What’s a tune worth? Not as much as previously anticipated for Hipgnosis Songs Fund, the Guernsey-registered company that launched in 2018 on the promise of the song as an unbeatable financial asset.
“Sustainable earnings, uncorrelated to global capital markets, with sources of income from across the spectrum of music consumption,” promises the company on its website.
In the past six years, Hipgnosis has bought part or all of the catalogues of Neil Young, Leonard Cohen, John Coltrane, Christine McVie, Blondie, Beyoncé, Justin Bieber, Mariah Carey and hundreds of other writers and producers. Unlike a traditional music publisher, which typically pays an advance for the right to collect royalties on behalf of the owner and clips the ticket for doing so, Hipgnosis owns those songs.
The idea is that the composer gets a lump sum (Neil Young pocketed US$150 million for half his rights in 2021) and the company and its investors then steadily collect the revenue stream from the musical works. It’s not a perpetual licence: under US copyright law (and increasingly that of the rest of the world), copyright expires 70 years after the death of the composer. So the clock is ticking on Coltrane and Cohen, and Hipgnosis’s investment in Young looks better the longer he lives, productive or not.
There is money to be made from public performance rights, mechanical royalties in the recording itself, synchronisation (licensing for an ad, movie or video game) and a range of smaller streams.
That income has become more significant with the rise of Spotify and other music streaming services. More than two-thirds of the revenue publishers collect from streaming services now derives from “catalogue” – favourite songs we formerly bought once on records, but now pay for by listening to repeatedly.
But the exuberance with which Hipgnosis has acquired its assets has brought it into conflict with its own investors. The latest unhappy headline is the news that after an independent assessment, the company has marked down the value of its assets by 26%, to US$1.93 billion. Shareholders last year voted down a plan to sell off 65,000 “non-core” songs for US$440m, but that deal doesn’t look so bad now.
None of this, of course, has made any difference to the value of Suzanne or A Love Supreme to you and me, personally. The meaning of Heart of Gold did not diminish by a quarter last month because a boutique securities firm said so. This is the kind of value the musician and writer Shayne Carter talked about recently in an event for the Arts Foundation and Creative New Zealand.
“You can’t put a monetary value on poetry and beauty, or connection, or empathy, or transcendence, or inspiration, or history, or inclusion,” said Carter, “so that’s another reason why art is undervalued.”
RNZ published the text of the speech and, the times being what they are, a crop of angry, joyless bores turned up on its Facebook page to respond to Carter’s observation that musicians and other artists bring “richness, self-awareness, wellbeing and a sense of identity” to a society.
“Art is for wealthy people who live in a wealthy society,” declared one chap. Another took aim at the “disproportionate wealth” of musicians, an idea that would certainly come as a surprise to most musicians. The truth is that we have decorative objects created by homo erectus half a million years ago: art – and, surely, song with it – predates not only money, it predates us.
Carter did not, as his angry interlocutors seemed to presume, plead for government support for the arts, although that might be implicit in holding up their value to society. But perhaps the money chased by Hipgnosis is actually contingent on the value he described. Perhaps it’s helpful to be reminded that even the price of a song rests entirely on something far less tangible than a dollar.
