In a move that echoes the ‘Bowie Bonds’ of the 1990s, early producers of rap artist Eminem are now looking to sell shares in a substantial collection of early Eminem tracks, spanning from Slim Shady LP through to the Marshall Mathers LP 2. This is down to changes in the JumpStart Our Business Start-up (JOBS) Act which allows crowdfunded initial public offerings (IPOs), so that ordinary citizens can now invest in small companies.
This opportunity for investors is based upon the fact that the music industry has started a transitional period that has its beginnings in the increasing popularity of music streaming services over the past few years. Many have questioned how and if artists receive royalties from these services, although the company wishing to acquisition Eminem’s royalties claim that 46% of these royalties were from streaming, and that the artist’s royalties grew 43% from 2015 to 2016. Sounds like a potentially lucrative investment, if you know what you’re doing.
Looking further into music streaming services, the market leader Spotify is reported to now be worth around $13bn and aims to go public towards the end of 2017, or early 2018. It will be the first company to go public without investment banks underwriting the process. If it is successful, this could be another change to how ordinary investors can purchase shares of a publicly listed company. This has been noted as a potentially risky move for the streaming service provider, as under normal circumstances the investment banks set an IPO that fits demand but leaves room for price growth, and without this the stock price may not be stable. Another concern of Spotify’s direct listing is that investors will be able to sell their shares as and when they like, which can cause heavy stock turnover and share price fluctuations. For uninitiated investors, the world of stocks and trading is alien, and so why would you risk your capital on a potentially risky venture? There are other ways you can invest. RJO Futures, for example, can provide insightful recommendations for trading futures and can provide access to the global markets which is more reliable than going it alone.
Matt Smith, CEO of Royalty Exchange, the company spearheading the Eminem catalog acquisition, believes that within the ‘booming’ music industry: “there aren’t very many ways that they [ordinary investors] can participate directly in this. That’s why we’re doing this. To give people direct exposure.” Royalty Flow, the arm of Royalty Exchange handling the purchasing of music rights, is referring to itself as an emerging growth company, and aims to generate returns of between 8% and 16%. It seems as if it won’t be long before you can own the rights to the tracks of your favorite artists and even make money from them! With only David Bowie and Eminem being the notable artists in this method of trading though, there’s no guarantee whatsoever that this is the landscape for the future. So far it remains an exciting potentiality. Therefore, before it is proven to be either a success or failure, don’t lose yourself in a $2,250 investment!