Yolanda LamandGrace Zheng

Opinion | As culture and finance intersect, a chance to invest in music royalties and support Cantopop

Platforms like Musicow in South Korea are tapping K-pop fans by financing original works and creating a new platform

Hong Kong’s finance and creative industries can learn from this and collaborate to engage audiences, encourage creators and diversify investments

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Why you can trust SCMP

Keung To, a member of Hong Kong Cantopop boy band Mirror, performs during a concert in the city on July 25, 2022. Photo: Reuters

Yolanda LamandGrace Zheng

Published: 8:15am, 29 Jul 2023

At a shopping centre or in the comfort of home, music accompanies us everywhere. But have you ever imagined being able to earn royalties on your favourite songs?

The phrase “copyright trading” has become increasingly popular, even appearing for the first time in Hong Kong Chief Executive John Lee Ka-chiu’s policy address last year, after China’s 14th five-year plan envisioned Hong Kong becoming a centre for regional intellectual property trading and international cultural exchange.

While we traditionally associate copyright trading with buying the rights to an illustration or literary work through licensing and assignment, it can take a variety of forms. A platform has recently emerged in South Korea that lets retail investors buy the rights to song royalties.

Musicow works by paying artists a sum upfront for rights to their song royalties, before splitting the rights into smaller shares and putting them up for auction. Based on streaming activities, investors receive royalties each month and can also trade their shares through the platform. So far, the company has accumulated more than 200 billion won (US$157 million) in investments, with transactions worth twice that.

Music as an asset class is not a new concept. As the music industry has moved from a transaction-based to a subscription-based model in recent years, music content is more accessible than ever. Musicow has jumped onto this trend by bringing investment in songs – something previously reserved for large corporations – to retail investors. As the streaming model has matured, music royalties have become more predictable, making it attractive to investors looking to diversify.

Fractional investment platforms like these are particularly welcomed by young investors. The barriers to entry are low – some rights are available for less than HK$100, or US$13 – and it is a new way to engage with and own a small stake in the cultural works they enjoy.