How it works
A song's journey to MasterExchange
The master behind every song
A song encompasses a master recording, master rights, and generates master royalties. Typically, artists, labels, or producers divide these royalties among themselves. Those who receive master royalties, such as streaming royalties, are considered 'master royalty beneficiaries.' These beneficiaries can apply to launch an Initial Music Offering (IMO) on the MasterExchange platform.
When a master royalty beneficiary is accepted by MasterExchange, they can divest a certain percentage of their master royalties and divide them into royalty shares. Legal agreements are established, outlining details such as quantity, price, and more. Transparent information about each investment opportunity is provided on the platform for users to review before placing their orders.
The Initial Music Offering (IMO) is an event where the master royalty beneficiary invites fans, music collectors and investors to purchase royalty shares of a song. The IMO is open for a set amount of days and it can be oversubscribed during this period.
After the IMO, royalty shares are allocated and the trading is opened. If the IMO is oversubscribed, shares will be allocated on a first-come, first-serve basis. Users with VIP status will alwaysguarenteed to get an allocation for the particular IMO.
Master royalties, primarily from streaming platforms like Spotify, Apple Music, and YouTube, are sent to MasterExchange. Our trusted financial custody partner safeguards all funds on the platform, ensuring secure transactions. Users owning royalty shares at the end of each quarter are entitled to receive proportional royalty payouts based on the number of shares they hold.
FAQ
What is MasterExchange?
MasterExchange is a platform where you can invest in and trade shares of music royalties and receive royalty payouts.
What is a Initial Music Offering (IMO)?
An IMO is an event in which the original royalty owner sells a predetermined portion of their master royalties to investors and collectors on MasterExchange. The subscription period lasts for 7 days, and no shares will be distributed to buyers until the period ends.
Who can invest in music at MasterExchange?
MasterExchange is open to residents of the European Economic Area (EEA), the UK and Switzerland who are 18 years old or above. These countries are included at launch: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Liechtenstein, Iceland, Norway, Switzerland, and the United Kingdom.
What is a royalty share?
A royalty share is the unique tradable asset on the MasterExchange platform, representing a stake in a song's future master royalties. Every royalty share is distinct, showcasing unique artwork, an ID number, and more. Collectively, the royalty shares of a song represent equal stakes in its future master royalties. While each royalty share is associated with an NFT on the Polygon network, the NFTs are held by an external crypto custodian, so you won't interact directly with the NFTs while using MasterExchange. Please note that the platform conducts transactions in euros rather than cryptocurrency.
What am I investing in, and how can I trade my assets?
When investing on MasterExchange, you're buying a portion of future master royalties in music rights through an Investment License Agreement (ILA) between you and the music rights owner listing their music on our platform. The ILA is divided into shares, each linked to a unique Purchase Agreement. This Purchase Agreement is represented by unique digital certificates called non-fungible tokens (NFTs) that provide secure and transparent ownership tracking. All these assets are stored with a licensed third-party custodian and can be exclusively bought, sold, or held on the MasterExchange platform, ensuring a compliant and seamless trading experience.
What are the benefits of investing in music royalty shares on MasterExchange?
There are three main benefits to investing in music royalty shares - you can earn passive income from royalties through quarterly payouts, you have the opportunity to diversity your investments by building a portfolio in a new asset class, and this is your chance to own a piece of your favorite songs by owning a share of the master royalties.
Are you guaranteed royalty shares after you’ve placed an order at an IMO?
No, since royalty shares are sold in limited quantities that are predetermined, in the case of high demand not all users who have requested to buy will be allocated royalty shares. First-come, first-serve is used when allocating royalty shares after the IMO is closed. However, users with VIP status will skip the queue and always be guaranteed royalty shares.
Does my VIP status apply to all IMOs?
No, VIP status are tied to each individual IMO, meaning a user’s VIP status only applies to that specific IMO.
Can I cancel my request to buy royalty shares?
Yes, you can cancel your request to buy royalty shares whilst the IMO is still open. When the IMO closes at the end of the 7th day of being live, you will no longer be able to cancel your request to buy.
Who can I contact if I need help or have any questions?
If you have any enquiries or need any support from the team, please email support@masterexchange.com.
What is VIP status at an IMO?
VIP status guarantees an allocation of royalty shares for an particular Initial Music Offering.
How do investors on MasterExchange receive royalties?
Songs generate royalties through platforms like Spotify, Apple Music, YouTube, and more. These platforms pay the master beneficiaries, who then distribute a portion of their earnings to investors on MasterExchange.
What payment methods can I use on MasterExchange?
MasterExchange accepts the majority of major cards. Please note, we do not currently accept American Express.
Do I need a Crypto wallet to invest on MasterExchange?
No, you do not need a Crypto wallet to invest on MasterExchange.