A Man Who’s Spending $1B to Own Every Pop Song

https://marker.medium.com/the-man-whos-spending-1-billion-to-own-every-pop-song-75df0024155b

by SirLJ • 7 years ago

350 230 7 years ago

marker.medium.com

trunc• 7 years ago

Ha! Their homepage (www.hipgnosissongs.com) is full of Youtube embeds of songs they own.

michaeljohansen• 7 years ago

This is not the Bond villain we want.

walshemj6• 7 years ago

Vevo actualy

makapuf• 7 years ago

The issue there is that new songs ans creativity destroys value of old songs and so this way of treating copyright plus no entries to public domain means that old songs will be pushed forward all the time whereas new songs have no incentive at all to emerge. Especially if distribution is consolidated between a few actors.

HenryBemis2• 7 years ago

Oh how I totally disagree with you... I thought I'd never move on to listen to "what kids listen to these days" and "most of it is crap". And then a cousin (with similar music taste) pointed me to "Post Rock" genre.. Mogwai (yes from the movie), Bloc Party, Sigur Ros, God is an Astronaut, 65daysofstatic..

I now split my time between good old classic heavy metal (Iron Maiden - Iron Maiden)(anything after 7nth son is junk imho), Metallica (up to Justice..), everything Sepultura, basically eveything rock/metal up-to-early-1990.

I get it that for new musicians it's hard to find their place in the world/market, but go start your own cafe/bakery/what-have-you and face competition.

Porter's five forces to the max!

corrys3• 7 years ago

Strange to see Block Party in this list! Also post rock had its time in the late 90s / early 00s. Doubt we can put it in the category “what kids listen to these days”. This category today is more along the lines of Post Malone and Lil Yachty.

prpl• 7 years ago

You might try out Mono, Boris, Pelican, Mastodon, Drive Like Jehu, Hot Snakes.

Maybe Pissed Jeans and Envy, but that might be a bit too punk rock.

chx2• 7 years ago

anything after 7nth son is junk imho

those are fighting words, my friend. Fear of the Dark and Paschendale are just two examples that came after Seventh Son and are rightly played often by the band at their concerts and immensely popular.

ModernMech• 7 years ago

You might want to try the band "This Will Destroy You". I bet it's right up your alley.

stdclass• 7 years ago

If you dig sigur ros and god is an astronaut, check out my post rock band MOLLY, we kind of go in the same direction :)

/shameless selfplug

52-6F-623• 7 years ago

Haha I’m going to join the others who seemed to get excited at your comment.

This is a short, two-part doc about a small music venue I was fortunate enough to spend my late teens and early twenties frequenting. It was the closest thing to my small town that brought me a lot of music from the generation you’re listing. Searching YouTube will unearth performances from the place. I’m in one of the group photos they put up somewhere in this. I miss the place.

Some of Tim and Scott's stories are entertaining and worth the listen.

https://m.youtube.com/watch?v=ngBr-WiQ5ek

corrys3• 7 years ago

New songs do have an incentive to emerge - it’s just human creativity. In the last 2 decades distribution has been massively democratized, the opposite of what your fear is. Anyone can distribute their music online to billions of people for free (YouTube, SoundCloud, etc).

lotsofpulp• 7 years ago

Not a bad idea. Finding avenues to rent-seek seems to be the winning strategy, especially with all the cash floating around looking for returns.

sjg007• 7 years ago

Michael Jackson owned the Beatles catalog which made him a lot of money.

fakinghistory• 7 years ago

Thats what he meant by the phrase "just Beat it"

shi3142• 7 years ago

And Sony made him gave that with pennies.

walshemj6• 7 years ago

Which the Beatles lost due to some super scummy tax dodge

TomMckenny2• 7 years ago

Seems that's the way society ended up being structured. Perhaps we will all end up selling houses to each other and no one will have to make anything at all!

I swear, even the Aztecs had a less destructive system.

neilwilson2• 7 years ago

We need about 1% of people to grow the food and perhaps 9% of the people to make stuff we need.

The other 90% then have to convince the 10% that do the actual work that they are worth the time to produce a surplus for. IP barriers are one way of doing that. Even farmers like pop songs.

umvi2• 7 years ago

It's like the old aristocracy days except for instead of the elite owning physical property and renting it out to the peasants, the elite own intellectual property and rent it out to the peasants.

tomrod• 7 years ago

Feudalism is one of the standard memes of history, as per David Brin.[1] The essay is well worth reading, as well as the thesis that a new meme ("otherness") arose within Western Liberalism. In my mind Otherness is a saddle point, and worth investing in to protect.[2]

[1] http://www.davidbrin.com/nonfiction/dogmaofotherness.html

[2] https://en.wikipedia.org/wiki/Paradox_of_tolerance

netcan4• 7 years ago

In a basic sense, that's what all wealth is. Income generating property. Debt produces interest. Company shares produce dividends Real estate earns rent. Capital produces revenue. It's all quite interchangeable.

