Image of Music Cow advertisement (Music Cow)

New investment outlets have come into light for younger generation especially some kpop fans or those who love Korean dramas and movies to make money by supporting the singers or actors they love. Through investing in the shares of the copyright of the songs by famous Kpop idols and dramas starring the TV stars, fans enjoy new ways to support them.

This new way of combining the Korean culture and investment comes as Kpop and drama fans seek new meaningful ways to show support for their unreachable stars.

For instance, Music Cow, a platform for investing in Kpop songs, gives an opportunity for fans to buy shares of owning a partial copyrights of the song.

There are two ways of investing in the song’s copyrights, according to the company. First is to participate in an auction in which fans offer their biddings to buy shares of the song‘s copyrights. Second way is to buy or sell the shares in the platform market.

In the auction process, Kpop fans who want to support their idols bid higher price to buy the stake of the song’s copyright. Total of 4,700 shares are sold to those who wrote the bidding price ranging from the highest to the 4,700th highest figure, the company said.

The auction price band of the Kpop idol songs is set from around 100,000 won ($85) and goes up as high as 300,000 won, according to the Music Cow official. People who wrote 100,000 won holds the same one share as the fans bidding higher prices.

But the fans write out expensive bidding price anyway to support their idols. If they bid higher price for the song, higher profit goes to the song writer. Idol singer songwriters can enjoy the financial support from their fans.

If the song is written by other song writters, the fans can indirectly “lobby” them. The fans can show their gratitude towards the song writers for giving nice songs to the idols.

“During the interview with the fans supporting kpop boy band NU’EST, they said by bidding higher price at the auction, they want to ask of the song writers to keep writing good songs for their idols,” Music Cow official said.

When the auction is over, shares of the song’s copyrights are bought and sold in the platform market.

Non-fan users enjoy profit by selling their shares at the price higher than their bidding price, however, the fans hardly give out their shares. Instead, they choose to keep the shares and make money by receiving the monthly copyright royalties, according to the official.

“On average, yearly profit rate is around 8 percent. Copyright royalties are protected until 70 years after the song writer passed away,” the official said.

International kpop fans can participate in the bidding process, but they cannot buy and sell their shares due to financial regulations in the country.

Image of Music Cow application (Music Cow)

“We are working with the financial authorities to be certified as the official finance service product that can allow international fans to buy or sell kpop songs in the platform market,” the official said.

Moving on from the kpop scene, Korean drama, movie or musical fans can also invest in owning some shares of the contents’ copyright through the platform, Funderful.

The fans, mostly retail investors, can chip in for the crowdfunding from 100,000 won to 5 million won. They are allowed to invest in total of 10 million per year, according to the company.

“We introduce dramas and other contents that are likely to bring huge success. Users can invest in the contents that has already attracted investment from agencies in the related fields. So there is not much chance to completely fail in the investment of copyrights,” Funderful official said.

The actor’s or actresses’ fans support their movie stars by giving out a large sum of money, according to the official. At the same time, the more money they invest to claim ownership of the copyright, the more profit they receive when the drama hits the jackpot.

In case of dramas, profit rate is set based on the viewing rates. Profit rate of movies and musicals are each calculated using indicators such as audience number and ticket sales.

“Recent crowdfunding project for the drama ‘Marriage and Divorce,’ was a big hit. The project attracted around 1.7 billion won and is expecting an after-tax profit rate at 20 percent. Investors will receive profit after 4 months from the date the drama went off air,” the official said.

The tax rate is set at 15.4 percent.

International fans can also participate in the funding by submitting their alien registration certificate for personal identification.

“On February, we were certified by the Finance Services Commission as a legitimate crowdfunding broker. Investors can get their money back under even if we go bankrupt,” the official said.

Experts say investment in kpop and Korean drama has been fueled by the fandom.

“It is the nature of kpop or drama fans to ‘own’ something from their idols. Buying fan merch is a way to go, however, holding a partial ownership of the copyright can show more sense of bond with their idols,” said Lee Eun-hee, consumer science professor at Inha University.

“To them, making money through copyright investment is their second priority. They just want to show support for their idols or TV stars. Also, investing a large sum of money exhibits the power of the fandom,” Lee added.

Screenshot image of Funderful blog (Funderful)

But concerns loom over the new copyright investments.

Since the investment itself is largely driven by the fandom, if the idols get into a scandal, investors might lose their money.

“After the ‘Seungri scandal,’ some of the Big Bang songs took a hit. The price of the copyright shares dropped because the disgruntled fans sold their shares,” Music Cow official said.

Seungri is a former member of Kpop boy band Big Bang. He is currently on trial for charges including prostitution mediation, embezzlement and overseas gambling.

By Byun Hye-jin (hyejin2@heraldcorp.com)