Who owns Hipgnosis? Sanctuary Records co-founder Merck Mercuriadis owns the music company

Hipgnosis wants to revolutionize the music industry by disrupting the current music ownership system. The company has invested billions in acquiring music catalogs from independent artists including Blondie, Mark Ronson, and Chic. It co-owns hits from Rihanna, Beyoncé, and Justin Timberlake. 

The brand has no interest in unearthing the next musical gem: its current focus is acquiring songs that have remained relevant for decades – songs it considers timeless. The company appeared on the public market in 2018, and its already forcing established publishing companies to rethink their business models. 

This piece will look at Hipgnosis’ owner and his vision for music. 

Merck Mercuriadis owns Hipgnosis and believes that songs are assets

Hipgnosis’ CEO, Merck Mercuriadis, started his career as a marketing director at Virgin in Canada. He called the company every day until executives agreed to offer him the job.

Mercuriadis then co-founded Sanctuary Records, which allowed him to work with Nile Rodgers, Ozzy Osbourne, Elton John, and more great artists. He left Sanctuary in 2006, and in 2009, he dreamed up the idea for Hipgnosis. 

In 2018, Hipgnosis raised over $807 million through its Initial Public Offering. Merck introduced a somewhat novel idea, but he convinced investors that it would work. 

Mercuriadis targets artists who own their masters and purchases their catalogs. Hipgnosis offers the artist a lump sum payment for the catalog, giving Hipgnosis control over the music’s earnings. Merc’s idea is that some songs are timeless, meaning people will play them forever, making them perpetually profitable. Merck told Complex:

“The income from these songs is very predictable and very reliable and those are the same reasons why you invest in things like gold and oil. But, in fact, music is better than gold and oil because when something crazy happens in the marketplace, or Donald Trump does something stupid or Boris Johnson does something stupid, the price of gold and oil are affected.”

Merck told BBC that the artists make 25 years’ worth of earnings in one go. Hipgnosis then retains any future profits from the music. Hipgnosis hopes that the number of people opting for streaming quadruples to 2 billion by the end of the decade. 

By then, the company hopes to own rights to over 60,000 songs. Once it hits its acquisitions target, it will focus on monetizing the songs to recoup investments. Merck hopes that Hipgnosis acquires The Beatles catalog before it closes acquisitions:

“Everybody wants The Beatles. It’s the greatest set of songs ever written. I don’t think I’d want to live if The Beatles weren’t part of this world.”

Kanye West referred to Merck as one of the most knowledgeable people in music

In September 2020, Kanye West gave Merck Mercuriadis his stamp of approval by referring to him as one of the most powerful and knowledgeable people in music. His tweet mentioned negotiations, so we assume that West and Merck have something brewing. 

Hipgnosis’ business model makes sense in theory: some songs have survived the test of time and still receive airplay. However, are the records truly timeless, or will their popularity drop as the years pass?

Also, will the popular songs of today prove to be classics in the future? How does one recognize a classic before the song proves itself to be one?

Merck has faced these questions but remains adamant that Hipgnosis will succeed. He told Complex that Hipgnosis will have achieved its goal by putting singers, songwriters, and producers on a level playing field. Everyone involved in creating music should get their fair share, he said. 

“Our agenda is to put the artist, the producer, and the songwriter at the forefront of everyone’s cortex,” Merck said. “We want to use the leverage of our financial wherewithal and our great songs to change where the songwriter and the artist sit in the economic equation. That’s a very important part of what we’re doing.”