
A Man Who’s Spending $1B to Own Every Pop Song - SirLJ
https://marker.medium.com/the-man-whos-spending-1-billion-to-own-every-pop-song-75df0024155b
======
lotsofpulp
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.

~~~
TomMckenny
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.

~~~
neilwilson
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.

~~~
mindslight
That assumes the amount each individual person "works" remains the same. Why
not full-time employment at 15 hours a week, with 30% of people making stuff
we need?

Most of our efficiency gains are presently being funneled into a glut of
overproduction of nonsensical "goods" (eg overfinancialization and
overadministration) rather than direct quality of life improvements of
everyone being able to work less.

~~~
neilwilson
That assumes fungibility and substitution. The reason we have 1% of people
making the food is because that is the specialisation we can't eliminate by
mechanisation and automated processes.

The "Spreading the unemployment" argument is a bit like saying we don't need
all those violin players in the orchestra, just ship a few unemployed people
in and give those violin players Thursday and Friday off.

~~~
mindslight
Sure, abstractly. But to continue the analogy - there is presently a glut of
violin players and other musicians, and everyone currently making up the
orchestras have no time to do anything else.

And yeah, the "best" orchestra is going to face an insatiable demand for their
specific time, and likely enjoys performing as much as humanly possible. But
these conditions are _exceptional_ , rather than the situation faced by
basically everybody else.

------
decasia
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).

~~~
maroonblazer
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.

~~~
decasia
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.

~~~
braythwayt
+1000

I perform Bach terribly. But I consume Bach wonderfully when I play. I call it
“Listening to the music with my hands.”

[https://www.youtube.com/watch?v=kfENUjqz4bs](https://www.youtube.com/watch?v=kfENUjqz4bs)

I have experienced this with many other physical activities. To ride a
twisting descent engages your brain more deeply than to look at the same road
or trail. To climb a boulder engages your brain more deeply than to look at
the line.

Climbers pantomime the moves before climbing just as aerobatic pilots
pantomime their routine before flying. Physical motion engages the brain a
certain way that simply thinking, listening, or watching does not.

The pleasure of listening to music with your hands begins when you first make
a single satisfying note happen. It is not necessary to be able to play what
you would like to hear.

------
Jerry2
Here's their investing prospectus with the complete business strategy laid
out:

[https://static1.squarespace.com/static/5937f2f1bebafb1297678...](https://static1.squarespace.com/static/5937f2f1bebafb1297678ff8/t/5b349487562fa750e010ad3a/1530172554717/Hipgnosis+Songs+Fund+Limited+-+Prospectus.pdf)

~~~
carbocation
Hipgnosis is a beautiful portmanteau.

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

[https://en.wikipedia.org/wiki/Hipgnosis](https://en.wikipedia.org/wiki/Hipgnosis)

~~~
trsohmers
Since it says his favorite band of all time is Pink Floyd, it is fair he is
using the name as Storm and Hipgnosis designed all their major album covers.
Hopefully he paid for the name...

------
wiseleo
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...](https://nypost.com/2015/10/04/your-favorite-song-on-the-radio-was-
probably-written-by-these-two/)

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.

~~~
peteretep
> 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?

~~~
wiseleo
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?

~~~
peteretep
The thing not to like is the current stock price, because everything that you
like about it will have already been analysed in deep detail by the market,
and priced in.

By investing in a public company, you are saying “I think the market is wrong
about the potential for this company”, and I’m curious to know why you think
that having read this public piece, you think the company is currently
undervalued? The shares are at £109 — what price do you think they should be
really?

~~~
CathedralBorrow
That's why I ignore coins I find on the street. If they were real someone
would have picked them up already.

~~~
peteretep
If you see a coin on a street aggressively patrolled by hundreds of people
whose fulltime job is searching for dropped coins, you’re better off assuming
it’s not a coin

~~~
CathedralBorrow
Exactly. No point in even trying anything, if it's a good idea someone has
already done it.

~~~
peteretep
It’s foolish to assume supernormal returns on investment in a highly
competitive market without either innovation or insight, yes.

