The music industry has rebounded after more than a decade of piracy and songs have become a serious asset class. But that may not help the upcoming artists of today, as the sector’s biggest investors are mainly interested in old records.
“Our disruptive song management is built around the streaming paradigm, focused on managing and promoting our great hit songs of the past which have high demand rather than focusing on promoting continuous new releases with no track record,” said Hipgnosis Songs Fund’s investment adviser, led by founder Merck Mercuriadis, in its annual report Thursday. “There will never be another ‘Good Times’ by Chic, ‘Sweet Dreams (Are Made of This)’ by Eurythmics, ‘Heart of Glass’ by Blondie.”
About half of the London-based investment fund’s portfolio is made up of songs more than a decade old, and the proportion has increased over the last two years, the report said. It pointed to the recent success of Kate Bush’s 1985 ‘Running Up That Hill’ thanks to its inclusion in Netflix Inc show Stranger Things, though the Hipgnosis summary also called out Ed Sheeran’s 2017 hit ‘Shape of You’.
Bytedance Ltd’s TikTok has become an increasingly important source of revenues for the company, the report said, often reviving interest in classic songs. A video on the short-form social media platform re-popularised Fleetwood Mac hit ‘Dreams’ in late 2020 - Hipgnosis owns publishing rights from singer Christine McVie and guitarist Lindsey Buckingham.
The report added that Neil Young’s decision to remove his music from Spotify in protest over its promotion of podcaster Joe Rogan “led to an immediate jump in consumption of Neil’s music” among new and established fans.
Hipgnosis said its investments’ operative net asset value increased to US$2.24 billion, up from $1.81 billion a year ago. It also said it’s reviewing its debt structure to cut interest rate risk after borrowing costs rose since the end of the fiscal year. Shares rose 4.1% at 9.03am in London.
