With over half-century in the music industry, Merck Mercuriadis, a music investor from Schefferville, Quebec, has cut himself a niche in the music industry. Using Hipgnosis Songs, he’s one of the few music investors who fight for artists’ rights often shortchanged or exploited by record shops.

Over the years he has had the opportunity to work with legends such as Guns and Roses, Sir Elton John, Beyonce, Terius Nash (the The-Dream) and many others.

What is Hipgnosis Songs?

Hipgnosis Songs is an investment company incorporated and registered in Guernsey and located in a fashionable enclave north of King’s Cross. The company’s main goal is to offer shareholders a fair and viable level of income, potential for capital growth from investment in songs, and related music intellectual property rights.

How it Works

Hipgnosis Songs seeks to obtain 100% of a songwriter’s copyright interest in each song. This will contribute to the writer’s stake, the publisher’s stake and their performance rights. The company also aims to enter into licensing agreements, allowing Hipgnosis Songs receive payments owing to the copyright interest in the songs it owns. These payments will be in the form of license fees, royalties, or advance payments.

Mercuriadis’ role in the company is to offer a listening ear to artists, find out what’s important to them, and keep them focused on the prize. All these is down to the experience gained after the music investor horned his skills in the music industry at his favorite label, Virgin Records, in Canada.

Type of Investment

After working for Richard Branson’s label for several years, Mercuriadis chose to venture solo so he could wholly work for artists and also get good deals for them. Despite a few hiccups that lead to his first float crumbling, including the small number of investors who made the listing unviable, Mercuriadis managed to create Hipgnosis after raising £200 million.

The company shares have held steady at around 100p since its floating and plans are underway to pay the first dividend. Mercuriadis believes his business model of investing in well-established songs and tested songwriters’ has developed a new asset class, marketable as black gold or precious metals.

Hipgnosis Songs Portfolio

The company’s focus is on small catalogues of proven hits and not several songs that may either be a hit or miss. Thanks to Mercuriadis, Hipgnosis signed its biggest contract on listing, buying 75% of Terius Nash (the The-Dream) over 300 songs catalogue. The rapper’s catalogue features divas such as Beyonce’s single lady and Rihanna’s “Umbrella”, all for £18 million. The next project is for the company to duplicate and transition the songs from film and TV adverts to increase revenue.

Risks Associated With Piracy and Counterfeiting

Since the collapse of the first Hipgnosis Songs float, the streaming market has grown exponentially. Affordability of computers and electronic equipment and related technologies has made the unauthorised reproduction of music much easier. Besides, easy access to high-speed internet connections allows users to share or download music, without paying royalties or getting the copyright owner’s authorisation.

This form of piracy damages the fans’ perception of the recording artist and robs the artist of future earnings. The good news is investors trust in Hipgnosis Songs is at an all-time high as everything Mercuriadis predicted has come to pass.

By Jeff Mwaura, Jeff is Kenyan based freelance writer with a focus on technology and finance.