Hipgnosis Spent Whopping $1 Billion On Artists' Catalogues In Past Year

Hipgnosis, the London-listed investment and song management company, has spent 1$ billion (roughly €844 million) on acquiring artists' back catalogues in the past year.

The company spent the billion dollars on reliable hits, profiting from a pandemic-fuelled streaming uptick. “Whilst we would never have wished for a pandemic, it has not only demonstrated the predictable, reliable and uncorrelated nature of the income of proven songs, but also accelerated the change in consumer behaviour to consuming music by streaming," Mark Mercuriadis, Hipgnosis Songs Fund CEO, told Music Week.

Hipgnosis made headlines earlier this year when the company bought the catalogues of artists including Lindsey Buckingham, Blondie, as well as half of Neil Young's songs in a deal estimated to be worth $150 million (roughly €127 million).

“Revenues have been highly resistant during the course of this incredibly challenging year and are well placed for future growth with global streaming adoption beating all expectations – seeing the 30 million paid subscribers when we first started grow to 450 million paid subscribers today to what are forecast to be 2 billion paid subscribers by the end of the decade.

"This has turned music from being a discretionary or luxury purchase to very much being a utility as a result of convenience and access afforded by streaming," Mercuriadis added.

The song management company have an already impressive portfolio, including some of Shakira's biggest hits: 'Hips Don't Lie', 'She Wolf', and 'Whenever, Wherever', as well as Beyoncè's 'Single Ladies (Put A Ring On It'. Hipgnosis are focussing on reliable, classic hits for their income, with 60% of their total portfolio being songs released 10 or more years ago.

Mercuriadis explained the company's tactic: “So, with over £1bn invested, we only own 57,000 songs. But 10,000 of them are Top 10 songs, almost 3,000 of them are No.1 songs. So it’s a very small catalogue, relative to Universal, Warner or Sony. But the ratio of success within that catalogue is very high, there are very few songs that are not successes."