are some of the opportunities that you’ve seen on the platform that you think are more likely to be overlooked or some things where you’re like, “Hey, we’re noticing a pattern here,” and this is something that people should be looking a bit more at and investors tend to miss them? 


Ant: I mean, the investors don’t tend to miss much because we have almost more demand, in a lot of ways, than supply, you know? So it’s about getting more deal flow which is also why we expanded, you know, since I’ve become CEO, like I come from the independent music where I come from running an independent label so I saw firsthand how hard — like the deals that you’re kind of forced into as an independent because you need money to finance your career and so we opened up, we did a deal with Vydia, digital distributor, where we’re funding advances for independent artists, where, in a similar way, we look at the data but it’s a different type of idea. It’s not like, you know, we’re buying your catalog for 30 years, whatever. This is more like a fixed return advance where we’ll look at the data and it can be a much shorter time period as well so the first thing we kinda tested this on, which went really well, was this rapper Money Mu out of Atlanta which coincidentally I actually tried to sign him like three years ago, like way before anything was even happening with him and it was not an expensive deal but, again, my partners at the time, I was partners with BMG and they didn’t wanna give him money or fucking sign this guy but it was like we should have signed this guy.


And so, anyway, he had a song that started blowing up, the song, “Hittin’,” and, you know, a bunch of labels were hitting him up and doing the same, like once they see something go viral or streaming like now everyone’s offering you money and you signed a record deal but he wanted to bet on himself and so I know the guy who runs his label and I hit him up and I was like, “Yo, like we should —” he was going through Vydia for distribution, I was like, “We just did this deal with Vydia, we should do something with this,” and so we looked at the statements, the song wasn’t that old so it was only about eight months of data, but we projected what it was gonna do and so what we did is — the way it was set up is we would have an investor put up $400,000 and they would make back $570,000 or something over the course of the time. Best case scenario, it would be two years, they make their money back, worst case like five years is how we projected it.


So, now, Money Mu would get this money and not have to give up any — he doesn’t give up ownership of his masters, he’s not selling royalties to any other songs, it’s just this one single that he’s doing a deal on but then he could take this money, reinvest it in his career, and continue to grow it without having to sign a deal and so we ended up, I think, because we went into an auction, so we ended up getting like $444,000 and then the payback amount doesn’t change, it’s just that investors will bid up until like it’s not worth it for them anymore but, yeah, he got, you know, almost 450 grand against one single and the deals he was being offered from, you know, every major label was like $600,000, $700,000 so it’s like it’s not that much more and those are for five albums, you’re signed forever, you lose all your rights, you’re only getting shitty royalties which means you’re never gonna fucking make money ever in your life so live off those advances.


This, we got him almost the same amount of money, he stays independent, he keeps all the money that he’s making and now he could take this, he went and shot videos, he got some more features, bigger features on his next song, you know, so it was like, all right, we’re helping essentially a small business, like you know what I mean? Like we’re helping you get the funding to reinvest in yourself and if you’re willing to bet on yourself, you can make way more money in ownership and that’s always what we advocate is like, you know, especially me, like me, personally, it’s like own your shit, like that is where the value is, you know what I mean?


Like you could get money, we could leverage people to get some money for it but if you own it and it’s successful, you could always sell it at any time and then the more successful you are, the higher multiple you’ll get on that. So, that enabled him to do that and that was the first of those type of fixed return deals that we did and now we’re doing more of those with different digital distributors. I’m talking to different distributors about like let’s implement this as almost like a dashboard item in your portal or if I’m an independent artist, I could see how much of an advance can I get. You don’t have to give up rights, you don’t have to give up ownership of anything, it’s kind of like, you know, just a button that you check and then you go through the process, but, from there, opened up creator deals overall, like so I was like if we could do this with digital distributors, we could do this with YouTubers, we could do this with Twitch streamers, we could do this with anyone who’s making a monthly income that we could look at and kind of, you know, create a formula of like this is how much we could get you and so then we ended up doing one with this YouTuber, CJ So Cool, and he’s a big YouTuber, he’s making decent money every month.

We ended up getting him $1.6 million off his YouTube ad revenue and he’s gonna end up paying that back in like 18 months and he’s taking this money and like reinvesting, he’s buying crazy cameras, he’s doing like all sorts of new like more elaborate kind of like sets and content which is gonna increase his fan base and we’ve already seen he’s done some of that already and his monthly revenue has jumped from like — it’s almost doubled. I don’t know if he wants his figures out there but it almost doubled what he was making per month since he got this money and started reinvesting in himself, so, technically, he’s making the same amount but he got money from us because the way that we do that deal is we’re splitting it 50/50 off the ad revenue.


We wanna keep the creators active, you know, like if an investor is investing, we want them to keep posting content so that the channel does well and they make their money back, and if they’re not making anything every month, they’re not really incentivized to continue posting so we did split 50/50 and, you know, he got this money and when it’s paid back, everything goes back to you anyway, you get 100 percent back, so he doubled his output and now he’s making the same amount he did before the deal but he’s still got $1.6 million and he’s making the same amount of money.