The most famous rant on this is Marx & Engel's manifesto. Chapter one explains how history works, making similar comparisons from their day to older days. The second chapter describes communism's aims. It's also (largely) a rant about the bourgeois.

Anyway, like most Marx, it's hard to translate to concrete terms. One unambiguous line stands out though. "..the theory of the Communists may be summed up in the single sentence: Abolition of private property." - Communist Manifesto

In the very next paragraph, ambiguity re-enters. Even in theory, it's very hard to flesh this out. ...It's especially hard in the context he's most interested in: urban industry/society. Replacing all property with a "commons" is easier to imagine in a rural/village context. Rural commons exist.

I think Marx got the idea from a rural context. Formal and informal privatisations of agricultural commons were part of his stated inspiration, iirc.

Anyway, I think the basics are trivial. Property is effectively income generating by definition. If aristocracy is immoral, then property owning is immoral.

To me, this is a reductio ad absurdum for fundamentalist thinking... kind of like the monty python witch trial.

jacobwilliamroy• 7 years ago

I just wish they'd go rob a liquor store, like normal hardworking people do.

NOGDP• 7 years ago

I think pop songs are a depreciating asset since new ones can be pumped out rather quickly like out of a factory.

jedberg• 7 years ago

And yet when you see a car commercial they use an old song.

You’re not accounting for the value of nostalgia and cultural significance.

loso3• 7 years ago

When you hit 40 you start to see in real time how valuable those old songs are. Your friends and other people in your age group hate the new music so they only listen to music from when they were young. All of the commercials play music you thought would never be used in a commercial. Walking through the grocery store or waiting in an elevator you start to bop your head because one of your favorite songs from high school is now elevator music. A popular song has a lot of long tail value, sometimes you have to wait a generation to start to see the returns.

dehrmann• 7 years ago

It's not just than new ones are pumped out, it's that people lose interest and move on. Taylor Swift will do better than someone less popular, but people still listen to "Blank Space" more than "Love Story." Going back further, kids these days are less likely to know the Beatles.

stanferder• 7 years ago

It's actually kind of brilliant. Mercuriadis et al are getting some of the rights to well-known intellectual property through the presumably underpaid, behind-the-scenes contributors. His competitors say he's paying too much, but is that just because they've been paying too little?

I was biased against the guy when I started the article, but if the status quo ante was other execs paying pennies to songwriters for their rights, and then doing little to nothing with them, maybe Mercuriadis is onto something.

walshemj6• 7 years ago

Exactly back in the 50's 60's performers got ripped off left right and centre.

bitL• 7 years ago

Everybody should read about Tibetan society in the early 20th century to understand consequences of extreme rent seeking... Hell has many forms.

teh_klev• 7 years ago

If you read to the end of the article:

He’s considering launching a songwriter’s union, something akin to the Screenwriters Guild, that would give songwriters more leverage to extract better deals from the industry’s power brokers.

Is that such a bad thing?

Railsify• 7 years ago

You are correct, Piketty provides empirical evidence that supports this theory in "Capital in the Twenty First Century". Essentially the return on capital investment is always greater than labor. He also suggests this rule and feature of capitalism threatens capitalism itself as long as wage earners make no efforts to themselves invest their wages. There was a brief period post war where wage earners did invest their wages but that fad has ended, now we spend all our wages plus some. The 'plus some' is often at interest rates the mafia would be proud to charge. Any salary increases earned are generally spent to pay off this debt while incurring more debt to enhance our lifestyle. The dollar will collapse eventually, maybe not in the lifetime of anyone reading this, but it will happen.

electriclove• 7 years ago

Would be nice if he bought them to make them free.. this is just another capitalistic play by those who are already wealthy.. great..

zozbot2343• 7 years ago

I wonder why this guy thinks that the rights to a successful song are an "uncorrelated" asset. Wouldn't strong economic growth mean that people are far more likely to spend money on these things? Especially for 'sync' rights which mostly come up for things like ads, or derivative mass-marketed media (e.g. successful song X ends up in the soundtrack of movie Y)? Just seemed like a weird claim to me.

DSingularity• 7 years ago

Yeah. And that money goes to him. And with a weak economy people will stop paying him but now the streaming services will pay him more.

stuart78• 7 years ago

While everything may be influenced by macro trends, there will still be movies, Super Bowl Ads, radio and Spotify playlists which rely on music licensing. It may dip in bad times, but the bet is that they will do better than other investment types.

MR4D• 7 years ago

Uncorrelated probably means to the stock market. The US market was up about 30% in 2019, but I doubt the value of any particular Taylor Swift song increased by that much.

