FAQ

How JKBX Works

What is JKBX ["Jukebox"]?

JKBX (pronounced "Jukebox") unlocks shared value from things people love by offering consumers access to royalties as an asset class.

The short: JKBX is a platform where you can invest in Royalty Shares of hit songs.

The long: JKBX is a platform for investing in shares of the income generated from music royalties by purchasing Royalty Shares. If you’re a music superfan looking for a deeper connection with the music you love, now you can turn your playlist into a passive income stream.

How are songs chosen to be listed on the platform?

The JKBX platform doesn't buy or sell securities. Issuers buy music assets from rights holders and then offer those Royalty Shares that correspond to these music assets on the JKBX platform.

First, an issuer works with rights holders to identify assets (including some of the most popular songs and recordings in the world) and secure percentages of the associated royalties for purchase. Next, an offering circular describing the Royalty Shares and the music assets is submitted to the SEC for review and qualification. Once the offering circular is qualified by the SEC, the issuer offers the Royalty Shares for sale on the JKBX platform.

I am (or represent) a rights holder, songwriter, or artist interested in participating. What are the next steps?

Using & Navigating the Platform

Can I have a joint account?

No, JKBX only offers individual accounts. Each JKBX account is associated with only one person.

How can I reset my password?

Resetting your password is simple. Log in, navigate to your ‘Settings’ tab, and select ‘Request Reset Password Link.’ You’ll receive a one-time link in your email inbox which will lead you to instructions for creating a new password.

You can also do this at any time by selecting ‘Forgot password?’ on the ‘Sign In’ page.

How often will I receive royalty payments?

The simple answer is: When we receive royalties for a specific Royalty Share, we will pay those royalties to the eligible Royalty Share holder on a quarterly basis.

But since royalties can be a little hard to understand at first, here’s more detail to help you understand how royalty payments work.

Royalties come from a variety of providers, each of which has its own distribution schedule. The frequency of when investors will receive royalty payments will ultimately depend on the providers’ accounting schedules.

Our goal at JKBX is to make this complex process seamless, predictable, intuitive, and simple. So while there is typically no one-size-fits-all schedule for royalty payments, there will be for you. We will pay eligible Royalty Share holders all of the royalties received each quarter. There may be quarters where no royalties are received, and other quarters where a lot of royalties are received. That is the nature of the music business.

About Royalty Shares

What are music royalties?

For every piece of music, there are two copyrights: one for the composition and another for the recording of that composition. Music royalties are payments made to the creators and rights holders of music — the people who created or own the copyrights — for the authorized use of their work. These royalties and fees serve as compensation for the use of copyrighted music. They’re typically paid by entities such as streaming platforms, radio stations, television networks, film studios, and live performance venues.

Music royalties play a crucial role in supporting songwriters, artists, publishers, and labels by providing them with ongoing income for their creative works and resources to invest in creating new works. Investors can acquire music Royalty Shares, which entitle them to a portion of royalty income.

What kinds of income and royalties are generated by music?

There are several sources of income interests generated by the use of copyrighted music. They include:

Composition:

  1. Mechanical: These royalties are paid to songwriters, publishers, and administrators for the reproduction and distribution of their compositions. They are generated from physical and digital sales and streaming of the composition.
  2. Public Performance: These royalties are collected by performance rights organizations (PROs) and paid to songwriters, publishers, and administrators. They’re earned when a composition is performed publicly or broadcasted, including on radio, TV, live performances, and certain streaming platforms. 
  3. Synchronization: These fees are earned when a composition is synchronized with visual media, such as movies, TV shows, commercials, and video games. The rights holders receive payment for the use of their music in these visual productions.
  4. Other: This could include income generated by print, karaoke, or social media, or other income generated by a composition that doesn’t fit clearly into any of the above categories.
  5. Remix: Some compositions include rights associated with related remixed versions of such composition. The rights associated with remixes generally accrue royalties from the various income interest sources described above in this list.

Sound Recording:

  1. Sales: These royalties are generally paid to record labels from the sale of records in all formats (physical, downloads, and streams). 
  2. Neighboring Rights/Digital Performance: These are public performance royalties paid to the owner of the recording of the song performed and to the performers whose performance was recorded. They are generated by exploitations outside of the United States or when their recordings are played over digital and satellite radio in the US, such as Pandora, Sirius, and iHeartRadio when they collect similar “digital performance royalties.”
  3. Synchronization: These fees are earned when a sound recording is synchronized with visual media, such as movies, TV shows, commercials, and video games. The rights holders receive payment for the use of their music in these visual productions.
  4. Other: This includes income generated by social media and or other income generated by a recording that doesn’t fit clearly into any of the above categories.
  5. Remix: Some recordings include rights associated with related remixed versions of such recording. The rights associated with remixes generally accrue royalties from the various income interest sources described above in this list.
  6. Royalty Participants: These royalties generated by the various exploitations of the sound recording are paid to producers, artists, engineers, and other key stakeholders. These royalties accrue from the various income interest sources described above in this list.
What are Royalty Shares?

Royalty Shares are the securities offered by issuers on the JKBX platform. They represent a contractual right to receive a specified portion of royalties, fees, and other income streams contained in the income interests the issuer receives that relate to royalty rights for a specific music asset or a compilation of music assets.

For the sake of clarity, by purchasing Royalty Shares you will not receive any equity interest in JKBX, any of its affiliates, or any other party, additional rights or licenses, including but not limited to copyrights, trademarks, voting rights, or commercial/personal usage rights, or any physical products. The Royalty Shares offered on the JKBX platform are not the same as shares of any company’s stock.

