Victory for Hipgnosis in royalties battle with streaming services

Victory for music fund Hipgnosis as US authorities order streaming services to increase royalty payments

Hipgnosis hailed a decision by US copyright regulators that could see it receive millions in extra royalties. 

The music fund buys the rights to songs from artists and songwriters, and owns work by the likes of Shakira and Ed Sheeran. 

And yesterday the Guernsey-registered group welcomed a decision by the US Copyright Royalty Board (CRB) to uphold a decision to increase the percentage of royalties paid by streaming platforms on songs played between the start of 2018 and the end of this year from 10.5 per cent to 15.1 per cent. 

Royalties ruling: Hipgnosis buys the rights to songs from artists and songwriters, and owns work by the likes of Shakira (pictured) and Ed Sheeran

Streaming platforms including Spotify and Amazon Music had appealed against the decision in March 2019, but the CRB rejected their arguments. 

The decision means Hipgnosis will receive extra cash from the streaming firms for all of its songs that were played on the platforms over the five-year period. 

Hipgnosis boss Merck Mercuriadis said the ruling was ‘an important step’ to recognising ‘the value that songwriters bring to the industry and the lives of the billions of people all over the world who rely on great songs to enrich their lives’. 

The 58-year-old added: ‘For too long the songwriter – who delivers the most important component to the success of a record company, digital service provider, music merchandiser, live promoter and so on – is the lowest paid person in the equation.’ 

AJ Bell investment director Russ Mould said Hipgnosis would have ‘a big grin on its face’ as it would benefit from higher royalties from the songs in its catalogue. 

Analysts at broker Liberum added the decision would result in a ‘meaningful’ increase in revenues, although it was ‘difficult’ to work out how much it would boost earnings as it was unclear what percentage of Hipgnosis streaming revenues came solely from US streaming platforms.