Shares in Hipgnosis Songs Fund climbed today after after a fresh court decision effectively meant it will be able to collect a greater royalty rate for music streaming.
It comes after the US Copyright Royalty Board upheld its decision regarding the top-line streaming royalty rate for songs, which boosted the percentage of streaming service revenue allocated to the song rights in the US, upping it from 10.5 per cent to 15.1 per cent.
Most of the major streaming platforms appealed this decision, with Apple Music sitting as the odd one out.
As it stands, a panel of judges known as the CRB set the rate paid by streaming services to music publishers and songwriters in the US.
Spotify has previously argued that it didn’t oppose a rate increase in principle, but pushed back against the technicalities of a compulsory licence.
Commenting on the decision, Merck Mercuriadis, Hipgnosis Songs CEO and founder, said: “The CRB has delivered a strong message not only to the digital service providers like Spotify but also to the recorded music companies about the importance of the songwriter in our industry.
“Congratulations to all of the incredible songwriters that have entrusted us with their incomparable songs as well as to each and every songwriter that goes to work each day to write great songs and make the world a better place. This is a victory for all of you.”
While the investment firm said this is a win for songwriters, AJ Bell analyst Russ Mould said: “Deep down we all know it has a big grin on its face, given it will also benefit from the songs on which it holds royalties”.
“What’s unknown is how this will affect valuations for future royalty deals – the potential to earn more money from them would suggest royalties will become more expensive to buy”, he said.