Are these NFTs?

No, Royalty Shares are securities offered pursuant to the exemptions set forth in Regulation A. Royalty Shares are contractual rights to receive the income generated from the underlying music assets.

Regulatory Compliance

What is a Regulation A+ Offering?

Issuers will offer and sell the Royalty Shares pursuant to Regulation A under the Securities Act of 1933. Regulation A allows private companies to raise capital from the general public in the United States and not just from accredited investors. It is a provision under the Securities Act of 1933 Regulation A, which was expanded and enhanced by the JOBS Act in 2015. In some ways, it is like an initial public offering (IPO) — Regulation A allows companies to offer shares to the general public and not just accredited investors.

A Regulation A offering is sometimes called a "mini-IPO" because they resemble the process of an IPO, but with some differences. There are many financial, legal and regulatory compliance and disclosure requirements, all of which must be qualified by the SEC before any Royalty Shares can be issued.

For more information on Regulation A, please see https://www.sec.gov/education/smallbusiness/exemptofferings/rega.

What is an IPO?

An IPO, or Initial Public Offering, is a process through which a private company offers shares of its stock to the public for the first time. It’s a way for a company to raise capital and become publicly traded on a stock exchange. During an IPO, the company sells a portion of its ownership to investors in the form of shares, and these shares are then traded on the open market. This allows individuals and institutional investors to buy and sell shares of the company, providing the company with additional funds for growth and expansion.

For more information on an IPO please see https://www.sec.gov/education/capitalraising/goingpublic.

Although an IPO is the commonly used term for selling shares of stock to the public, the Royalty Shares offered on the JKBX platform are not the same as shares of public company stock. Issuers on the JKBX platform sell shares pursuant to an offering circular, which describe Royalty Shares in detail. Always refer to the offering circular for questions relating to specific Royalty Shares. The offering circular refers to the sale of Royalty Shares as an 'Initial Royalty Share Offering,' or IRSO, whenever an issuer offers Royalty Shares for the first time.

Know Before Investing

Is investing in Royalty Shares risky?

All investing involves risk and may not be appropriate for everyone. An investment in Royalty Shares involves a high degree of risk and should be made only if you are able to bear the risk of and withstand the total loss of your investment. Each listing has an offering circular and you should carefully consider and review all  information relating to any Royalty Shares, including the information under the heading “Risk Factors”, before agreeing to purchase any Royalty Shares.

There are many risks related to an investment in Royalty Shares and the royalties related thereto, which include but are not limited to, among other things, the music’s performance, the music business, and other technological, economic, regulatory, and geo-political factors. 

There is currently no trading market for Royalty Shares, and there can be no assurance that any trading market will develop or, even if developed, may not be available to all holders of Royalty Shares, may not be sustained or may cease to exist in the future, which would adversely impact the market for Royalty Shares and make it difficult, or even impossible, to sell your Royalty Shares. You should be prepared to hold Royalty Shares for an indefinite period of time, as there can be no assurance that Royalty Shares will ever be saleable in any trading market or otherwise.

Is JKBX available outside the United States?

We are open to international investors that meet their applicable securities regulations, however JKBX is currently optimized for US-based individuals. At this time we only offer English-language customer support in US time zones, and not all product functionality may be available internationally.

Additionally, it's important to note that regulatory and legal requirements may differ between countries, so international investors should ensure compliance with the applicable laws and regulations in their respective jurisdictions.

The Reservation Process

What does reserving shares mean?

Reserving Royalty Shares is an opportunity to be among the first investors contacted when the Royalty Shares become available for sale on the JKBX platform. You indicate how many Royalty Shares you're interested in buying, and we’ll let you know when they're officially available for purchase.

Reserving Royalty Shares is a non-binding indication of interest to purchase the amount of Royalty Shares you select at the price you indicate. No money is being solicited from you at this stage of a given offering and, if sent, will not be accepted. You cannot purchase Royalty Shares until, if, and when they become available on the platform. If you indicate an interest, JKBX will contact you to prepare your account for subsequent purchase, and inform you promptly if and when such Royalty Shares become available for sale. You will always be provided with a copy of the offering circular before you are able to purchase any Royalty Shares.

Note: Royalty Shares may become oversubscribed or may not be offered at all, and as such, you may not be allotted all, some or any of your entire reservation. Please also keep in mind that while anyone can reserve Royalty Shares, all purchases are subject to successfully completing an identity verification process and depositing funds into your JKBX account by properly connecting it to a financial institution. We take compliance seriously and all our customers will go through an industry-standard Know Your Customer (KYC) verification prior to being able to purchase Royalty Shares.

Is there a limit to how many reservations I can make?

In general, there are no limits to the amount of reservations you can make. Regulation A, however, limits the amount of Royalty Shares that an investor (who is not an “accredited investor”) can purchase to no more than 10% of the greater of annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). As such, you should not reserve (or indicate interest) in amounts greater than the Regulation A purchase limitations. Importantly, note that any “reservation” made is primarily used by the issuer to assess interest in the contemplated offering of Royalty Shares and does not require you to buy, or require us to sell to you, any specific amount of Royalty Shares.

How will I know when Royalty Shares are ready to be purchased?

Royalty Shares will be available for purchase only when they have been qualified by the SEC. Upon approval, you will receive an email notification.

Can I cancel my reservations?

Yes. A reservation is a non-binding indication of interest — you can cancel a reservation at any time and failure to cancel a reservation does not result in any obligation to purchase.

First, log in and navigate to your Reservations page. Find the specific reservation you want to cancel, then click the ‘X’ on the right hand side.