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The mid-2021 report of the songs Hipgnosis – Billboard

The company announced Thursday (December 16) in its biennial report to investors. Net sales — total revenue minus royalties paid to musicians under contract and catalog management — grew 31% to $74.1 million during the same period.

Since its launch in 2017, Hipgnosis has built a catalog of more than 65,000 songs with a net worth of $1.63 billion as of September 30, up from $1.46 billion on September 30. March 31. (NAV is acquisition cost minus depreciation) An alternative measure. , “active” NAV, which increases the fair value of the portfolio to NAV, increasing from $1.81 billion to $2.09 billion. On a per share basis, Hipgnosis’ six-month NAV return for the period was 4.63%, bringing its total NAV return since its 2018 IPO to 46.7%.

The latest additions to the Hipgnosis catalog include the Red Hot Chili Peppers, Christine McVie of Fleetwood Mac, British rock group Kaiser Chiefs and country artist Rhett Atkins. It currently has writer shares, publisher shares, or all 11 of the 30 most viewed videos on YouTube and 49 of 190 songs that have surpassed one billion streams on Spotify, including “What Do You Mean?,” Journey by Justin Bieber. t Stop Believe” and “Havana” by Camilla Cabello.

Most of its catalog comes from the kinds of songs that publishers have won first: rock and pop songs that are more than 10 years old that consistently hit the radio, stream, and appear in movies, television, and music. advertisement. That immortality is what makes music a “countercyclical” asset — meaning it isn’t associated with larger economic shifts like recessions — that investors have grown increasingly fond of in recent years. .

But music hasn’t completely weathered the pandemic as streaming revenue has skyrocketed from subscription services like Spotify and Apple Music. In 2020, the closure of live performance venues, bars, restaurants and retail affects performance royalties, which represent 27% of Hipgnosis’s net sales for the six months ended March 1. September 30. Thus, on a similar basis, revenue from its portfolio fell 7.9% in 2020 ignoring incremental revenue from its newly acquired portfolio.

Performance earnings fell 2% to 27% for the six-month period, from 29% of revenue for the 12 months ended March 31.

Hipgnosis expects “further effects to come in the short term” but believes the worldwide market recovery will help royalties return to fiscal 2021 levels by fiscal 2023.

With a seemingly unlimited number of established portfolios, Hipgnosis raised £156 million ($206.5 million at current exchange rates) in equity over the period, bringing its total equity to £1.3 billion ($1.72 billion). Additionally, Hipgnosis has a $600 million revolving line of credit fully drawn up, up from $400 million reported in September 2020. It won’t sell more shares until after March 31. 2022, though the founder. Merck Mercuriadis has partnered with private equity giant Blackstone to invest up to $1 billion in music assets over the next year — through Hipgnosis Songs Management, not its copyright fund.

Hipgnosis’s biennial reports to investors provide the industry’s best snapshots of new business models in a short span of publicly available details. Far from being a traditional music publisher, not a passive investor, the Hipgnosis Songs Fund is a shell company incorporated in Guernsey and listed on the London Stock Exchange. To raise equity on the LSE, Hipgnosis became the first company to create a new asset class in music, copyright funds, a move that accelerated the growth of independent publishing companies and helping to attract more institutional investors to the space.

Unlike a traditional company, Hipgnosis has a non-executive board of directors and many consultants — accountants, legal, business managers — but no employees. Mercuriadis, the face of the company, also heads Hipgnosis Songs Management, an investment advisor that aligns catalogs to capture and add value from songs “that have been abandoned in the hands of publishers “, he wrote in the report.

HSM promotes its songs and pursues sync licensing, a 20% increase from Q2 to Q3. It also works to build a presence on TikTok, where “breakthrough activity… leads directly to YouTube views and streaming more songs,” he wrote. Like other traditional companies, Hipgnosis has a creative team for original works and recordings, and manages composition portfolios — currently 30 of which, with six more in the works. deployed.

https://www.billboard.com/pro/hipgnosis-songs-mid-year-report-2021/ The mid-2021 report of the songs Hipgnosis – Billboard

Dais Johnston

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