During this year’s South by Southwest (SXSW) 2023, which took place from March 10 to 19, Labelcoin, a fractionalized song rights marketplace, announced the launch of its latest app for Android and iOS devices. The app will allow artists and fans to earn regular dividends from streaming royalties. Labelcoin, which markets itself as the “Robinhood of music,” is a platform that focuses on the sale of digital streaming royalties and enabling fans to earn dividends from song royalties, which can also be resold at any time in the future.
Launched in June 2022, the platform leverages current song catalog sale valuation formulas with available data, including follower activity, tour history, and team composition to estimate the value of songs. When artists place their songs (“Notes”) on Labelcoin, they retain full control and legal rights over their music and career, with one unique advantage that no other music catalog site currently offers: they earn revenue each time their Notes are traded in the future.
The app also shows fans how many average listens a song would take to earn a specific set of annual percentage yield (APY) return. As song holders, fans are able to earn streaming royalties alongside the artist, which helps grow the revenue by sharing the songs with their friends and network.
Several different types of platforms, including but not limited to Justin Blau’s Royal, Audius, Emanate, Opus, Catalog, Sound.xyz, and Async, have been created due to the growing demand by artists for a new marketing model that can be utilized by music streaming platforms.
Labelcoin CEO and co-founder Mark Miller emphasized the company’s mission, saying, “That’s why Labelcoin is needed. We’re creating a pathway for artists to make a living now, not eight years down the road if they can just hang on.” Miller has worked tirelessly to support struggling artists and entertainment professionals, and his partnership with VC investor Chad Petterson has paid $150,000+ USD of housing and utility bills, supplied over 10,000 pounds of groceries and fresh produce, and provided over 100 live and online courses, along with mental, emotional, and spiritual support.
At the end of SXSW 2023, Labelcoin reported over 250 artists on its platform, with over 52 million followers and over 2.2 billion streams, including Megan Davies, Jonah Baker, Kirsten Collins, Ari Herstand, and more. These songs, according to Labelcoin, will be available for investment post-launch.
Labelcoin notes that every song in its catalog is a “registered security” with the Securities and Exchange Commission (SEC) through its partnership with the Dalmore Group. However, the real barrier to entry for any music streaming platform continues to be how these digital collectibles offerings will be classified by regulators. Given the Web3 landscape still has little to no clarity on what factor(s) attach to qualify a digital collectible as a “security,” we are still beholden to the pending litigation involving the SEC and Dapper Labs’ NBA Top Shot, as well as the SEC and Ripple.
Petterson says, “Labelcoin is a great place for artists and fans who may not be familiar with investing, Web3, or even trends in the music industry. We make it super easy for anyone to support these growing artists and invest in their success.” To accomplish this, Labelcoin has created a marketplace where investors can easily track individual song and overall portfolio profitability, as well as numerous other performance and financial metrics.