Music royalty shares: Investment or fandom?

Abstract

This study examines how music royalty shares on Musicow, a Korean trading platform, are priced during an exogenous regulatory shock classifying these assets as securities. Using transaction data, we show that the shares linked to popular artists are associated with a valuation premium. However, these shares decrease more sharply following the shock, suggesting that economic fundamentals supersede fan-driven sentiment. Our findings highlight that, even in markets for cultural goods, investor behavior aligns closely with rational valuation in the context of external risk.