The Secret Broker: Keep on rockin’ in the free world(ish)
The Secret Broker
After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
As some of you may remember, one of the companies that I like in the UK is the upside-down Elephant logo’d Hipgnosis (LSE: SONG).
But this week, Neil Young managed to cause the company a bit of trouble, by insisting that all of his songs are pulled from the streaming platform Spotify, over his dislike of comments made by a podcaster that Spotify pays hundreds of million of dollars to host. (Joe Rogan – you may have heard of him.)
In fact, he managed to do more damage than a needle can, to both Hipgnosis and Spotify, as both fell on knee-jerk reactions by investors plus also managing to peeve off all of his fans (including me) that use Spotify.
My Spotify list of my favourite songs now shows me no Neil Young songs and I have to head over to YouTube, where they are free to play.
It turns out that Young had polio as a kid, as did Joni Mitchell (who also pulled her songs from Spotify) and this appears to be their reasoning for pulling them away from their fans.
As we all know, polio injections saved all of us from contracting the disease and Young took offence to “anti-vaccination” advice by their star podcaster.
I suppose when you are married to a mermaid (Daryl Hannah) you can be entitled to do the odd strange thing and not really think your actions through.
This highlights the problems that get created when the financiers in suits get into bed with the creative ones.
Richard Branson is one of the few I can think of that managed to navigate around most of the problems that ‘artists’ can create with their oversized egos and sense of importance.
The English billionaire Guy Hands discovered this, when he took over EMI Records and introduced drug tests for all staff and stopped the ‘flowers and chocolates’ deliveries to star performers’ hotel suites (that’s their code for drugs, Ma).
It was a disaster for Hands. He lost 60% of his personal wealth and $2.5bn for his investors.
Going back to Hipgnosis, Young’s action has thrown a spanner into their investment works because they actually own 50% of ‘Neil Young’s worldwide copyright and income interests in his entire song catalogue comprising 1,180 songs.’
They own 50% because they paid him US$100m – but he can pull them off of streaming services that give them both an income? Now this is a first and highlights the very problems that these artists can create.
“Yeah man you give me $100m and I still get to choose if they are commercially available or not.”
You have to wonder who was actually enjoying the ‘flowers and chocolates’ when the deal was stitched together.
Also, what happens when Young carks it?
What happens then to the actual control on his rights?
Will Hipgnosis now have to write down their investment in their accounts, as it will impact their income flow?
These questions are now being asked.
Nothing has officially been announced by the company yet but their shares have fallen in value by more than what they coughed up to buy 50% of Young’s catalogue.
Spotify shares fell 13% on the news (or over US$3bn in value), though have recovered a bit.
However, the best reaction came from the singer James Blunt, who currently resides in the ‘where are they now’ files, with this tweet.
— James Blunt (@JamesBlunt) January 29, 2022
Let’s hope it doesn’t resort to this and differences can be sorted out. If not for the artists’ sakes but shareholders’ sakes as we certainly don’t need a new James Blunt album.
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