To date, Hipgnosis has spent more than $ 1 billion on the music of artists Mark Ronson, Chic, Barry Manilow and Blondie. The latest acquisition is LA Reid’s song catalog, which means it has a stake in Boyz II’s Men’s End Of The Road, Whitney Houston’s I’m Your Baby Tonight and Bobby Brown’s Don’t Be Cruel.
When these songs are broadcast on the radio or used in a movie or TV show, Hipgnosis earns money and, through the association, the Anglican Church, joined by other investors, such as Aviva, Investec and Axa.
According to the founder of Hipgnosis, Merck Mercuriadis, the music he bought “is more valuable than gold or oil.”
“These extraordinary and well-established songs have predictable and reliable revenue streams. If you take a song like Eurythmics ‘Sweet Dreams or Bon Jovi’s Livin’ On A Prayer, it’s three to four decades of reliable revenue, “he explained.
Mercuriadis says that successful parts are a stable investment because their revenues are not affected by fluctuations in the economy.
“If people lead a very good life, they do it on a soundtrack of songs. But, equally, if they face the kind of challenges we have faced in the last six months, they will be relieved and forget about the problems with extraordinary pieces. Therefore, music is always consumed and always generates income “, he added.
In fact, with Spotify users growing by a monthly average of 22% between March and July, streaming royalties increased during the Covid-19 pandemic. As a result, Hipgnosis stock prices have largely withstood the turmoil that has affected much of the business world.
Mercuriadis, who hails from the Canadian region of Quebec, entered the music industry after calling the Virgin Records office in Toronto for months, until she was given a job in the marketing department, where she worked with clients such as UB40 , The Human League and XTC.
In 1986, he joined Sanctuary, eventually becoming its CEO, where he managed the careers of Elton John, Iron Maiden, Guns N ‘Roses, Destiny’s Child and Beyoncé, and worked to relaunch Morrissey’s career in 2004.
Kanye West recently called him one of “the most powerful and well-known people in music.”
Unlike most music companies, Hipgnosis does not focus on finding the “next big hit.” One third of the pieces he owns are more than 10 years old, and 59% are between three and 10 years old. Less than 10% are newer versions.