I’m sure there is some correlation to general GDP growth, and you would actually want that. It’s the specific stock market correlation that you tend to not want.

lordnacho2• 7 years ago

He really means "less correlated". Just about everything is glued to interest rates and the general economy.

bagacrap• 7 years ago

He raised $1B of others' money; he hasn't spent anything close to that yet, even in aggregate. The article is extremely light on details of why this guy thinks he can turn a bigger profit off these song catalogs than the traditional publishers can, but I guess he's cutting a lot of fat compared to the big publishing houses? This seems positive to me because it's shifting more money towards the artists:

"In the music industry, paying for assets at a 10x multiple is considered top dollar. Mercuriadis is reportedly paying up to 20x, making it impossible for others to compete."

nickthemagicman2• 7 years ago

That's optimistic of you to think that he's going to give more profits to the artist.

cpach• 7 years ago

Nitpick: To the songwriters.

zaroth• 7 years ago

If he’s paying 20x multiples versus 10x multiples than that is exactly what is happening.

His investors take all the risk on trying to make a return on that investment, the songwriter gets paid double up front.

mrnobody_67• 7 years ago

His big bet is that the assets are undervalued...

Could end up exiting through the launch of a Music Royalties REIT. Liquid assets that trade always get a premium over illiquid limited partnerships. Could be an interesting asset class for diversification that's relatively uncorrelated...

Anyway, full investment prospectus for his fund is here: https://static1.squarespace.com/static/5937f2f1bebafb1297678...

wtn• 7 years ago

That would be a royalty trust.

Scown• 7 years ago

Think the killer point is making "synch managers" responsible for far fewer songs than traditional publishers.

They're effectively treating each song as an artist with its own manager, so naturally that manager is gonna be much better able to see how and where to place "their" songs.

decasia3• 7 years ago

This new moment of marketization is interesting to observe from the sidelines.

I'm a musician but I've never gotten paid for making music and don't want to be. This way, songwriting and playing music can remain something I do purely for the intrinsic joy of it. And it's not really so long ago that, if you wanted music in your house, you had to play it yourself.

I have nothing against recorded music or professional musicians, but it's interesting how much we seem to collectively forget that buying music isn't the only way to have access to it. Not everything we need has to be obtained as a commodity (still less through a monthly subscription).

maroonblazer2• 7 years ago

I could also write my own novels and produce my own TV shows but they wouldn't be as good as what an Orwell or Sorkin could produce.

jahewson• 7 years ago

Do the things you do have to be world-class all-time greats in order to be worth doing?

decasia3• 7 years ago

Sure. And the pleasure you would get out of this would depend in part on your skill in the relevant medium.

But I think there's a significant difference: with music, as you play it, you are also experiencing ("consuming") it. And that's what also brings a lot of the pleasure to it.

With writing and videography, meanwhile, the act of production is usually a lot more decoupled from the experience of consumption. I happen to think that producing writing and producing video are also fun activities in their own right. But they don't fit into social life in the way that playing someone a song does.

pessimizer2• 7 years ago

I don't mean to flatter you, but there's no evidence of that.

Can_Not• 7 years ago

Obviously that's because you'd have to be doing it after spending your primary energy in your current 40-60hr job and plus you don't have money to hire professional editors and screenwriters. I guess we'll never know if you lacked the talent or not.

corrys3• 7 years ago

I mostly agree with this sentiment. However, even in the pre-recorded music times there was a pretty clear separation between the music people would play themselves at home and the music they would actively seek out to hear in a more professional environment (churches, concerts etc). When first recording mediums were invented, people were really excited specifically about being able to preserve and listen to the greats, not just any music.

pessimizer2• 7 years ago

Before music was recorded, copyright cops chased people playing songs or trading sheet music, bootleg player piano rolls, and fakebooks. Recording didn't change much - the people playing the music get far less protection or benefit than people who get the songwriting credits and the publishing.

jancsika2• 7 years ago

Who is buying music? On the whole don't people either stream it or look it up on Youtube?

52-6F-623• 7 years ago

Plenty of people!

There’s a market. Not what it once was, because what was once the recording market was born out of necessity as much as anything else.

I, like a lot of other people, am definitely interested in the ephemera. I like owning records. There’s a tangible ritual to putting a record on, and there’s really something to be said for the sound. Even dirty records with their occasional pops and scratches. It’s a visceral appreciation for the medium, to be sure. That said I also buy a lot of paper books.

There’s also something to owning a copy. I use Apple Music these days when I’m commuting or on the road and it’s great. I can hear most anything I want for the price I pay each month, but I even still buy copies of albums I really love because they’re mine. It won’t go away if Apple decides to kill the streaming service, or if I decide to unsubscribe (which will be the case at some point because the stacking up of subscriptions wears on me).

On the whole? I don’t know. I’m curious about the data, too. But who is buying music? A lot of people! There is still a lot of people who don’t just see it as a commodity.

On that last note I’m not a great trend-chaser, so I probably have a certain lens I see the whole thing through—but I’m not the only one.

slothtrop• 7 years ago

Avid music fans do. And also it's easier to manage a vast digital collection any way you see fit than going through streaming options that offer next to no organizational capability except creating playlists, and maybe a master list of all artists you follow.

