July 26, 2021

Why the Church of England Co-Owns Beyoncé or Rihanna Hits (and Other $ 1 Billion Valued Songs) | Music | Entertainment

What if there was a technology that would allow us to transfer the content of our minds directly to the brain of another person?

Did you know that the Church of England is a co-owner of the song Single Ladies of Beyoncé, the famous Umbrella Rihanna and success SexyBack by Justin Timberlake?

It sounds strange, but the institution is one of hundreds of investors in a company called Hipgnosis, which for the past three years has been acquiring the rights to thousands of hit songs one by one.

Up to now, has spent more than US $ 1 billion in music by Mark Ronson, Chic, Barry Manilow and Blondie.

His latest acquisition is the LA Reid song catalog, which means he’s featured on songs like Boyz II Men’s End Of The Road, Whitney Houston’s I’m Your Baby Tonight, and Bobby Brown’s Don’t Be Cruel.

When those songs play On the radio or featured in a movie or television show, Hipgnosis makes money.

And also its investors such as the Church of England and the fund managers Aviva, Investec and Axa.

‘More valuable than gold’

According to the founder of Hipgnosis, Merck Mercuriadis, the music you have bought is “more valuable than gold or oil”.

“These excellent and successful songs are very predictable and reliable sources of income“, Explain.

“If you take a song like Sweet Dreams of Eurythmics o Livin ‘On A Prayer Bon Jovi, you’re talking about three or four decades of secure income. “

Hipgnosis was launched on the London Stock Exchange in 2018 by Mercuriadis and Hipgnosis advisor Nile Rodgers de Chic.

He says hit songs are a stable investment because your income is not affected by changes in the economy.

“When people are happy they live with a soundtrack of songs,” he explains.

“But also in less good times, like the kinds of challenges that we have experienced over the last six months due to the pandemic, the songs comfort and help to escape “.

“So music is always consumed and it always generates income.”

In fact, with Spotify users increasing by a monthly average of 22% between March and July, streaming rights earnings have increased over the past month. covid-19 pandemic.

As a result, Hipgnosis stock prices have weathered the turmoil seen in other types of businesses.

A long career

Mercuriadis, from Quebec, Canada, started working in the music industry after calling Virgin Records’ Toronto office every day for months until she was hired in the marketing department.

There he worked with artists such as UB40, The Human League y XTC.

In 1986, he joined the Sanctuary Group, eventually becoming its CEO, where he led the careers of Elton John, Iron Maiden, Guns N ‘Roses, Destiny’s Child y Beyoncéas well as working on the relaunch of Morrissey’s career in 2004.

Kanye West recently called him one “of the more powerful and knowledgeable people of the music industry. “

Merck Mercuriadis worked with stars like Beyoncé.

Fired for telling the truth

“I have been fortunate to be able to work with all the people I have always wanted to work with,” says Mercuriadis.

He says the key to managing any successful artist is “fight hard for them” and “tell the truth”even when it’s uncomfortable.

“What most people don’t realize is that if you have one career as long as Elton’s, you will be the coolest artist in the world seven times. In the same way, you’ll be the least cool artist seven more times. “

“Real life means saying, ‘This is where we are now, this is where we want to be, and this is what we have to do to get there. So let’s roll up our sleeves, get our hands dirty and don’t get stuck.”

He admits that he was “fired for telling the truth” in the past, although he does not mention names.

“It happens all the time. Not everyone wants to tell the truth and there are even fewer people willing to listen to it.”

The idea of Hipgnosis emerged in 2009, when Spotify was launched in the UK.

“I could see that streaming was going to change the landscape and that it was going to make the music industry very successful again,” he says.

Hipgnosis has acquired the rights to the hits of Dave Stewart, Blondie and Barry Manilow, among others.

He points out that the traditional benchmark that measures industry success is the Platinum album, which in the United States represents one million sales.

Sounds impressive, he says, until you realize that a hit movie like Toy Story 4 sold 43 million tickets.

“What these figures reveal is that although the vast majority of the population loves music, very few put their hand in their pocket and take out a ten bill and pay “.

Streaming changed that, he says, because people who used to passively consume music were willing to pay a monthly subscription.

An estimated 88 million people are subscribed to streaming services in the United States, more than a quarter of the population.

Unlike most record labels, Hipgnosis not focused on finding the “next best seller”.

A third of the songs it owns are over 10 years old and 59% are between 3 and 10 years old.

Less than 10% are recent versions.

“The only thing all my songs have in common is that they are culturally important,” says Mercuriadis.

‘Every song is a mini brand’

The idea of ​​investing in an artist’s future earnings is not new.

David Bowie in 1973 at a concert in Los Angeles, California.

In 1997, David Bowie it was financed with assets, called “Bowie bonds”, which gave investors a stake in the rights to songs like Life On Mars and Heroes.

The downside was that it was essentially a loan.

If Bowie wasn’t making as much money as predicted, he would have had to give up the rights to his songs.

Mercuriadis says that their arrangements are “more sophisticated”.

Pays artists 15 years of rights in advance.

Given the tax break, many walk away with “about 25 years of money in one go,” he says.

In return, Hipgnosis owns the songs in perpetuity.

For artists, the attraction is not just money, but Hipgnosis acts as a “song management company” rather than just exploiting a hit to endorse new music (which is how most labels and publishers work).

“It’s about seeing each song as a mini-brand unto itself,” said Dave Stewart of Eurythmics after selling his catalog to the company last year.

“People all over the world who sing Sweet dreams are made of this They may not know who I am or who Eurythmics is, but they know the song. Focus [de Merck] It’s of buy these classic songs and keep them alive and build little worlds around it. “

“That’s fine with me because when I go out and play those songs, what I want is for people to know about them. He’s very proactive.”

Mercuriadis and Rodgers signed their deal with Dave Stewart of The Eurythmics last year.

For a company that has based its strategy on future earnings, Mercuriadis must be aware of the criticism of streaming companies for what they pay artists.

Do you support current campaigns #BrokenRecord Y #FixStreaming, who advocate for a fairer payment?

“Yes, streaming services have to pay composers more money,” he says.

Best pay

“Although I believe that the #BrokenRecord campaign is imperfect as it has focused its efforts against these services [cuando] the real villains are the major record companies they are keeping most of the money. “

“The way the economic model works is that Apple, Amazon y Spotify they keep 30% of the money and pay 70% to the rights holders. As it currently stands, of the 70 pence per dollar that corresponds to the author, 58.5 goes to the record company. The artist gets, at best, one-sixth of that, or 11.5 pence for the song. “

“We think it’s time for record companies to step up and recognize that there is a real imbalance between what you pay to record the music and what you pay for the song. “

In fact, the campaign has been equally critical by both streaming companies and record labels, but Mercuriadis says the industry should focus on first. increase global subscriber base of streaming services from 450 million to 2 billion by the end of this decade.

“Because if that comes true, composers’ earnings they will be very significant. “

Merck Mercuriadis directed artists like Elton John and Iron Maiden before launching his latest company.

By then, expect Hipgnosis to have a catalog of about 60,000 songs.

At that point, the company will exit the acquisitions business and they will focus on placing their successes in video games or television shows, get new artists and make sure they appear in featured playlists.

“These great songs are the energy that makes the world go round,” he says.

Is there a catalog of songs that you would love to get your hands on?

“All the world wants the beatles“, smile.

“It’s the best set of songs ever written.”

“I wouldn’t want to live in this world if the Beatles weren’t part of it.” (I)