The music industry is thriving, with streaming revenue, vinyl sales, and CD sales all on the rise. With fans actively spending money on music, startups are now proposing the idea of fans investing in their favorite songs. Jkbx, a new music royalties marketplace, aims to offer fans the opportunity to buy “royalty shares” or fractionalized portions of royalties and fees associated with specific songs. Jkbx plans to open for trading later this year after receiving approval from the US Securities and Exchange Commission. By allowing fans to financially support their favorite artists, Jkbx hopes to gamify fandom and revitalize the music industry.
The inspiration for Jkbx came in part from the recent surge of high-value catalog deals between artists and private equity and music firms. Artists like Bruce Springsteen and Justin Bieber have sold their catalogs for hundreds of millions of dollars. Jkbx aims to tap into fans’ enthusiasm and allow them to share in the potential profits of owning a small part of the royalties from popular songs. By encouraging fans to invest in music like they do in fantasy football, Jkbx hopes to create a boom in the industry similar to how fantasy sports boosted the NFL.
However, for fans to participate, they need to understand the intricacies of what they’re buying and how royalties work. Each song typically has two types of copyright holdings: the musical work (lyrics and composition) and the recording of that work. On platforms like Jkbx, fans are buying a specific portion of a royalty stream, not the entire composition or recording. While Jkbx offers an exciting opportunity for fans to support their favorite artists and potentially earn modest returns, it requires careful consideration and understanding of the investment.