Musicow sells out 1st US music equity offering backed by Kelly Clarkson hit

Musicow Inc., a South Korean music copyright trading platform pioneer, has sold out its debut US music royalty-backed securities offering in less than two months, marking a breakthrough in the K-wave capital’s push to turn entertainment content into investable financial assets.

The inaugural offering, backed by the copyright of Kelly Clarkson’s 2011 hit Mr. Know It All, was fully subscribed by US investors as of Aug. 5, Musicow US said Wednesday.

The 382-share offering was priced at $20 apiece, raising $7,640.

Musicow’s US operation filed the securities with the US Securities and Exchange Commission (SEC) in March and got approval for its issuance under the SEC’s Regulation A+ framework in May. The share sale began the following month.  

The milestone makes Musicow the first Korean firm to bring music rights-based securities to the US financial market, a move viewed as a gateway to turning Korean cultural intellectual properties, including TV series, films and games, into global financial assets.

“The complete sell-out of our first US offering with a small group of investors demonstrates the strong appetite for our offering,” said a Musicow official.

The news also brightens the prospect of Musicow’s business abroad.

According to Omdia, the global music royalty market is projected to grow to $53.4 billion in 2028 from $43.9 billion in 2024.

Retail investors’ interest in music copyright trading is also growing steadily amid a surge in music streaming services.

COLLABORATION WITH JAY-Z’S ROC NATION

Earlier this year, the Korean startup joined hands with Roc Nation, the entertainment company founded by US entertainment tycoon Jay-Z, to offer securitized fractional music royalties in the US market.

Musicow is gearing up for a full-service US launch with Roc Nation by the end of the year.

"Our mission is not only to support and empower artists by providing the tools and services they need to build a better music ecosystem but also to give everyone access to the financial opportunities the music industry offers,” Roc Nation Vice Chairman Jay Brown said in January when the two companies announced their strategic partnership.

Musicow has been carrying out a beta test for its US service with a small group of users in the country.  

MUSIC COPYRIGHT TRADING PLATFORM PIONEER

Founded in 2016, Musicow introduced the world’s first fractional investment platform for music copyright trading.

Its service enables music rights owners to buy, sell and trade shares in music royalty revenue with public investors.

It pays a lump sum to the creators of music tracks for claims to request copyright fees. It then splits the claim rights into small fractions and puts them up for auction. Half the gains from the auction deals go to the artists.

Investors in the music claim rights earn profits from the music copyrights, similar to dividends paid to stock investors for shareholding. Individual investors can also trade ownership of copyright claims through the platform.

The Korean startup launched its US operation, Musicow US, in 2022, with backing from Hanwha Group, one of Korea’s largest conglomerates.

With the US recorded music market valued at $17.1 billion – the largest globally – the space for individual trading of music copyrights in the country has significant room for growth.

Jukebox (JKBX), a latecomer to the sector, has emerged as a leading US player.

Following its successful debut, Musicow plans to accelerate its US expansion to reclaim its early mover advantage.

Write to Jeong-Hoon An at Ajh6321@hankyung.com

Sookyung Seo edited this article.