New venture will allow investors to buy fractional shares in iconic artists’ song rights.
Courtesy Photo
Former Warner Music Group executive and the Orchard co-founder Scott Cohen said on Tuesday (Nov. 1) he is taking a new job as chief executive officer of a fintech platform aimed at selling fractional shares in song catalogs.
Cohen, who stepped down from his role as chief innovation officer at WMG in September, said the aim of the new venture is to “fractionalize ownership of music royalties.”
Fractional shares are a familiar concept in finance, and brokerages like Robinhood and Fidelity Investments sell them as a way to buy a slice of a share for less than the price of the whole stock. The market for buying and investing in music publishing rights has traditionally been open to only the world’s largest music companies and, more recently, money managers.
Introducing fractional shares could change that by making it possible for more smaller investors to participate alongside the deep-pocketed private equity funds and major labels.
In an email to Billboard, Cohen said has already secured rights from major artists and catalogs, and his team is now working to build the platform’s technology.
“We have a very aggressive timeline,” said Cohen, declining to provide a specific date when the venture would launch to outside investors.
Prior to joining WMG in 2019, Cohen founded the Orchard with Richard Gottehrer in 1997 and built it into the largest independent distributor on iTunes when the download platform launched in 2003. Cohen and Gottehrer sold the Orchard to Dimensional Associates, the private equity arm of JDS Capital Management, the same year, and subsequently expanded into video, music licensing, marketing & analytics, royalty collections, sports media, neighboring rights and more.
In 2015, Sony Music Entertainment bought out Dimensional Associates for $200 million, and in 2017 merged it with RED into a single global distribution entity operating under the Orchard brand.
While Cohen’s new venture has not yet settled on a name, he described its aspirations and potential as “transformational” for the music industry.
“I am only interested in doing things at scale,” Cohen wrote.
