Investing in Music Royalties: The Age Factor
Learn how songs are categorized by their age, and why those categories are important.
- “Frontline” refers to new releases, and “catalog” refers to older releases.
- Investors in music copyrights buy catalog music because its most volatile period has already passed.
- Today’s music fans stream music from all eras, giving older music the opportunity to compete with newer, highly promoted work.
- JKBX believes these factors make catalog music an interesting investment opportunity.
As an emerging asset class, Royalty Shares may be novel to investors. What factors are worth considering when investing in income generated by music?
One basic distinction — whether the music is considered “frontline” or “catalog” — is worth taking the time to understand.
What do we mean by ‘catalog’ and ‘frontline’ music?
‘Frontline’ means new
Frontline music refers to newly released songs or albums that are actively being promoted by rightsholders. These are the tracks that are on the "front line" of the music industry, being pushed to radio stations, streaming platforms, and other media outlets. The primary objective is to generate immediate interest, buzz, and sales. Frontline music may embrace high risk returns (or losses). This can be due to unpredictable trends, intense competition, short life span of hits, expenses, dependance on promotion, and a lot of other variables.
When frontline music matures, it becomes catalog
Catalog music, in general, refers to songs that are no longer actively promoted by labels but may continue to generate royalty income from streaming, sales, synchronization fees and other sources.
Catalog music has a track record. When investing in catalog music, you can analyze past revenue streams to evaluate a song’s performance over time. And there is less guesswork about popularity — these songs have already found their audience and have demonstrated their appeal.
Currently, the JKBX platform only features catalog music
The first issuers to list Royalty Shares on the JKBX platform have chosen to exclusively list assets based on catalog music. Everything that will be listed initially has clear, relevant performance data to evaluate.
Streaming has given older songs new life
With the omnipresence of streaming platforms like Spotify, Apple Music, and YouTube, music is consumed more than ever. Both new songs and timeless classics continue to engage listeners, emphasizing the enduring relevance of catalog music. And this shift has led to a new source of revenue — some songs that had shown steady performance over a long period are actually beginning to grow in popularity.
These new consumption trends have influenced the market for catalog music, with some investors purchasing artists’ and writers' whole music collections for 9-figure sums. These companies are making an informed decision based on historical performance and expected future performance — the longer these catalogs continue to make money, the more viable they may appear to be as a long-term investment.
By investing in the Royalty Shares listed on the JKBX platform, you too can invest in catalog music, without the prohibitive upfront cost.
Breaking it down:
- The universal appeal of music means that songs, regardless of when they were created, find an audience. This gives music catalogs with classic songs a potentially reliable and lasting value.
- Thanks to digital platforms, the world is more connected than ever. A song created in one corner of the globe can find a fan in another. This global reach enriches the potential of a music catalog.
- Beyond potential financial returns, owning Royalty Shares in a music catalog may be akin to holding a slice of history, a testament to human creativity and expression.
To sum it up: At JKBX, music catalogs represent an intersection of our love for timeless art and a principled approach to financial growth. We are excited about the endless potential of music, and if you are too, let’s explore this arena together.
Note: Always consult with financial professionals before making any investment decisions. Past performance is no guarantee of future performance or success.
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Explore ListingsBio: With JKBX, you can invest in something everyone knows and loves — music. Join JKBX today to stay up to date on the latest Royalty Shares opportunities.
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FAQ
JKBX (pronounced "Jukebox") unlocks shared value from things people love by offering consumers access to royalties as an asset class.
The short: JKBX is a platform where you can invest in Royalty Shares of hit songs.
The long: JKBX is a platform for investing in shares of the income generated from music royalties by purchasing Royalty Shares. If you’re a music superfan looking for a deeper connection with the music you love, now you can turn your playlist into a passive income stream.
For every piece of music, there are two copyrights: one for the composition and another for the recording of that composition. Music royalties are payments made to the creators and rights holders of music — the people who created or own the copyrights — for the authorized use of their work. These royalties and fees serve as compensation for the use of copyrighted music. They’re typically paid by entities such as streaming platforms, radio stations, television networks, film studios, and live performance venues.
Music royalties play a crucial role in supporting songwriters, artists, publishers, and labels by providing them with ongoing income for their creative works and resources to invest in creating new works. Investors can acquire music Royalty Shares, which entitle them to a portion of royalty income.
There are several sources of income interests generated by the use of copyrighted music. They include:
Composition:
- Mechanical: These royalties are paid to songwriters, publishers, and administrators for the reproduction and distribution of their compositions. They are generated from physical and digital sales and streaming of the composition.
- Public Performance: These royalties are collected by performance rights organizations (PROs) and paid to songwriters, publishers, and administrators. They’re earned when a composition is performed publicly or broadcasted, including on radio, TV, live performances, and certain streaming platforms.
- Synchronization: These fees are earned when a composition is synchronized with visual media, such as movies, TV shows, commercials, and video games. The rights holders receive payment for the use of their music in these visual productions.
- Other: This could include income generated by print, karaoke, or social media, or other income generated by a composition that doesn’t fit clearly into any of the above categories.
- Remix: Some compositions include rights associated with related remixed versions of such composition. The rights associated with remixes generally accrue royalties from the various income interest sources described above in this list.
Sound Recording:
- Sales: These royalties are generally paid to record labels from the sale of records in all formats (physical, downloads, and streams).
- Neighboring Rights/Digital Performance: These are public performance royalties paid to the owner of the recording of the song performed and to the performers whose performance was recorded. They are generated by exploitations outside of the United States or when their recordings are played over digital and satellite radio in the US, such as Pandora, Sirius, and iHeartRadio when they collect similar “digital performance royalties.”
- Synchronization: These fees are earned when a sound recording is synchronized with visual media, such as movies, TV shows, commercials, and video games. The rights holders receive payment for the use of their music in these visual productions.
- Other: This includes income generated by social media and or other income generated by a recording that doesn’t fit clearly into any of the above categories.
- Remix: Some recordings include rights associated with related remixed versions of such recording. The rights associated with remixes generally accrue royalties from the various income interest sources described above in this list.
- Royalty Participants: These royalties generated by the various exploitations of the sound recording are paid to producers, artists, engineers, and other key stakeholders. These royalties accrue from the various income interest sources described above in this list.
Royalty Shares are the securities offered by issuers on the JKBX platform. They represent a contractual right to receive a specified portion of royalties, fees, and other income streams contained in the income interests the issuer receives that relate to royalty rights for a specific music asset or a compilation of music assets.
For the sake of clarity, by purchasing Royalty Shares you will not receive any equity interest in JKBX, any of its affiliates, or any other party, additional rights or licenses, including but not limited to copyrights, trademarks, voting rights, or commercial/personal usage rights, or any physical products. The Royalty Shares offered on the JKBX platform are not the same as shares of any company’s stock.
We are open to international investors that meet their applicable securities regulations, however JKBX is currently optimized for US-based individuals. At this time we only offer English-language customer support in US time zones, and not all product functionality may be available internationally.
Additionally, it's important to note that regulatory and legal requirements may differ between countries, so international investors should ensure compliance with the applicable laws and regulations in their respective jurisdictions.