Organizing data is a problem music freaks have.

pzmarzly• 7 years ago

All the music I'm listening to nowadays is the songs I buy on Bandcamp, and I'm far from being a hardcore music fan. I do see music as commodity, and that's why I don't mind limiting the selection available to me. I download the songs I buy to my laptop, and stream them to my phone via Bandcamp app. It has bugs and imperfect UI, but so does every Subsonic or Plex client I've tested.

The main problem with streaming off Youtube is that, unless you stick to popular songs (>100M views), it's just a matter of time before some songs in your playlists become unavailable ("video is not available in your country", or unofficial upload gets deleted). I've been using NewPipe (Android) and Ivory (iOS) to play YT videos in background, so I'm not as annoyed with that as I would've been if I had been paying for Youtube Music, but it's still a deal breaker. Meanwhile on Bandcamp, some songs I bought have been deleted since that time, but I still have them in my library and can stream them in the app (I can't share link to these, though, as it's 404 unless you're logged into an account that has these in the library). Of course I could have been downloading YT videos to my PC, and stream them via Subsonic, and I was doing exactly this for many years, but I kept having weird issues with that (and it's metadata hell).

If I were to switch to Spotify, I would have to leave my music collection behind, as the songs I have on Bandcamp are not on Spotify, and vice versa. But I don't see a reason to, as Spotify would also be more expensive option vs buying 1-2 $2 albums per month. And the money I would be paying to Spotify wouldn't even go to the artist I listen to afaik, since the only thing that matters when it comes to Spotify payouts is the total number of times your songs have been played, which is determined in a large part by what the recommendation algorithm has been recommending to hairdressers and drivers, as well as what the current mainstream trends are.

hakfoo• 7 years ago

A compact disc is, for practical purposes, indestructible under normal use (compared to vinyl and tape, which degrade in playback) Rip it lossless and use good backup discipline, even more so.

It's never going to say "our business model requires you pay 20% more to keep listening to me", or "we're going to stop working on your favourite playback device because we changed the DRM and expect you to buy a new one."

No service-based model can match those claims.

beefield• 7 years ago

Sorry, but you do not exist. Everybody knows that we need to have IP because otherwise nothing currently under copyright or patents would be produced.

(Sarcasm.)

jancsika2• 7 years ago

This new moment of marketization is interesting to observe from the sidelines.

I don't see what "marketization" has to do with things.

There have been plenty of "busy beavers" over the years organizing all the music recordings on various non-commercial services at a scale that surpasses most similar commercial services. If anything, "marketization" has prevented them from making these collections even bigger than they have been.

Those collections are thus better seen as a resource for people who want to play music themselves, rather than as a consumer substitute for musicianship.

rdiddly• 7 years ago

Yeah and you know, thank god for that. As a musician I thought I would be interested in reading this article, but I kept finding myself fiddling, doing other things, looking at other tabs, even playing 2048 at one point. I guess I will always be a peasant, because this guy and everything in this article is FUCKING BORING. Why would I do any of that when I can play music anytime I want? I "have" music in a way they never can. If I write one song right now, that's 1/0 = infinity percent more than he's written. I respect this guy about as much as I respect someone who pays for sex.

pascalxus3• 7 years ago

Yup, my 4 year old sings in the car whenever we're on a trip. Only problem is, you don't get to pick what's playing and there's NO volume control. lol.

amelius• 7 years ago

but it's interesting how much we seem to collectively forget that buying music isn't the only way to have access to it.

I guess the other way is to play at home, in isolation, so you don't need a license like you would need when playing for a group?

choward• 7 years ago

This is what's considered innovation. It's not innovative in that he's solving a problem but just an innovative way to try make more money.

microcolonel3• 7 years ago

What's to say he's not trying to provide an innovative service? It'd be interesting to be at least able to license most pop music from one place, not that this is an ideal way to get there. If he prices pop music out of the culture, then less popular music becomes a viable alternative.

adamsea• 7 years ago

Hopefully it will make the world a better place!

zozbot2343• 7 years ago

It'd be interesting to be at least able to license most pop music from one place

Didn't Spotify do that already?

_jal• 7 years ago

This is finance. "Innovative" means it puts more money in a banker's pocket.

dangus2• 7 years ago

And more money in the investors' pockets.

Essentially, the summary of this article is that this dude thinks he can leverage these song catalogs better than other investors. He's literally a music fund manager for music.

His firm is "overpaying" for these back catalogs because he's essentially putting together a collection that might command more revenue than other "fund" managers, and possibly set up something of a targeted monopoly, and he's betting that they can extract more value than less competent managers and record labels.

