LONDON – Greek-Canadian music industry executive and entrepreneur Merck Mercuriadis, founder and CEO of Hipgnosis Songs Fund, was featured in the New York Times for his efforts that are changing the business of the industry.
Mercuriadis, 57, grew up in Nova Scotia, and “has become the industry’s most polarizing figure by storming the ramparts of the music publishing world — the lucrative if lesser-known side of the business that handles the licensing and royalties of songwriting catalogs,” the Times reported on December 18.
He told the Times in an interview from an office at Abbey Road Studios in London, “The traditional music publishing model is something that I want to destroy.”
Due to the pandemic, the music industry in 2020 faced the shut down of touring which brings in a great deal of revenue, but music publishing has been lucrative, especially in the selling of catalogs, “bundles of songwriting copyrights that, if popular and long-lasting enough, can collect steady, predictable streams of income,” the Times reported.
“Thanks to plentiful investment coffers, rosy projections about online streaming and, less happily, the need of many artists to raise cash during the pandemic, there has been a flurry of deals this year, often at staggering prices,” the Times reported, noting that “Stevie Nicks sold a majority share in her catalog for $80 million” and “Bob Dylan signed away his entire corpus of more than 600 copyrights for a sum estimated at $300 million to $400 million.”
“The company that has driven the most transactions, and done so the fastest, is Hipgnosis Songs Fund, which Mercuriadis introduced on the London Stock Exchange in July 2018,” the Times reported, adding that “in just two and a half years, Hipgnosis has spent about $1.7 billion scooping up the rights to more than 57,000 songs from an enviable list of writers.”
Hipgnosis “owns, in full or in part, 108 songs by the hip-hop producer Timbaland; 188 by Jack Antonoff, a collaborator of Taylor Swift; 197 by Debbie Harry and Chris Stein of Blondie; 814 by RZA of the Wu-Tang Clan; 315 by Mark Ronson; and 1,068 by Dave Stewart of Eurythmics,” the Times reported.
According to Mercuriadis, the over a century old business structure of music publishing “is fundamentally broken and needs to be rebuilt,” the Times reported.
“People look at songs as being inanimate objects; I don’t,” he told the Times, “I think that they’re the great energy that makes the world go ’round, and I think that they deserve to be managed with the same level of responsibility that human beings do.”
Mercuriadis’ plan for Hipgnosis “is inseparable from his critique of the music publishing establishment,” the Times reported.
He said that “the big publishers — which are all divisions of the major record conglomerates — own far too much material to exploit it all properly,” the Times reported, adding that “Sony/ATV, for example, has nearly five million songs in its portfolio,” including “two of the industry’s ultimate trophies: the Beatles and Motown songbooks.”
Mercuriadis told Music Week that the term “publisher is a euphemism for someone that collects your money but doesn’t really add value to the song.”
“In its place, he posits a bold but somewhat vague plan called ‘song management,’ in which leaner companies look after smaller collections of high-value hits, and each track is held to a profit-and-loss analysis to ensure its value is maximized,” the Times reported, noting that “Hipgnosis, he says, will eventually have no more than around 150,000 titles.”
The company is off to a strong start, the Times reported, adding Hipgnosis’ “latest financial results, published this month, reported that the ‘fair value’ of its catalog, as determined by an independent reviewer, rose 10 percent from April to September,” and “it recently acquired a slice of All I Want for Christmas Is You, Mariah Carey’s inescapable holiday standard, and the new season of Netflix’s hit show The Crown uses four songs from the Hipgnosis portfolio.”
Mercuriadis has also received “backlash from the establishment he has provoked,” the Times reported, noting that “they question whether Hipgnosis can ever earn back the sums it is paying, and whether ‘song management’ is any different from what other music publishers do every day.”
“We are now in a paradigm where 90 percent of artists that are being signed are reliant on songwriters to help deliver hits,” Mercuriadis told the Times, “and yet the songwriter is now the low man or woman on the totem pole when it comes to getting paid.”
“By building a portfolio of top songs, and gaining the endorsement of major writers — who may have given up their rights, but were paid handsomely for them — Mercuriadis believes he can gain leverage to ‘change where the songwriter sits in the economic equation,’” the Times reported, adding that “Mercuriadis also says that next year he and Hipgnosis will endow a ‘songwriters’ guild’ to lobby for changes to the industry’s status quo.”
“That may be difficult, however, since, in the United States, the publishing business is heavily regulated by federal statute and antitrust agreements,” the Times reported.
Meanwhile, investing in music royalties has become more “appealing to institutional investors like pension funds and university endowments, which tend to favor safe and steady growth,” the Times reported, noting that “Hipgnosis, which pays an annual dividend of about 7 cents per share, counts the Church of England among its major investors.”
The temptation for writers to sell has increased with the rising prices being paid for catalogs, but many artists debate whether or not to “sell out” and lose the rights to their songs.
David Crosby told the Times “that he is in active negotiations to sell his publishing rights,” adding that “I don’t have savings and I don’t have any retirement program. But I did have my publishing. It’s the only option that’s open to me to take care of myself and my family.”
Meanwhile, Mercuriadis “sees his deals as a recognition of the great value of songwriters’ work and a source of empowerment for them — their paydays, he said, have ‘de-risked’ their futures, making them less reliant on the industry’s status quo,” the Times reported.
“I wanted to be able to do something that would contribute to having the music industry recognize that the songwriter and the producer are really the star of the show,” Mercuriadis told the Times.