So I’m like, this is a model, you know, we could do that for YouTubers. You know, I’m talking to different Twitch streamers, anyone that, you know, we can kind of open a creator deal for. It’s a huge, I think opportunity and investors have really like responded well to that, like as soon as we put the CJ So Cool stuff up, it was, you know, we had bids right away.


Dan: I have seen a lot of investment activity and interest in what essentially you’re doing, right? How could we find a way to bankroll the creators? How can we find a way to do it but do it in a way that we’re not binding them to a long-term deal, we’re not taking anything from the long term over them but they are still able to do what they wanna do and we’re able to be a bit more flexible? Because, I mean, it’s all some aspect of disintermediation but I feel like just with where technology is now, with where things are, a lot of these things are easier than ever. So, that was a really great story. I mean, yeah, that’s really impressive just to hear like what they were able to do. 


Ant: Yeah, I mean, you know, again, like you said, because of technology, the data is there now, you know? And we could easily create some kind of formula or like analysis of it and then — the pain point is always money. Anyone that’s signed a bad deal is because they’ve needed money, like you know what I mean? Like that’s the leverage that people have over you to give you a bad deal, you know? Everyone that signs a record deal or a publishing deal knows that it’s a shitty deal but they’re like, “All right, I’m getting an advance,” but even beyond the advance, it’s like, “Oh, I’m gonna get this marketing team behind me, this team — it’s the machine, everyone talks about the machine.”


Really, the machine is money because you can hire all these people yourself if you have the money to do it and, also, if you hire them yourself, they’re accountable to you. You can fire them if they’re not doing their job. Go to a major label, they don’t give a fuck about you because there’s a thousand other artists that — they’re accountable to their boss and they don’t wanna get fired from their job so it’s a different dynamic, you know? If you could retain ownership, get your own money to hire your own team, it’s gonna be a lot more successful for you. 


Dan: And I think for you, specifically, your experience running commission, running an independent label helped inform a lot of this. You worked with a lot of artists that are big-name artists now, that people know, whether it’s Tyga, Lil Dicky, or IDK, like being able to have them and see the rise that they’ve been able to make, especially a lot of them not conforming necessarily to the mainstream industry but still getting a lot of those same big time opportunities.


Ant: Yeah. And, I mean, that’s — it’s all informed me, like that’s exactly why — like I know this firsthand, you know what I mean? Because I was in — I was in the position of needing money and like I signed shitty deals to fucking just keep momentum going and doing all that stuff but then, you know, I saw, as a manager, you don’t have any control, you know what I mean, really, like you have control of your team and the artists but when it comes to the label, they’re not beholden to you or anyone. They’re beholden to Drake and plug in all the schedules that they have and it’s like, “You fit in somewhere, okay, cool, we’ll fit you in.” But, you know, I’ve seen more labels kill careers than build it, you know what I mean?


Like, honestly, most of the artists that I see that break, it’s really because they have good management and they’re, you know, maybe they’re really smart and they’re proactive themselves and you’re sort of succeeding in spite of the label and like once you get to a certain point, then it’s easy for the label to like pour the money on and the gas and now it’s rolling and everyone’s like, “Oh, pat yourselves on the back, we broke this artist,” but that first zero to 50 or zero to 20, zero to 30, like they don’t give a fuck. They’re not approving any video budgets, they don’t wanna hear about you want PR, they don’t wanna hear about radio, like you’re on your own.


And, you know, that was what frustrated me as a manager managing these artists and so, you know, with Lil Dicky, I started out managing him and he was doing something I thought that was so different that like even though there was label interest, I was like they’re never gonna understand this, like I’ve seen this movie before, they’re gonna put you in the studio telling you you don’t have a single, come back when you have a single, they’re gonna put you in with whatever fucking producers on the chart right now and then give you some cookie cutter shit that you’re not gonna wanna do and then it’s gonna suck and then they’re gonna fucking drop you when your momentum’s gone and now you’re done.


And so, with that, based on what I was doing with Tyga, you know, Tyga was signed to Ca$h Money, Universal, but we operated like we were independent the whole time, like we were putting out mixtapes on Empire, we had our own radio team, we had our own promo team, all this shit, and that was the one thing about Tyga was like, you know, he was willing to invest in his own career and he was always willing to put in the work so, you know, he was always recording music and he was paying for videos, he would put the money back into his own shit and that enabled us to kind of operate independently even though we were signed to a label and so we put up these mixtapes and Universal would send us cease and desists and we’d just ignore them and just fucking keep going, like — and it was just like a game, it was kinda like this is so fucking stupid because they always wanna put you in the plan, you know, and like, “Oh, let’s make a rollout plan,” it’s like six months, eight months and it’s like that’s not how all this shit moves anymore.


