Hipgnosis Songs Fund revenues doubled between 2019 and 2020

By Emmanuel Legrand

Hipgnosis Songs Fund, the investment company set up by Merck Mercuriadis, has disclosed in its Annual Report 2021 that in the fiscal year ending March 30, the London-listed company had revenues of $160 million, against $82m in the previous year. Profit for the year after tax reached $38.9m against $32m a year before.

  During the past fiscal year, Hipgnosis acquired 84 catalogues for a total amount of $1.089bn. Overall, since its IPO, Hipgnosis has spent about $1.94 billion on 138 Catalogues comprising 64,098 songs.

  Catalogues acquired during the fiscal year include those from Neil Young, Lindsey Buckingham/Fleetwood Mac, Steve Winwood, Debbie Harry & Chris Stein/Blondie, and Chrissie Hynde/The Pretenders as well as Barry Manilow, Carole Bayer Sager, Shakira, Rick James, Enrique Iglesias, B-52’s, Jimmy Iovine, The RZA/Wu Tang Clan, Chris Cornell/Soundgarden, 50 Cent, George Benson, Nikki Sixx/Mötley Crüe, Rodney Jerkins, Kevin Godley & Eric Stewart/10cc, Skrillex, Walter Afanasie, among others.

Acceleration of streaming consumption

  "These are Catalogues that I believe are going to signicantly appreciate in consumption, revenue and value for a long time to come, not only from the growth in streaming and the narrowing of the discount rate as a result of the certainty of earnings that it affords, but also from our Song Management and the effciencies we bring to collections," wrote Mercuriadis.

  Hipgnosis said the good financial results were due in part to the acceleration of music streaming consumption during the pandemic, as streaming income rose 18.4% in the second half of its financial year, compared with the first six months. 

  "We consider that this acceleration of changing consumer behaviour will lead to higher streaming earnings in future years than previously expected," wrote Mercuriadis.

Growth in sync income

  “Going forward this accelerated streaming will be enhanced as revenues from TikTok, Peloton, Triller, Roblox and other rapidly emerging digital platforms start to be paid through. We are entering an era where now, for the first time ever, almost all consumption of music is paid for,” added Mercuriadis, who also highlighted a growth in synchronisation income despite advertising budget cuts and the the freezing of many AV productions.

  Hipgnosis Songs Fund, which is valued at $2.2bn, said that 60% of its catalogue's songs are older than 10 years accounting for 60% of its total portfolio, against 10% two years ago, and a very small proportion are less than three year-old.

  In terms of breakdown by genre, Hipgnosis’s catalogue is mainly geared towards pop music (46%), followed by rock (27%).