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As streaming services such as Spotify and Apple
Music gained mainstream popularity, Mercuriadis formed the
Hipgnosis Songs Fund to acquire music rights. The fund, which
went public in 2018, has invested $2.5 billion acquiring the
publishing rights to 64,000 compositions from such hitmakers as
Timbaland, Fleetwood Mac’s Lindsey Buckingham, The Pretenders’
Chrissie Hynde, Rick James and Neil Young.
Now he is looking at another emerging technology for music:
non-fungible tokens, one-of-a-kind digital assets - frequently
artwork, photos, videos or digital files - that are traded on
the blockchain. Mercuriadis said the blockchain, which keeps a
ledger of transactions across a network of computers, can bring
a new level of transparency to music royalties.
“Someone like Nile Rodgers, whose songs have done incredibly
well for 40 years … every six months, (he’ll) get a statement
from Sony that’s 10,000-pages long and has billions of
microtransactions on it,” Mercuriadis said in an interview at
the Reuters Next conference. “In the future, with NFT and
blockchain, those billions of transactions will be able to come
back to you in real time.”
NFTs also could provide a new type of collectible for music
fans, such as music or videos, for the same price as a
traditional tour book sold at concerts, Mercuriadis said. These
more engaging experiences are “an important part of the future,”
Mercuriadis said.
Mercuriadis is focused, more immediately, on establishing songs
as an “asset class” that will deliver reliable and predictable
revenue.
“Once the pandemic hit, it really proved the point that Merck
made about those songs, as far as being a reliable asset,” said
Rodgers, a Grammy-winning singer, songwriter and record producer
who advises Hipgnosis. The opportunity has attracted
institutional investors, including Investec Wealth & Investment,
Aviva Investors and the Church of England.
Mercuriadis says Hipgnosis can do a better job than the
traditional music publishers of managing its collection of hits,
seeking “off-market transactions” and exploiting new platforms
such as Peloton, TikTok or Roblox. A new partner, Blackstone,
which has pledged to invest $1 billion in buying music rights,
will help Hipgnosis further refine its approach to managing
songs.
“The music industry is a very, very unsophisticated for as long
as I can remember,” Mercuriadis said. “What we’re getting to is
something that's going to be much, much more sophisticated.”
(Reporting by Dawn Chmielewski. Editing by Gerry Doyle)
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