(Bloomberg) – Retail investors will soon have the ability to buy the music rights to their favorite artist or music catalog, thanks to a developing platform from market maker GTS Securities LLC.
The global trading company is partnering with JKBX, a royalty technology platform also known as Jukebox, to make music rights investing accessible to the masses, executives say. The system, which is expected to go live in late 2023, will allow fans to invest in music in a similar way to how they buy stocks.
“Music as an asset class has been around for as long as there’s copyright law, but it’s owned and controlled by a handful of companies,” said Scott Cohen, CEO of JKBX. , in an interview. “By unlocking this value and offering it to retail investors, we can create a level of stakeholder wealth that doesn’t cannibalize or replace what already exists, but builds on it.”
Music deals have taken off in recent years as big-name artists sell off their catalogs and record labels and investment companies gamble on long-term revenue from chart-topping songs. Justin Bieber struck a deal with Blackstone Inc.-backed Hipgnosis Song Management last month, and John Legend has sold his music catalog to KKR & Co. and BMG. Bob Dylan and Bruce Springsteen have also reached agreements.
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GTS and JKBX are in talks with US regulators for approval to register their platform with the Securities and Exchange Commission, Cohen said. JKBX has about $1.7 billion in “exclusively secure” music rights and plans to launch the platform by the end of the year with more than $4 billion in rights, he said. declared.
GTS and JKBX have also created a fund for songwriters and recording artists so that they can get continued income from the platform.
“If their rights are traded, we should find a way for them to make money as well,” said Ryan Sheftel, partner and global head of fixed income at GTS.
Companies will operate the system like today’s stock market, but instead of stocks, investors can buy a portion of music royalties. Investors will be able to access the platform through a website and an app, said Ari Rubenstein, co-founder and CEO of GTS.
Investors will essentially buy the rights and become licensees, taking a portion of the copyright revenue. Music royalties would be bundled into a new company, like an LLC, which is filed with the SEC and made available to investors for purchase, the executives said.
Through the registered entity, “the music listener will become the music investor,” Rubenstein said. “Now they can understand this as an investment instrument. And for the music industry, it will create more interest in artists and buzz for their music.