If you’re — certain artists, like, yeah, you could plan the next — like if you’re Beyoncé, you need your 12-month plan. Especially in hip-hop and just like this new generation of hip-hop, it’s very fast moving, you know what I mean? Like six months from now, the song that you recorded is like that shit is old, you know what I mean? So it’s kinda like you need to capitalize faster and be able to move a different way and it’s just having that experience as a manager, being frustrated with the way that the labels just hold all the power and you really can’t move unless you’re just willing to put money in yourself without making it back, and so with Dicky, you know, I was just like, listen, I already have the team, like, you know, I have my own radio team, I have my own video directors, my own promo, my own PR, everything, essentially a full label service staff that was all like third party and pieced together, and I was like, let me — like, “I’ll be the label, like let me go get a distribution deal, we’ll put it out independently and like I know how to break this shit,” and we did it and it worked and so, from there, I just shifted all my focus to being a label and, you know, signed MadeinTYO, IDK, you know, all the artists that came after that and it was always more of like my deals were always kinda structured to be more of like a partnership, you know what I mean?


It wasn’t ever like a royalty or anything like that, it was like net profit splits, like transparent, like very short deals and just kinda like, I don’t know, I always believed in — because I come from being an artist back in the day so it’s like I always wanted to be fair, like this is your life, like you know what I mean? Like I’m trying to help you but I could get another artist tomorrow, you can’t get another career so like I want it to be fair and I want you to be in it with me, you know, like you gotta have skin in the game and so, yeah, like that all informed me where you need to own your shit, even as my — being a label, I got a distribution deal and put all my own money into building it and all that stuff but then, you know, did some partnerships where I needed funding to scale but I never gave up equity and that ended up working out in the end when I went to sell my label, I owned the label so I could sell it, you know? If I would have been beholden to, you know, Universal or someone — there are so many, I might not have been able to move that much and so, you know, ownership has always been key and that was just the next step in the evolution of like Royalty Exchange is just advocating for like artists, like you are a business, like this is a business that you’re in, it’s the music business.


A lot of artists forget the business side of it and that’s cool if you wanna be an artist and just be an artist, but have a team that understands the business and like build the shit around you, you know what I mean? And you’re creating valuable IP that you should be able to make money off of and that’s like the whole mission behind the Royalty Exchange, you know, why I got involved where it’s like let’s empower these artists where they don’t have to sign these shitty deals because if we could get them the money they want, they could hire everyone they need and then own all their shit. 


Dan: Was it tough to sell the label and let that part go and do what you’re doing now, obviously? Because, I mean, there’s clearly a connection and an evolution with what you’re doing and the skills are so relatable, but you yourself were an artist, you’ve worked so closely with these artists as well and working directly with them, of course, is a very different type of thing than running a company and you clearly still have the skill sets and the ability. Was it tough at all?


Ant: From like an emotional standpoint?


Dan: Yeah.


Ant: Not really, like I was never that connected to like a brand in particular, like I always see, you know, because maybe that also comes from like management, it was never about me, it was more about like the artists and like I always kind of played the background and so, you know, even as a label, like you have the name of a label but it wasn’t — like I wasn’t like, “Oh, this brand is my baby,” like, yeah, like I felt like I love it, but I feel like I can start a label tomorrow and in a couple of years have it going crazy and sell it again, like you know what I mean? So it’s more about a belief in myself that I have the skill set to identify talent and break talent and all that, you know? So, under what moniker it is doesn’t really matter to me. 


Dan: That makes sense, yeah, and I think having that mentality is right. It’s like you’re obviously close to the industry, you see how things evolve, what you may have done a few years ago with Commission would be very different than if you would ever start one in the future, but I think so many of the principles are gonna stay the same, like understanding how the industry works from your perspective, like that stuff isn’t going to change. There may be small evolutions here or there, but the core of it, I think, is still pretty stable. 


Ant: Yeah. It’s not like a product, you know what I mean? It’s like if I created fucking Apple, yeah, like, all right, you’re not gonna make another Apple but, you know, essentially, it’s a service business and I know how to do the service so I could do it under whatever label it is, you know?


Dan: Yeah, that makes sense. That makes sense. Well, Ant, this is great. I mean, I feel like we’ve covered it all. We got a great breakdown on Royalty Exchange, talked a little bit about your career as well and everything leading up to this point too, but, before we let you go, anything else that you wanna make sure the Trapital audience knows about or anything else you wanna plug?


Ant: No, I’m not a plug guy, like I’m not — I feel like we got the info here, you know, go check out Royalty Exchange if you’re an artist or a manager that, you know, is looking to potentially get some money for whatever you wanna, you know, invest into your own career or put in your pocket, we’re here so check out Royalty Exchange and that’s it, man. I just appreciate you taking the time and, like I said, I’m a big fan of what you do and your mind and how you think about the business so this is an honor for me. 


Dan: Thanks, man. I appreciate that. I appreciate that. This is fun.

Dan Runcie

Dan Runcie

Founder of Trapital

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