It wasn't directly addressed in the article but I suspect that the general strategy is to own the majority the sorts of songs that are more suitable for generating Synch fees. A big corporation is going to look around for a collection of songs that tend to do well in a TV commercial, for example. Perhaps they find that Hipgnosis happens to own all of them, and now they have to pay a higher rate, and all of a sudden the high price paid for this catalog doesn't seem like overpaying.

gigatexal2• 7 years ago

all this means is that musicians need to find a way to own their masters. You will never see Chance The Rapper sell his masters for the very reason this guy is buying up rights.

setpatchaddress• 7 years ago

The publishing rights are where the money is. Owning the masters doesn’t help much.

gigatexal2• 7 years ago

oh, dang. I thought they were one in the same. Then this guy is going to make a ton of money.

microcolonel3• 7 years ago

Thank you, if you try to make anything from that, we'll he a much healthier recorded music market.

A billion dollars seems a bit low though, no? Surely he's gonna miss a lot.

gilbetron• 7 years ago

"I don’t believe in material things."

Wants to own everything musical and starts up a billion dollar fund to do so.

anm89• 7 years ago

This kind of posturing is nauseating but I find it to be bizarrely common.

I think if you are not an overly literal person it makes more sense though. It's social posturing which is meant to mean "I don't like the most extreme elements of consumer culture like designer belt buckles and luxury automobiles". To many people "believing in material things" means that and not what they are literally saying.

It seems like many people find this type of exaggerated speech to be really charismatic which I find really annoying.

hinkley2• 7 years ago

Spends a lot of time in record shops expanding his collection.

chiph• 7 years ago

Has he never heard of the Hunt Brothers and their attempt to corner the silver market? Supply & Demand dictates that prices can go higher than you are liquid.

https://en.wikipedia.org/wiki/Silver_Thursday

fastball2• 7 years ago

With songs though, they'll generate revenue while you're sitting on them. Silver doesn't do that.

cgriswald4• 7 years ago

With songs though, they'll generate revenue while you're sitting on them.

How, exactly? I'm fairly certain most of a songs revenue is made by the first year. To go beyond that, you've got to get your song back in the public mind.

Silver doesn't do that.

You can certainly borrow against the value of the silver to fund low risk investments.

kaffeemitsahne• 7 years ago

I don't think you can really corner the market for songs, people can just make new songs. Also if you don't have a lot of media clout besides owning some pop songs IP there's nothing you can do to keep the popular taste aligned to your music portfolio.

yorwba• 7 years ago

He's not really trying to buy everything:

“We turn down 70% of what’s offered to us, and oftentimes we make the first move in finding writers whose catalogs aren’t publicly for sale,” he says.
Ultimately, his goal with Hipgnosis — which went public on the London Stock Exchange in June 2018 — is to own 15% to 20% of the overall publishing market.

That's more like someone buying up the silver mining rights across large but carefully picked swathes of land. Then he rents those rights to miners for a fee he can use to buy even more mining rights.

seanalltogether• 7 years ago

So if I'm reading this correctly, this guy is saying that traditional labels put too much time and effort into album sales and completely ignore the money available from licensing and performance royalties (if they don't own the rights to a song why would they care to)

So by buying up the rights he has the incentive to push hard to sell licenses to that music and can build up teams of salespeople to do only that. What songwriter wouldn't want to sign up if they don't like the burden of managing those opportunities themselves and don't trust that labels will put the effort in.

allcentury• 7 years ago

I think he's buying the publishing (mechanical royalties).

zozbot2343• 7 years ago

That's quite ironic in a sense, because "the publishing" is the very thing where there's a huge amount of perfectly-serviceable music that's totally in the public domain, with zero "rights" or "royalties" to contend with. And it's not just 'boring', classical pieces, but music in popular styles too. This whole setup is ripe for a "disrupt from below"/"commoditize your complement" play where someone purposely brings those old 19th century (and before!) songs from IMSLP back in style as the perfect troll move.

Heck, the record labels might do it at this point - after all, they'll still have the rights to the actual performed audio ("the master").

technofiend• 7 years ago

From the article he's dedicating marketers to synch rather than mechanicals. I quoted the explanation of all three revenue streams for people like myself who don't automatically know which is which.

With Hipgnosis Songs Fund, Mercuriadis bypassed all of them. Songwriters are able to generate revenue from three sources: mechanical royalties (the sale or legal download of a song), performance royalties (paid every time a song is heard in public, whether it’s a live performance, on TV, or in a movie; played in a bar or restaurant; or streamed), and synch fees (song licensing for use in movies, video games, and commercials). Mechanical royalties are the only stream with a set rate; performance and synch royalties are negotiated percentages. Synchs are often more lucrative for the songwriter, since they generally split 50% for the writer and the artist, with the label taking its cut from the artist’s piece of the pie. Synch is where Hipgnosis Song Fund could make them money, as Mercuriadis explained to the 177 hedge fund and private investors he pitched between 2015 and 2018.

52-6F-623• 7 years ago

In Canada what you’re talking about is managed on behalf of artists by SOCAN which acts kind of like a performers union in that they’ll go to bat for you and have health insurance plans, etc.

