some info on the company
https://en.m.wikipedia.org/wiki/Hipgnosis_Songs_Fund
people like Nile Rodgers (Chic) and Dave Stewart (Eurythmics) are involved
more on 'pure play' (never heard of the term myself)
https://www.investopedia.com/ask/answers/04/042904.asp
Yeah I can't figure out what's really going on here. They must be paying the artists they're buying out a ridiculous amount of money.
Can somebody please explain why you would do this? Because the article just has a vague description of the sale itself, that other people did it, and money. But why would you do this? And what is this company going to do with it?
Wu-Tang: failing the internet tubes since 1997
As far as I can tell the company gets steady revenue from the copyright of the songs. the company can actively get these songs to make money (use in commercials, movies etc) on the one hand and get investors (shareholders / stockmarket) to invest in their company. the upside for investors is that established hit music has a predictable profit pattern, unlike for instance completely new music or say (shares in) a start up company that provides a completely new and unestablished kind of service
so it is the predictability of profit that is a major selling point
furthermore music is more or less 'economy proof'. When the economy goes down the drain the entertainment industry will likely stay afloat, esp. when it comes to established music and its use in other forms of entertainment
here's a 2019 interview with the 2 people behind the company
https://thoughteconomics.com/nile-ro...kie-compliance
only the middle part of the interview discusses the economics of the company
what's interesting is that we don't know whether RZA got fully paid in cash or became a part shareholder in the company. if the latter is the case he is now taking part in steady company profits of various artists' catalog, which is smart. if not, the cash amount RZA got is the end of the stpry for him in this deal, which as I pointed out earlier in the thread he might come to regret in the long run
Last edited by Rev Jones; 08-26-2020 at 02:47 AM.
That makes sense. But this would mean that theoretically a person like Trump could go through a company like this to get the rights to one of the songs RZA sold. For example Wu-Tang Clan Ain't Nuthin' To Fuck Wit, if he has sold that song. And it would also be possible for other companies to buy the rights to songs ans use them in commercials.
You would have to put a severe trust in the ethics of this company, to now see your material end up on something you don't support. Since RZA is a vegan, I hope there is a clause that meat companies won't use his music to promote the slaughter of animals.
On the other side, investment wise, going with the idea that he got shares in stead of cash. This would be a steady revenue stream which takes the licensing out of his hands. Which frees up a lot of time.
Wu-Tang: failing the internet tubes since 1997
My guess is that they did some kind of present value of future cash flows calculation.
Hipgnosis Sounds probably estimates they can produce more revenue than what Rza is currently generating through some kind of innovative distribution or digital streaming.
They probably have enough money to offer Rza 50 years of revenue in present value. Probably a length of time greater than Rza's expected life expectancy. Term probably coincides with how long royalties last according to law.
Rza gets a huge up front payment to invest in whatever he chooses and is relieved of all the management and attorney fees and overhead associated with preserving and collecting his own royalties, and gets superior distribution via Hipgnosis Sounds.
I actually don't know anything about the terms of the deal. Pure speculation. It's probably more complicated than that. Not to mention all the varying laws worldwide.
https://www.royaltyexchange.com/leng...wnership-music
It also sounds like, from the link Hal posted https://thoughteconomics.com/nile-ro...k-mercuriadis/ that they are betting on digital streaming growing a lot in 10 years.
Now I can easily setup my own network audio stream on my cheap QNAP NAS i bought for about $300 and racked up with 4 hard drives in it and stream it to any internet/mobile connected device
But admittedly, the algorithms on SoundCloud are extremely good and play songs I really do like. Artificial intelligence knows my music taste better than any DJ!
So streaming might have a valuable purpose even though I'd still rather encounter, stumble upon, and play my own music without algorithms making my playlists. Though AI is way better than FM radio or TV video music channels.
If the company raised about a billion in capital and owns over 15,000 songs then that's $67K a song. Some higher, some lower. Average.
But I doubt all the money is actually up front. It's probably advanced in some fashion. Hipgnosis Sounds has to work out its cash flows, perhaps pay more upfront for a longer term gain.
If I had to make a wild guess, I'd say they paid Rza about $30Million in present value. I could be way off. Who knows?
Last edited by Sense-A; 08-26-2020 at 06:49 PM.
^^very informative post, thank you.
lol @ Trump walking out to Clan In Da Front hahaha
Did the Clan get anything?
-----> Check Rev. William Burks aka Chuuuch "Nigowkno", "Runnit" and "Ganja"
-----> KAMi Genesis, vol1, vol2 and vol3- beat tapes
https://open.spotify.com/artist/48z4...QcWWL0Pat0qEDQ
This analysis sounds about fair. And I was thinking the same thing bout revenue.
Regarding streaming. The average person listening to music is lazy. They use Spotify, and just listen to what is served. And most of the time they like it. They are not on a mission to discover something completely new. And that is a huge difference from how some of us listen. But betting on that, AI & Machine Learning curating a steady stream of playlists of what people want without them asking for it. That is a pretty safe bet. (Though I have to say for Spotify, you get looped n the same shit pretty fast. SoundCloud is much better in that aspect.)
And since the article is also mentioning the Clan, but it is unknown which part of his Catalogue he has sold. I do wonder if there are any Clan songs involved. If so, what would be the cut to the group.
Wu-Tang: failing the internet tubes since 1997
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