Yet to glibly illustrate Merck as a mere music biz big spender doesn\u2019t quite do justice to his evangelistic belief in the value (and future value) of songs. He might be backed by hundreds of millions, he might have acquired catalogues from Benny Blanco<\/a>, The Chainsmokers<\/a>, The-Dream<\/a>, Dave Stewart<\/a> and everyone in between \u2013 but, according to Mercuriadis, there is a wider point behind his relentless thirst for deals.<\/p>\n As the Hipgnosis Songs Fund founder explains below in his five-point manifesto \u2013 aka the things he\u2019d change about the music business tomorrow \u2013 he\u2019s aiming to shake up the very power balance this industry is built on…<\/p>\n There is an imbalance that exists between what is paid to the recorded music side of this industry and what is paid to songwriters; it\u2019s not fair and equitable as it currently stands. In the old days it didn\u2019t matter, because when I started, which was the old days, 90% of signed artists wrote their own songs.<\/p>\n They knew who they were, what they wanted to be, what the album cover should look like, what the stage show should look like. And the job of someone like me [as a manager] was to (a) believe in them and (b) put a strategy in place to bring their ideas to fruition. Well, today, 90% of signed artists are still really talented people, but almost every song you hear on the radio is written, at least in part, by an outside songwriter. If you\u2019re Zara Larsson and you have access to these songwriters, you\u2019re top of the chart.<\/p>\n “the songwriter is not being treated fairly and equitably, and we need to redress that imbalance.”<\/p><\/blockquote>\n If you\u2019re Iggy Azalea, and five years ago you had the biggest song in the world, with Fancy, but now, for whatever reason, you no longer have access to these songwriters, you\u2019re nowhere. Because the song is the currency on which this business trades. And yet the songwriter is not being treated fairly and equitably, and we need to redress that imbalance. Right now, the Jonas Brothers are on tour in America, making millions of dollars, and what the crowd really want to hear from them is a song [they\u2019ve heard] that Ryan Tedder wrote.<\/p>\n I\u2019m not suggesting that Ryan should be getting [more] of the money that the band generates from live, but it highlights the imbalance between what the record company gets and what Ryan gets. It\u2019s important to be clear, this is not about re-dressing the balance between what the artist gets and what the songwriter gets, because, as we know, the artist is on a sliver of what the record company gets anyway. This is about the balance between what is paid for recorded music and what\u2019s paid for the song. That change starts with the CRB ruling increasing songwriters\u2019 share of the pie by 44% [in the US] over the next four years. It should then continue with the Department of Justice dropping the consent decree laws that affect both ASCAP and BMI in the United States, and it should roll on from there.<\/p>\n I want to use what is currently half a billion dollars\u2019 worth of assets, and what will be billions of dollars\u2019 worth of assets acquired by Hipgnosis to, again, change where the songwriter sits in the economic equation, but also be the catalyst for a real Songwriters Guild.<\/p>\n Not what we currently have, because there\u2019s no real advocacy at this moment in time. There isn\u2019t anyone advocating for the songwriter. The three big companies can\u2019t, because they\u2019re owned by big recorded music companies.<\/p>\n The performing rights societies can\u2019t, because they\u2019re bound by the consent decree rule \u2013 and they\u2019re also very cash rich organisations that don\u2019t want to upset the applecart. I want to end up with a scenario similar to the Screenwriters Guild where, on behalf of movie writers, every three years they march into all the studios and say, \u2018Hey, I don\u2019t care if you\u2019ve got Reese Witherspoon or George Clooney to star in this movie; if you don\u2019t get a script, there is no movie. And you\u2019re not going to get a script unless you pay the writers properly.\u2019<\/p>\n “I can\u2019t own all the songs in the world, but I can play a part in making sure all the songwriters in the world benefit.”<\/p><\/blockquote>\n So, every three years, they scream and shout at each other, they call each other names, they threaten to bring production to a standstill, but at the end of the day they figure out a way to pay the writers more money \u2013 and everybody lives happily ever after. Or at least for three more years.<\/p>\n I want the songwriters to be represented in exactly that way. It\u2019s a six or seven-year plan, but I intend Hipgnosis to be the catalyst to make that happen. If you think about what we\u2019ve done, we\u2019ve established songs as an asset class, and an asset class that is now recognised by the most important investment communities in the world as being as good as gold or oil. That\u2019s amazing for Hipgnosis, but it\u2019s amazing for all songwriters. It will benefit everyone.<\/p>\n I can\u2019t own all the songs in the world, but I can play a part in making sure all the songwriters in the world benefit. And that\u2019s where this Songwriters Guild, with real teeth, will come into play.<\/p>\n The system that exists currently [in record deals] is not right. It is basically: we\u2019ll lend you money to build the house, you\u2019ll pay that money back, we\u2019ll still own the house. It doesn\u2019t mean that those companies that fund artists can\u2019t be involved for the long-term, but once the artist has paid for their records and the company that made a capital investment has been able to make a great return, the artist should get the rights back.