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Hipgnosis: Impact of Copyright Royalty Board III Decision

The Board of Hipgnosis Songs Fund Limited, the first UK listed investment company offering investors a pure-play exposure to songs and associated intellectual property rights, and its Investment Adviser, Hipgnosis Song Management Limited, welcome the decision of the US Copyright Royalty Board (CRB) to disallow the appeal by various streaming services against the CRB III determination to increase mechanical streaming royalty rates for songwriters and publishers. 

The increase, which is incremental over the period covered by CRB III (1 January 2018 until 31 December 2022) will culminate in a 44% uplift in the “all in” (mechanical and performance) statutory minimum rates for streaming paid in the US, rising from 10.5% of streaming revenues prior to 2018 to 15.1% in 2022.


Commenting on the decision, Merck Mercuriadis, Founder and CEO of Hipgnosis Songs Management, said:

“Using the success of Hipgnosis to change where the songwriter sits in the economic equation has been a massive priority for us from day one. 

“The song is the currency of our business, without the song we simply have no music business. Yet 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 etc., is the lowest paid person in the equation. 

“We still have plenty of room for improvement before we have a rate that’s genuinely fair and equitable but this is an important step on the road to finally, properly 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 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.”

For most of the period since the appeal was launched in 2020, the majority of the increased revenue due to the owner of song copyrights has been withheld and revenues have been paid off the CRB II rate of 10.5% in most cases. Hipgnosis will now receive US streaming revenues based on the royalty rates set out in CRB III.

In addition, Hipgnosis has not accounted for any withheld revenue since 2020. This is expected to be received by Hipgnosis in the coming periods, as money flows from the Digital Service Providers (DSPs) to the publishers and then copyright owners.

We expect more details once the full ruling is released.


CRB IV, which will determine songwriter payments for 2023-27, is currently underway.

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