The Guardian Weekend | 27 February 2021 The Guardian Weekend | 27 February 2021 11 11Every time Merck Mercuriadis hears Ed Sheeran’s Shape Of You,
or a track by Neil Young or Shakira, he knows his investment fund
has just made more money. How did the mogul become the key player in
a gold rush to buy up song catalogues? Dorian Lynskey reportsPortraits by Dylan Coulter
to speak to investors in the UK. His Zoom background is an
array of inverted elephants: the Hipgnosis logo.
Mercuriadis has given his sales pitch to investors so many times
that his spiel feels automatic. It’s a simple concept but, until
recently, a radical one. Songs, he says, are an asset class more
reliable even than oil or gold because demand is impervious to
economic and political upheavals. When you’re feeling happy,
you play music to celebrate; when times are hard, you play
music to cheer yourself up. A classic song, he says, is a source of
“predictable, reliable income” in an unpredictable world.
Unlike a traditional music publisher, which takes a
10-25% cut for administering songs, Hipgnosis buys the
rights to 50-100% of all future royalties from songwriters
for a substantial lump sum. There’s a lot of money in
songs (the three major publishing companies pulled in more
than £2.3 bn in 2019 ) and Mercuriadis believes there could be a
great deal more. Under the old, pre-digital model, songwriters
earned most of their royalties from record sales and airplay
in the initial phase of a song’s life. In the streaming economy,
however, a popular song generates money every day, even
decades later. Mercuriadis wants to replace old-fashioned
music publishing with “song management”, which maximises
the value of songs by proactively pursuing “syncs” (placements
in movies, TV shows, computer games and adverts), samples
and cover versions. (Two songs in Hipgnosis’s catalogue,
Maroon 5’s Girls Like You ft Cardi B and Shawn Mendes’s My
Blood , were recently covered in the Netfl ix show Bridgerton .)
Starting in 2016, Mercuriadis made this pitch to 177 investors.
A handful told him to never darken their doorstep again; 38
(including the Church of England) backed him; the rest saidMerck Mercuriadis had a good Christmas. On Christmas Day,
the No 1 song in the UK was LadBaby’s Don’t Stop Me Eatin’ ,
a novelty cover version of Journey’s 1981 soft-rock anthem
Don’t Stop Believin’. It replaced Mariah Carey ’s All I Want
F or Christmas Is You, which had topped the chart 26 years
after its original release. Both songs are unkillable, evergreen
hits, which are closing in on 1 billion Spotify streams apiece.
Both songs are among the 61,000 owned, in whole or in part,
by Mercuriadis’s investment company, Hipgnosis Songs Fund ,
and epitomise the thesis that has made the 57-year-old
Canadian, in less than three years, the most disruptive force
in the music business.
Put simply, Hipgnosis raises money from investors and
spends it on acquiring the intellectual property rights to
popular songs by people like Mark Ronson , Timbaland , Barry
Manilow and Blondie. In a fast-growing market, what sets
Hipgnosis apart from competitors is its founder’s bona fi des as
a veteran A&R man, manager and record label CEO. Like an old-
school music mogul, Mercuriadis sells his brand by selling
himself. Unlike those moguls, he’s a buff , teetotal vegan with
spartan tastes. “The only material thing that I really care about
is vinyl,” he says. “And Arsenal football club.” He looks rather
like a rock-concert security guard: shaven head, burly torso,
plain black T-shirt, hawkish gaze. Mark Ronson calls him “the
smartest guy in the room”.
Every weekday, he gets up at 5am, answers emails, works
out for 90 minutes and then spends hours on video calls with
musicians, investors and employees. Largely based in west
London since 1986, he is now stranded in Los Angeles by
lockdown regulations, which means he has to rise even earlier →