Many might not know this but publishing and copyrights are some of the most confusing parts of the music industry. However, a music copyright trading platform in Korea called Musicow makes it easier than ever to trade small factions of music copyrights in Korea. Musicow does this by purchasing claims to a portion of music copyright fees from copyright owners. Then they sell these fractions to individual investors. Every time the song gets played, the investor will receive copyright royalties. The investors can even sell their fractions to others.
Music Copyrights in Korea
In the music industry, there are generally two types of music copyrights. One is for the composition and the other is for the master. The composition deals with the musical aspect of a song such as a melody or harmony. This does not have to include lyrics. Therefore think of the composition as a physical sheet of music notes with lyrics. The master on the other hand is the actual recorded song you might hear on iTunes or Spotify. Therefore, there are two different types of copyrights that come with every single song.
In the case of most Kpop songs, the masters are always owned by the Entertainment companies. The composition can go either way as it can include dozens of collaborators. The Copyright Act in Korea protects copyright works with no formal requirements such as registration. It lasts for the duration of the life of the creator and for a period of 30 years after their death. However, although copyright registration is not mandatory to effectuate the copyright in Korea, registration is required in order to claim statutory damages in a copyright infringement action.
The Korea Copyright Commission (KCC) serves as the non-judiciary dispute resolution body and the Korea Copyright Protection Agency administers the enforcement of copyright which includes the examination of infringement.
How Musicow works
Musicow pays a lump sum to the original creator of a song for its claims to part of the copyright fees. Then the startups divide the claims into small fractions similar to stock shares so fans can become investors. These fractions are put up for auction through the Musicow platform. Anyone can make bids on the fraction shares. Once they have the shares, they will receive copyright royalties each month based on how often their song was played. In addition, they can sell their fractions to other investors through the platform. On average, Musicow has 5-7 songs up for auction per week. Currently, the platform trades copyrights of over 10,000 songs.
The number of users on Musicow has grown from 10,000 users in 2018 to close to 1 million in 2022. The platform has been able to attract Korea’s younger generation by offering small investment opportunities in music copyrights. Their 2021 sales reached $40 million. In 2022, Musicow got a $168 million investment from Korea’s private equity firm STIC Investments. The investment will be used for new copyright purchases and global business expansion. This investment puts Musicow’s valuation at over $660 million and was recognized by the Ministry of SMEs and Startups as a pre-unicorn startup. They are now considered one of the fastest-growing startups in Korea. It is estimated that Musicow will become a Korean startup Unicorn in 2022 and go public in 2023.
Expanding into the U.S. Market
Musicow set up a joint venture in the United States with Hanwha Group in 2022. They will collaborate with each other in order to launch their arts copyright trading business.