And you retain all rights to your creation.

http://www.socan.com/

nickthemagicman2• 7 years ago

This doesn't bother me one bit. I think he's making a mistake though.

Taylor Swift, Timbaland, and Bruno Mars are all arguably homogenous music made by marketing groups for middle American focus groups. They are endlessly replaceable, rather forgettable, artists and will be lost to history by the 'next big thing' that sounds just like it or very similar in a year or two. It has more in common with pop fashion than originally expressive art.

Music made by marketers for middle America focus groups commodifies music so that the next thing can easily replace the current thing.

Who remembers blaque, or 3LW, or All-4-One or the train is boy and girl bands from the past?

This is just the music business cannibalizing itself.

Truly expressive, original, personal, music will always be timeless in my opinion, because its irreplaceable, the style is non reproducible, and it's pretty much unexplainable how it's created.even by the artist...see led zepp, Beatles, Billy Corgan, Mozart, etc. etc.

That's my thoughts and what music I think what he should be focusing on.

dangus2• 7 years ago

This gives me the impression that you didn't quite get what the article was about, and I'm not supposed to suggest that you didn't read it but let's just say I have my suspicions.

This company is often buying songwriter's catalogs, not just specific public-facing artists that come and go.

And while you may not remember the artists names, these songs often end up in commercials and other adaptations that generate revenue, even if they're not actually the original recording.

If a commercial plays the song "Whip It," do you remember that it was performed by Devo? I sure didn't, but I've seen it in a heck of a lot of commercials, like this one: https://www.youtube.com/watch?v=VqnPciNhQXU

The rights holder to that song undoubtedly made money from that commercial, even though the lyrics have been changed.

The importance of the songwriter over the artist has been growing, all of this was mentioned in the article.

redis_mlc• 7 years ago

The importance of the songwriter over the artist has been growing, all of this was mentioned in the article.

That has always been the case in the USA.

The band's songwriter buys a mansion, and the rest rent apartments.

The Go-gos (writer Jane Wiedlin), Twisted Sister (writer Dee Snyder) and Smashing Pumpkins (writer Billy Corrigan) broke up over that, and prolly a majority of other bands.

Songwriter Diane Warren is prolly a billionaire: https://en.wikipedia.org/wiki/List_of_songs_written_by_Diane...

What's interesting is that above even that is owning publishing rights, pioneered by Frank Sinatra. He produced his own albums, then after he mastered he shopped for a distributor.

Almost no US musicians bothered to retain publishing rights, aside from Steve Vai, Frank Zappa and a few other hard-asses. I tell Youtubers to "own your publishing."

Source: in the biz.

loso3• 7 years ago

This comment is very focused on your point of view of what timeless music is. Plus your examples of who remembers are all artist or groups who were big for a song or two. Middle tier artists. There is a difference as far as staying power between the first set of artist (Swift, Timbaland, Bruno Mars)you used as an example and the second set (Blaque, 3LW, etc).

sinoue• 7 years ago

At some point this is going to suck for consumers as spotify and other streaming services get squeezed hard.

sunstone• 7 years ago

Through my bleary eyes this morning I read this on my phone as $18 and I thought, yes that would be a good investment.

zmix• 7 years ago

Title is totally off!

Jerry2• 7 years ago

Here's their investing prospectus with the complete business strategy laid out:

https://static1.squarespace.com/static/5937f2f1bebafb1297678...

carbocation• 7 years ago

Hipgnosis is a beautiful portmanteau.

goodmachine• 7 years ago

Pity the guy stole the name from Storm Thorgerson's design studio. Kind of a dick move.

https://en.wikipedia.org/wiki/Hipgnosis

walshemj6• 7 years ago

I invested in this interesting investment trust back in February last year when it was featured the investors chronical and late last year when they had an offer for subscription at 100.

I look at it as an alternate bond like investment that is not corelated with traditional bonds - target yield is 5% I think

Hipgnosis• 7 years ago

and of course this guy is trying to associate his effort with the English art design group Hipgnosis[1] that specialised in creating cover art for many famous bands.

1- https://en.wikipedia.org/wiki/Hipgnosis

JumpCrisscross2• 7 years ago

From one perspective, this looks like economically useless activity. And it could be. But it isn't necessarily so.

Historically, content creation and distribution were bundled. Distribution further bundled the content per se and performances. This was all an artefact of the up-front cost of manufacturing and distributing physical media.

With digitization, there is no reason a content creator shouldn't be able to essentially freelance. Make good content. Get paid for it. No requirement to promote yourself on social media, no need to perform for audiences. One could still do that. But it would be a vertical play, not the default.

A financial vector such as this one, which identifies good content, buys it, and then works out distribution, is one way to solve this problem.

mlthoughts20182• 7 years ago

I’d actually argue the opposite. The way it is trending in with digitization, the owners of the commodity distribution channels decide what consumers prefer, through algorithmic manipulation, seeded content and artificial scarcity.

