Short on time? Here are the highlights:
- Today's young, risk-tolerant investors are more comfortable with alternative investment platforms than ever before.
- Like traditional equities, alternative assets often come in the form of shares, representing a piece of something extremely valuable.
- Unlike traditional equities, an "alternative asset" tends to be something that hasn't previously been divided into securities retail investors can purchase.
- These assets often boast low minimum investments, diversification opportunities, and low correlation to traditional markets — all of which may interest today's investors.
- The JKBX platform offers retail investors unique access to the income generated by music royalties, in the form of securities called Royalty Shares.
Do you like surprises? Here’s an interesting one:
Gen Z (born between 1996 and 2010) is the generation of investors furthest away from retirement age — but most optimistic about financial freedom. A survey conducted by Achieve indicates that more than half of Gen Z investors are very confident about being financially secure when they retire. This stems not from a confidence in long-term employment, but a growing movement to assert financial independence by taking matters into one’s own hands through savvy investments.
And with great confidence comes great ambition. These new investors (are you one of them?), fueled by guidance from social media influencers, tend to have a higher risk tolerance, and are more comfortable with alternative assets than ever before. And that trend spans demographics — according to one source, at least one in four Gen Z, Millennial, and Gen X investors owns cryptocurrency.
But “alternative” assets — an umbrella term that applies to nearly any investment opportunity outside of traditional securities like stocks and bonds — extends well beyond crypto. This article explores the opportunities and attributes commonly associated with a specific type of asset that’s driving the rise of new alternative investment platforms (including JKBX).
Alternative Investment Marketplaces for Fractional Ownership
Fractional ownership — an investment approach in which the cost of an asset is split between individual shareholders — has cropped up in a variety of assets, including, real estate, fine art, farmland, and music royalties to name a few.
The concept, if you’re unfamiliar, is pretty simple:
- Assets that are extremely valuable and generate significant income over time often require a hefty investment to purchase whole. We’re talking millions or even billions.
- Most investors — even the hungry, risk-tolerant ones — don’t have millions let alone billions to invest.
- By fractionalizing that valuable asset and selling shares of it (or shares of the income it generates) on an alternative investment platform, the owner of the asset can access some or all of its current and future value without having to sell the whole piece.
- And by buying those shares, retail investors can get in on a previously inaccessible asset class at a price that works for them.
If this sounds a lot like investing in traditional equities, that’s because it is. Companies (which are often extremely valuable) sell fractions of their equity in the form of stocks. A key distinction between alternative assets and traditional equities is that oftentimes, the alternative asset is something that hasn’t previously been divided into securities that retail investors can purchase — which could be appealing to someone seeking unique opportunities.
There are also a few functions common among alternative investment platforms that are worth considering.
Low minimum investments
Fractionalized assets don’t typically require a high initial investment. This allows investors — especially those just getting started — to diversify their portfolios with exposure to unique assets that were previously reserved for high net worth individuals, entities, or institutional investors.
Alternative investment platforms offering fractionalized assets enable investors to own part of something unique and potentially valuable. This gives individual investors new opportunities to spread investments and risk across different assets within their portfolio.
Low correlation with traditional markets
Alternative assets often have low correlation with traditional financial markets that drive the performance of stocks and bonds. As a result, these kinds of assets may act as a hedge against market volatility and economic downturns, helping to manage the overall risk of a portfolio.
JKBX is a unique alternative investment marketplace
The same attributes mentioned above are also applicable to JKBX. Our platform offers retail investors unique access to the income generated by music royalties, in the form of securities called Royalty Shares. They don’t require a large initial investment, and are based on music revenue — which has had exceptionally low correlation to other economic indicators (Source: Goldman Sachs, ‘Music in the Air Report,’ 2022).
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Bio: With JKBX, you can invest in something everyone knows and loves — music. Join JKBX today to stay up to date on the latest Royalty Shares opportunities.
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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.
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.
There are several sources of income interests generated by the use of copyrighted music. They include:
- 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.
- 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.
- 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.
- 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.
- 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.
- Sales: These royalties are generally paid to record labels from the sale of records in all formats (physical, downloads, and streams).
- 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.”
- 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.
- 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.
- 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.
- 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.
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.
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.