Music royalty ruling may provide one-off income boost for Hipgnosis

Withheld streaming revenues

Hipgnosis Songs, the £2.1bn music royalty trust, will receive withheld streaming revenues thanks to a decision by the US Copyright Royalty Board. However, analysts at Numis have flagged that while there may be an income boost, it will not lead to a “wholesale change in valuation basis”.

The US Copyright Royalty Board disallowed an appeal by streaming services against a decision to increase mechanical streaming royalty rates for songwriters and publishers.   This increase, which is incremental between 1 January 2018 until 31 December 2022, will mean a 44% uplift in the mechanical and performance statutory minimum rates for streaming paid in the US. It will rise from 10.5% of streaming revenues prior to 2018 to 15.1% in 2022. For the period since the appeal was launched in 2020, the majority of revenues have been paid off at the rate of 10.5%, according to a stock exch...