10K80 by August Prum September 26, 2017
The emergence of a new company may give fans a chance to actively invest in their favorite artists. Royalty Exchange is buying 15 percent of Eminem’s catalog with a look to start copping chunks of other artist’s catalogs.
“Royalty Exchange has formed a new company and signed a letter of intent to buy at least a 15 percent slice of an income stream of royalties derived from Eminem music, with plans to buy other musical assets and take the company public.”
So basically Royalty Exchange will buy a percentage of an artist’s royalties and then make them available for fans to buy. For more specifics on the business model, Billboard described exactly how Royalty Exchange is going to work,
“According to Joel Martin, who manages FBT Productions, and Royalty Flow CEO and Royalty Exchange president Jeff Schneider, the plan is to let Eminem fans and investors share in income from royalties for his music through dividends paid by the company, once it is listed on NASDAQ. For its initial offering, minimum investment is $2,250 for 150 shares, which works out to $15 a share.”
Seems like a relatively interesting and different way for fans to be a part of their favorite artist’s career. It’s kind of funny to think that music experts will be able to look at trends and anticipate who is about to be hot. Like copping Juicy J stock when suddenly “Slob On My Knob” went back to the top of the charts a couple weeks ago.
But the music industry itself isn’t sure exactly how to take this new development. Eminem’s label Interscope (shoutout Jimmy Iovine) put out a pretty cold statement about Royalty Exchange’s affiliation to Eminem,
“Eminem is not involved in any deals for the sale of recording royalties and has no connection to this company. The decision to offer the royalty stream for sale or otherwise was made independently by a third party who retains royalties for an early portion of his catalog and Eminem was not consulted.”
The music industry has been slow to react to new trends before, like streaming and digitization, but Interscope head Jimmy Iovine has not. Regardless, this statement from Interscope definitely shows that there’s a slight reluctance in the music industry to embrace the Royalty Exchange model.
But Matt Smith, CEO and chairman of Royalty Exchange said his company presents an exciting new opportunity. Smith said in a statement,
“Royalty Flow gives investors the opportunity to participate in assets that are uncorrelated with public markets, and directly benefit in the music industry’s growth. It also gives artists, producers, labels, songwriters, publishers and other rights holders a powerful new financing option with a level of transparency seldom found in the music industry.”
Smith has positioned Royalty Exchange as a new way to monetize music for fans, artists, and people in the business. It’s an interesting concept and it will take some time to see how this all takes shape.
But this could be a fun new way to make bread as a music junkie. I’m down to try and game the music stock market.