It essentially allows the distribution channel to dictate terms both ways. If you’re an artist, you can accept a pittance to produce things the distribution channel approves of (through algorithmic selection or explicit curation), or else you can make all your money from concerts and merch.

But if you “make good content” that the actual end users actually monetarily value, it won’t succeed except for the concert and fame cultivation route. Because the distribution channel is going to be a buzzsaw mowing down your created content on the way to whatever it decides to force feed the masses. It takes free will entirely out of content selection on the part of the ultimate paying customer. They pay for what they have been manipulated to think they chose.

The alternative is something like Bandcamp where the artist just posts music and the world decides to buy it or not. But through license & regulatory capture, catalog hoarding, etc., big distribution channels can easily use non-market forces to crush these things, and what’s left is such a low volume so as to not matter at all.

It’s a certain kind of irrational exuberance / maniac grab for stock returns that we lavish ridiculous overvaluations on media delivery businesses that empower them to build these types of moats, essentially de-risking themselves from having to participate in a market by delivering a market valued product by algorithmically manipulating the consumer to eat what they’re given so the distribution channel can have all of the negotiation power.

Frankly the same is true for app store distribution and tv distribution, delivery food distribution and many other things.

Just such destructive behavior by investors (both VC and everyday) who are bidding up these kinds of “delivery capture” businesses.

m12k• 7 years ago

The article makes it sound like he's only buying proven songs, meaning they already have distribution. Also, as Napster, Pirate Bay and now Spotify have shown, distribution really is trivial - what he's buying is the right to restrict legal distribution.

JumpCrisscross2• 7 years ago

as Napster, Pirate Bay and now Spotify have shown, distribution really is trivial

Spotify is a multi-billion dollar company. I’m not sure what it does is trivial.

On buying proven content, that still increases competition on the buy side for that content. The decoupling of distribution and content acquisition still happens, and makes the top end of the market pricier. That, in turn, means more money to the lower end, et cetera.

lordnacho2• 7 years ago

Yes, financially this is similar to being good at picking credits. Some firms will default, some will not. Buy the ones that won't. Or another related analogy is convertibles, which are a sort of bundle package that is separable. That's not an economically useless activity at all.

The big question though is why does he think he'll be better at this than others? Or rather, for his investors, why will it be better after his fees?

He's got a first mover advantage by the looks of it. It takes some balls to buy a team with music experience to do this new thing. Of course you have the issue that some other guy will just do the same and compete with you, just like umpteen financial businesses (eg Private Equity).

superkuh• 7 years ago

Oh cool. Joshua Newman's print scifi dystopia short, "Feral", is coming true. https://glyphpress.com/talk/2014/feral

ghastmaster• 7 years ago

This looks to me like WeWork on a smaller scale. There is nothing innovative about borrowing money in a central bank facilitated bubble.

m3kw9• 7 years ago

They’d need to acquire more and more music as the years go by because they are always competing with other hits and the more that hits the market the more competition they have that cut into their returns. It depends how good they are at squeezing dollars from each music.

wiseleo2• 7 years ago

It will be industry-wide game over when they grab Max Martin and Lukasz Gottwald https://nypost.com/2015/10/04/your-favorite-song-on-the-radi...

I think the goal is to launch the next ASCAP/BMI/SESAC and basically charge astronomical rates for songs people want to hear. Songwriters will love it and artists will have no choice.

This is pretty much a confirmation: "Along with owning a bigger chunk of the publishing market, he wants to continue altering it. He’s considering launching a songwriter’s union, something akin to the Screenwriters Guild, that would give songwriters more leverage to extract better deals from the industry’s power brokers."

It's a public company. I might want to buy some stock in it when I can.

walshemj6• 7 years ago

Its Listed on the LSE with the code SONG

doh• 7 years ago

I think the goal is to launch the next ASCAP/BMI/SESAC and basically charge astronomical rates for songs people want to hear. Songwriters will love it and artists will have no choice.

In US, for mechanical royalties, the rates are set by government. So yes, they could charge whatever they want for live and synch, but that would have much smaller impact on the general population.

MaxGabriel• 7 years ago

For anyone else who didn’t know, synchronization rights let you use the music for TV, movies, commercials, and some more things

https://entertainmentlaw.uslegal.com/music-industry/synchron...

wahern• 7 years ago

I believe negotiated rates are often lower than compulsory rates, for a variety of reasons I couldn't begin to fully comprehend except in the abstract.

This may be less true in the digital streaming realm, but it's hard to tell through all the rhetoric.

bsder2• 7 years ago

It's unsurprising though.

There was a leaked Sony memo that showed that most of profits come from back catalog and most of their losses are from new artist development.

