Hipgnosis expects higher streaming earnings after $1 billion shopping spree By Investing.com

By Samuel Indyk

Investing.com – Hipgnosis Songs Fund (LON:SONG) said it spent $1.089 billion on 84 catalogues in the last financial year, including the music of Neil Young, Fleetwood Mac, Debbie Harry, and Shakira.

The purchases helped the fund record a 7% increase in profit, while operative NAV increased by 11.3% to $1.6829 per share over the year.

The fund, which buys music rights and generates revenue from streaming, said streaming income increased 18.4% in the second half of the year from the previous six-month period.

This allowed the fund to increase its target by 5% to 5.25 pence per ordinary share.

“Whilst we would never have wished for a pandemic, it has not only demonstrated the predictable, reliable and uncorrelated nature of the income of proven Songs, but also accelerated the change in consumer behaviour to consuming music by streaming,” said Hipgnosis Songs Fund founder Merck Mercuriadis.

The fund hopes that future revenue won’t just be from streaming services such as Spotify (NYSE:SPOT) or Apple (NASDAQ:AAPL) Music but from a range of other digital services, such as exercise videos and online games.

“Accelerated streaming will be enhanced as revenues from TikTok, Peloton (NASDAQ:PTON), Triller, Roblox (NYSE:RBLX), and other rapidly emerging digital platforms start to be paid through,” Mercuriadis added.

“These are new income streams, expected to be a material portion of our revenue going forward, that are not in the data that we buy Catalogues on.”

At 09:22BST, Hipgnosis Songs Fund was trading lower by 0.3% at 121.97 pence.