The modern music business is about to get a neat twist – as royalties go up for grabs on the stock market.
US-based Royalty Flow Inc has announced plans to offer its shares to the public.
In doing so, it will allow individuals to invest directly in music royalties.
In big news, those royalties will include those derived from Eminem’s recorded music catalogue from 1999-2013.
Royalty Flow is working with the superstar rapper’s long-time production team, Jeff and Mark Bass – aka FBT Productions – as well as their manager, Joel Martin.
The FBT team are making up to 25% of their master sound recording royalties in the Eminem recording catalog available to investors through Royalty Flow.
Investors can buy shares of Royalty Flow – and with it share in the previously privately owned royalty catalogue it manages – through an equity offering the company filed for today.
Royalty Flow targets raising between $11 and $25 million.
The shares will be offered to individuals and institutional investors under Title IV of the US’s 2012 JumpStart Our Business Start-up (JOBS) Act, known as “Regulation A+”.
“We believe Royalty Exchange is the new model for music financing.”
Royalty Flow’s Regulation A+ offering will begin after the SEC qualifies the filing, expected sometime in October.
Minimum buy-in is expected to be $2,250 for 150 shares ($15 per share).
Following this “mini IPO,” Royalty Flow intends to list on a public stock exchange, where anyone can buy and trade shares and be eligible to collect dividends from the Eminem royalties, as well as other assets.
Royalty Flow is owned by established online music copyright marketplace Royalty Exchange.
“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,” said Matthew Smith, CEO Royalty Exchange and Royalty Flow’s Chairman.
“It also gives thousands of artists, producers, labels, songwriters, publishers, and other rightsholders who contribute to the success of the superstars they work with access to on-demand financing options with the kind of flexibility seldom found in the music industry.”
The Bass brothers and FBT own producer credits and additional royalties on all Eminem recordings and releases from 1999 – 2013.
This includes all Eminem albums released in that timeframe (such as the diamond-certified The Marshall Mathers LP and The Eminem Show) as well as other Eminem projects, contributions, and recordings.
FBT Productions is well known fighting for higher online royalty payments.
In 2009, it sued Universal Music Group for what it alleged were unfair revenue splits on download and streaming sites.
“We believe Royalty Exchange is the new model for music financing,” said their manager, Joel Martin.
“We’ve supported increased transparency for artists our entire career, and Royalty Exchange is no different. They give investors simple, direct access to royalty opportunities that previously were available only to industry insiders. This changes everything.”Music Business Worldwide