The memo: https://sriramk.com/memos/goldberg-music.pdf

sjwright3• 7 years ago

Makes sense given that making new music is easier than ever before—the people who do it for the love of music are probably already making good-enough recordings on a shoestring. Just look at Vulfpeck: they've had massive success just doing everything themselves.[0]

What have the labels got to compete with talented artists with a few grand of equipment in their bedroom? A bunch of commercially-minded manufactured acts pumping out me-too crap while countless layers of expensive executives and expensive "experts" polish away anything human from the art? Labels used to be successful because making recordings was expensive. Then it was because they held the keys to distribution and radio. Now it's... what?

[0] https://www.youtube.com/watch?v=rv4wf7bzfFE&t=475

peteretep7• 7 years ago

It's a public company. I might want to buy some stock in it when I can.

Why, what’s the information advantage you have over the market?

pascalxus3• 7 years ago

I don't know why this is being downvoted, this is an excellent question. it's commonly known that companies/stocks are priced using all available information thus an advantage the company may have is already priced in, hence why some highly successful companies trade at very high PEs.

wiseleo2• 7 years ago

I like the concept. I believe the value of back catalogs will only increase. As they increasingly corner the market, there should be a corresponding value increase in stock. What's not to like?

vincentmarle• 7 years ago

Replace “market” with “herd” and you already have an advantage over them. If EMH was really a thing, then everyone would stop investing period and index funds would rule the world. Clearly they’re not.

Gravityloss• 7 years ago

One can turn that around. There is a lot of good music and talented people around but the machinery around music media and distribution and life style is such that most people end up listening the same few composers and artists world wide.

So it might look that the composer or artist themselves are somehow unbelievably special.

The talent shows for example have produced quite many popular artists here. One could see that as "see, anyone can be successful!". Or one can see that the machinery can choose which talented and hard working people they make "successful".

The journalism around music is especially naive. They constantly mix up people, phenomena, music, promotion and popularity happily.

People to a surprising degree like what they think they are supposed to like.

aguyfromnb• 7 years ago

Fortunately,demand also plays a part in price setting, and simply charging astronomical prices is a sure way to increase piracy or open new markets.

m0zg2• 7 years ago

I hope he succeeds and makes "every pop song" so expensive to license that pop music just dies a natural death, yielding way to musicians who can actually play instruments and singers who can actually sing. The current situation is kind of absurd.

_wzsf• 7 years ago

In the current world, it seems the "artist" has taken the form of a hive mind (artists and songwriters) while the "instruments" are the mechanisms of production and distribution - and monetization: microphones, pickups, mixers, autotuners, amplifiers, filters, mastering artists, distribution companies, Logic Pro, digital-to-analog converters, headphones...

Unless they're seeing a live symphony or literally sitting in the recording studio with an artist, the vast majority of people (99.999%) aren't hearing music performed by the named artist. They're hearing music recordings generated by teams of people and performed by a computer.

Local musicians (the main source of music for people earlier than about 150 years ago) just cannot compete with the supranormal stimulus of pop/rock/soul written and performed and mastered by students of psychology and music and distributed by capitalists.

m0zg2• 7 years ago

It's kind of like most of the stuff in a US grocery store. It's overprocessed and it's not really food, but people buy it anyway because their TV told them to.

sbassi• 7 years ago

So, how much does a song license cost?

peterwwillis• 7 years ago

It took me a while to realize I was basically reading a really long advertisement that wasn't even intended for me. There should be little flags on stories that indicate it's basically a junket for someone's start-up.

ngcc_hk• 7 years ago

This is one of the most crazy discussion thread I saw here. Very complex with so many aspects of what should I say life’s not just music comments

Ericson2314• 7 years ago

How is this like pitched as a union and Disney at the same time? Weird....

gregf• 7 years ago

I'll worry when they start coming from 80s thrash metal.

tehjoker• 7 years ago

Concentration naturally builds in competitive markets. As each competitor is slain, you get the stuff they owned and add to your power. Nothing stops it except pressure from below. Allowing one man to own huge swaths of our cultural heritage is absolutely mind boggling insane, like a feudal king dictating what culture the peasants are allowed to have.

perceptronas• 7 years ago

Its not a physical object. Songs are not going to be locked in some room and taken from society. Its just investment from his side and that seems totally OK in my book

djmips• 7 years ago

I feel like there might be a parallel to when an older person is lured into taking out a second mortgage on their house. Are these songwriters jeopardizing their own future by taking a quick buck now?

kostko• 7 years ago

Read the title as Poop Song, I was not far off...

Iv• 7 years ago

Just a thought:

If that is really what it would cost, then for 0.1% of the cost of the Iraq war, we could have had free culture, unencumbered by copyrights. I guess for 1%, the whole century's music production released in the public domain?

Surely, it would have made more for everyone's life comfort than the operation Iraq Freedom did?

lucian1900• 7 years ago

Indeed.

Although doing nothing at all would also be much better than invading a country and causing the deaths of more than a million people.

A Man Who’s Spending $1B to Own Every Pop Song

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