Hipgnosis is spending a LOT of money buying up music catalogues, but is it making much money from managing them? The company’s latest annual report offers new insight into its business, and how founder Merck Mercuriadis sees it developing. The figures cover the company’s latest financial year, which ended on 31 March 2021.
The big numbers: Hipgnosis’s net revenues grew by 66.1% to $138.4m that year, with the company recording a profit after tax of $38.9m. As for acquisitions, by the end of March Hipgnosis had spent around £1.94bn ($2.69bn) on 138 catalogues comprising more than 64k songs.
There’s also a breakdown of the company’s revenues by source: 32% from streaming; 29% from performance; 17% from mechanical/master royalties; 15% from sync; and 3% from other digital sources. Hipgnosis said that its streaming income grew by 18.4% in the second half of its financial year (compared to the first half), and noted that its next set of results will include the fruits of deals signed with TikTok and Peloton.
The annual report is long, and there are plenty of interesting nuggets of information on Hipgnosis and its business. Like the part on searching for missing YouTube revenues and finding that “up to 38% of plays have been missed in the reporting”. Or the company spotting a mash-up of ‘Toxic’ by Britney Spears and ‘Love Shack’ by the B-52’s going viral, and working to reproduce an official version to release to DSPs and for sync this summer.
Oh, and this: “We believe TikTok alone is already 6.5% of Sony Music’s revenues and we expect that in due course these emerging digital platforms such as TikTok, Triller, Roblox, Peloton and others will generate as much as 15% of our revenues.” That first figure hasn’t been officially confirmed by Sony Music, but it certainly merits further investigation.
Something that Hipgnosis is investigating, along with many other music companies, are non-fungible tokens. “The NFT space is also a focus and we aim to ensure our artists are collaborating with some of the leading creators in the crypto art space,” wrote Mercuriadis.
“This includes not only the potentially lucrative NFT landscape but also increased activity in the production and release of personalised digitally focused merchandise and collectibles utilising our copyrights which will lead to significant upside in revenues.”