The music industry is experiencing a surge in revenue from streaming, vinyl, and CD sales. Startups are now capitalizing on this trend by proposing a unique idea: allowing fans to invest in their favorite songs. Jkbx, a new music royalties marketplace, plans to offer “royalty shares” to fans, providing fractionalized portions of song royalties and fees. Fans can purchase these shares at affordable prices, such as $28.61 for one share of composition royalties for Beyoncé’s “Halo.” Jkbx aims to gamify fandom and create an industry-wide boom, similar to the impact of fantasy football on the National Football League.
The inspiration for Jkbx comes from the recent surge in high-value catalog deals between artists and private equity and music world firms. Artists like Bruce Springsteen, Justin Bieber, Dr. Dre, and Katy Perry have sold their catalogs for millions of dollars. Investors are attracted to music assets because they believe there is untapped potential in these songs, including remixes, licensing deals, and viral moments on platforms like TikTok. Jkbx believes that if institutions see value in royalties, fans will also be interested.
However, investing in music royalties requires a deep understanding of what fans are buying and how royalties work. Each song has two main copyright holdings: the musical work (lyrics and composition) and the recording of that work. Buyers on Jkbx will acquire specific slices of royalty streams, rather than the entire rights to a song. It is crucial for fans to educate themselves about the intricacies of these investments before diving in. Overall, Jkbx offers an innovative opportunity for music lovers to financially engage with their favorite artists and potentially benefit from their success.