~~~
CathedralBorrow
Assume supernormal returns? Who did you mean to reply to? If it was me, why
are you creating words out of thin air and placing them in my mouth?

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

~~~
technofiend
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._

~~~
ancientworldnow
For people curious about synch rates, a friend just licensed the music (not
performance) to an unknown song for promos for a major streaming production
with A listers for $8000 on a two month license. This was with the assistance
of an entertainment lawyer.

Of course every case is unique.

~~~
djmobley
Sounds like this is all the money being poured into television and film
content by Netflix/Amazon/Apple etc. trickling down.

~~~
SyneRyder
On the flipside, we now have Discovery Channel refusing to use music with sync
licensing costs (ie licensed through ASCAP, BMI) and demanding composers sign
away their royalties if they want their music on the show:

[https://variety.com/2019/music/news/discovery-networks-
compo...](https://variety.com/2019/music/news/discovery-networks-composers-
music-royalties-1203434924/)

------
bagacrap
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."

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

~~~
zaroth
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.

------
JumpCrisscross
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.

~~~
m12k
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.

~~~
JumpCrisscross
> _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_.

~~~
look_lookatme
They are saying distribution is trivial from a technical perspective.

Acquiring the rights to distribute profitably is non trivial, of course.

------
zozbot234
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.

~~~
MR4D
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.

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

------
tehjoker
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
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

------
Iv
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
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.

------
chiph
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](https://en.wikipedia.org/wiki/Silver_Thursday)

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

~~~
cgriswald
> 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.

~~~
djaychela
> 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.

Bass player with a 70s pop star who's still working and making music here....
I know that his hit songs still generate a significant amount of income for
him (I'm not giving figures, but I would be more than happy if I had that much
coming in for a full time income, let alone as passive income 50 years later).
The songs get airplay, and get used in adverts and so on, and that generates
income that I'd certainly be very happy to have. (I don't, I'm just a hired
hand, very late to the party!)

~~~
cgriswald
That's kind of my point. Getting airplay and being in adverts helps keep his
song in the public mind which generates income from the song. _He_ may see it
as passive income, but people are doing things to keep that income going. I'm
also guessing he didn't start out eight figures in the hole by purchasing his
songs from someone else.

~~~
1123581321
Passive income typically refers to whether the owner of the income-generating
asset needs to put in a significant amount of regular effort to generate the
income, not whether anyone in the value chain does.

~~~
cgriswald
The question wasn't about whether anyone in the value chain gets passive
income, but whether the songs generate revenue 'by sitting on them.' If you're
going to invest in either silver or songs with the intention of doing nothing,
which are you going to invest in? The experiences of a 70's pop star getting
royalties are not equivalent to what Mercuriadis will have to do to produce
revenue from his investors' investments.

------
gilbetron
"I don’t believe in material things."

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

~~~
anm89
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.

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

~~~
michaeljohansen
This is not the Bond villain we want.

------
choward
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.

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

~~~
dangus
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.

------
Hipgnosis
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](https://en.wikipedia.org/wiki/Hipgnosis)

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

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

------
ngcc_hk
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

------
m3kw9
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.

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

------
peterwwillis
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.

------
djmips
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?

------
makapuf
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.

~~~
HenryBemis
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!

~~~
corrys
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.

~~~
masklinn
TBF GP's comment was responding to

> new songs ans creativity destroys value of old songs […] new songs have no
> incentive at all to emerge

and though it's probably not the most popular genre today, there's plenty of
post rock being made these days:
[https://www.reddit.com/r/postrock/wiki/albums/2019](https://www.reddit.com/r/postrock/wiki/albums/2019)

------
Ericson2314
How is this like pitched as a union and Disney at the same time? Weird....

------
m0zg
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
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.

~~~
m0zg
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.

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

------
microcolonel
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.

------
sbassi
So, how much does a song license cost?

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

------
zmix
Title is totally off!

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

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

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

------
nickthemagicman
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.

~~~
dangus
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](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
> 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...](https://en.wikipedia.org/wiki/List_of_songs_written_by_Diane_Warren)

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.