<\/p>\n There can be long-term distribution deals, there can be longterm licensing deals, but that system of lending the money, getting paid back and then still owning the house, that has to change. I\u2019m a big believer in the value of the major companies and the best of the independent companies out there. Because the one thing as an artist that you\u2019re never going to want to do is create that infrastructure.<\/p>\n “The system that exists currently [in record deals] is not right.”<\/p><\/blockquote>\n Right now, there\u2019s someone working for Universal, Warner or Sony in Brazil who knows who the best DJs, most influential journalists are etc. I\u2019m never going to know those things, so I\u2019m always going to want to be in business with those companies and I\u2019m always going to value the incredible work they do. But, the economics of it, in terms of who ends up owning these assets, needs to change. That\u2019s not to say there can\u2019t be some hybrid, but it can no longer continue as it is. We\u2019re talking about a long hard road towards this, and I would say we haven\u2019t even begun yet.<\/p>\n Because part of the problem, and this informs points 1 and 2, is that it\u2019s very easy for people to live in a paradigm that has existed for 75 or 100 years. You sit there and think you can\u2019t do anything about it, until someone comes along and does do something about it. As regards points one 1 and 2, that\u2019s exactly what I\u2019m doing \u2013 being that catalyst and demonstrating to people that these things are possible. Eventually we\u2019ll get to 3 as well.<\/p>\n If you look at the great British labels of the sixties and seventies, the one thing they had in common is that they identified talent and then went to work with that talent; they would make a capital investment in that talent. But then they would spread that investment across many income streams, so it was not unusual for those labels to manage the artist, to handle merchandise for the artist, to book the live shows and to publish the artist. When they did that, they effectively created a pool [of money].<\/p>\n What I want, going forward, is that if there is going to be a concept of \u2018360\u2019 in today\u2019s [record] business, that concept should be one where all the money from those income streams goes into a [central] pool. The split on that [pool] will favour the record company when the artist is unrecouped. Then, as time goes on, it becomes more even, more like 50\/50, and then the more successful an artist becomes, the more the pendulum swings in their favour.<\/p>\n “I want to revolutionise 360 deals and create fair and equitable payment structures for artists.”<\/p><\/blockquote>\n What exists at the moment is that you sign to a [frontline major] label and they might give you an advance of \u00a3200,000, but you might also have to pay them 20% of your publishing as part of your 360 deal. Then you go out and make a publishing deal for \u00a3500,000. Suddenly you\u2019ve got to give the label \u00a3100,000 [of that publishing money], which is fair enough. But that \u00a3100,000 becomes a profit centre for the [record company]; you\u2019ve given them \u00a3100,000, but you\u2019re still \u00a3200,000 unrecouped [on your record deal], not \u00a3100,000 unrecouped.<\/p>\n So I want to revolutionise 360 deals and create fair and equitable payment structures for artists whereby the more successful you get, the bigger share of the pie you get.<\/p>\n The role of the manager needs to be reconsidered, particularly by the legal community, which seems to want to marginalise it. One of the key issues is that managers should get paid for the work that they do in perpetuity.<\/p>\n That\u2019s not to say they should get paid on an entire contract, but whichever songs or albums that come out during their tenure as manager, they should get paid in perpetuity. It\u2019s no different to a producer.<\/p>\n Your manager could be someone that you spend 10 hours a day with, and a lawyer\u2019s telling you, \u2018Don\u2019t pay this person.\u2019 Whereas you could go into a studio tomorrow with someone who you\u2019ve only met once and who you\u2019re never going to work with again, and you would owe them their royalty forever.<\/p>\n “The role of the manager needs to be reconsidered.”<\/p><\/blockquote>\n Why should a manager be expected to put their life, their heart and soul into an artist and not be rewarded for it in their later days if they\u2019re successful \u2013 when [the opposite is true] for a record company, publisher or producer? Managers play an incredibly important role \u2013 the good ones. There are plenty of bad ones, I\u2019m not speaking on their behalf; I\u2019m speaking for the ones that can quite rightly be credited with a huge part of an artist\u2019s success, who are prepared to make other people believe in their acts, who are committed to their artists and who put the time and the effort in to do great work.<\/p>\n As things stand, they\u2019re far too easily cut out of the picture.<\/p>\n MBUK is available via an annual subscription through here.<\/em><\/strong><\/a><\/span><\/p>\n
\n1. Redress Where Songwriters Sit In The Economic Equation<\/h6>\n
\n2. Create A Truly Powerful Songwriters Guild<\/h6>\n
\n3. Artists Should Get Their Masters Back<\/h6>\n
\n4. Revolutionise ‘360’<\/h6>\n
\n5. Value Managers Properly And Fairly<\/h6>\n
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\n![](\"https:\/\/www.musicbusinessworldwide.com\/files\/2019\/10\/Screen-Shot-2019-10-07-at-18.53.17-80x105.png\")
<\/i><\/a><\/a><\/figure>This article originally appeared in the latest (Q3 2019) issue of MBW\u2019s premium quarterly publication, Music Business UK (pictured), which is out now.<\/a>
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