Yesterday, a publicly traded British company called Hipgnosis Songs Fund announced a $ 323 million deal to acquire the rights to 33,000 songs, including “Love Shack” from The B-52, “Go Your Own Way” from Fleetwood Mac and “All I Want For” by Mariah Carey Christmas. “
Hipgnosis has been one of the most aggressive song rights buyers in the past few years, raising over $ 1 billion to put together a catalog of hits. The company sees dollars flow when any of its songs are streamed, purchased, or performed.
For Hipgnosis and its supporters, music fees provide a relatively stable source of income that does not correlate with other asset classes. And in a world with near zero interest rates, a lot of money is listening:
Just last month, New York-based Round Hill Music announced a planned $ 375 million initial public offering on the London Stock Exchange to create a catalog of 120,000 songs.
The strategy: It’s simple: identify underrated songs and extract value by using them in ads or creating new covers to generate interest.
Streaming Central: Performance income from live events has been decimated by the coronavirus, but a structural boom in streaming income has provided tailwind:
Streaming revenue rose to $ 11.4 billion last year from $ 9.2 billion in 2018, according to the International Association of the Phonographic Industry. By 2030, Goldman Sachs estimates the market could be worth $ 45 billion.
Take that away: This is music for the ears of the rights holder.