RE: Neil Young4 Feb 2022 11:53
I received a response from the Director of Investor Relations at Hipgnosis late last night. I am not going to cut and paste the full response but will summarise what he said:
Streaming is only be a part of their revenue (for SONG as a whole it is c33%), and Spotify will only be a part of the streaming element. Variety magazine quoted an estimate from Billboard that Neil Young earns $754,000 each year from Spotify, in which case Hipgnosis’ share would be half that, which would put it at 0.25% of annual income. They are fine with that assumption.
Hipgnosis bought 50% of all writers copyright & income rights (ie publishing side, not masters). There are 590 songs, as listed in the annual & interim reports.
As a result of recent publicity, Neil Young’s profile has never been higher and his music is actually seeing a significant increase in consumption despite being removed from Spotify. Other digital service providers have been promoting him actively; In the 7-day period after Neil Young asked Warner to take down his music from Spotify, the US streaming of Neil Young was up 28% and album sales were up nearly four-fold. Neil Young is also being listened to by a new younger audience that support his position on vaccination – a core part of Hipgnosis’ thesis has always been that introducing music to a new audience will increase the long term revenues.
The use of music on streaming platforms is controlled by the Master Right’s holder i.e. the record label.
In the case of Neil Young this is Warner Music who have the master recording rights and they made the decision to remove their recordings from Spotify at Neil’s request.
In the context of whether Hipgnosis can control the use of our songs, we structure the contracts such that the writer cannot do anything that would negatively impact earnings. In this case (quite aside from the fact the figures show a positive impact), SONG supported Neil’s decision, given that intrinsic in the value of his songs is the way he conducts himself, and to not do so would alienate his audience who make the attractive income on his catalogue predictable and reliable, and in the context of this being a temporary measure. This should also help attract other important songwriters of Neil’s stature and importance to Hipgnosis. They fully expect this to be a temporary one off. Finally, he noted that Spotify (on their earnings call) apologised and noted that there was "still work to be done" which could hopefully lead to constructive dialogue with Warner/Neil.
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