This is a significant entrant into a competitive market and a big war chest. Copyrights (ie. sound recordings and musical and literary works) especially are sophisticated assets which are increasingly valuable and sought after.
Digitization and the rise in big data analysis has significantly improved an investor’s capacity to see returns from investment in copyright assets and related royalty streams.
Investors would be advised to consider the factors that impact on global royalty flows and undertake comprehensive analysis on these assets in advance of investing.
The comprehensive analysis has a two-fold outcome – establishing the veracity of the asset authorship/ownership and the factors that impact royalty flows.
How much more valuable would these assets be once the factors that impact on these are removed or fixed?
Historical and pre-digital reporting habits which previously hindered investment return have been non transparent rendering investment high risk. The relentless pace of digitization is forcing previously unseen levels of transparency but also disclosing problems.
Market capacity to deliver comprehensive analysis on these assets (which requires multi-skill-sets) is in short supply.
The Hipgnosis Song Fund (and other funds which will follow) is democratising the investment in music copyrights but this brings risk to the average investor who may not fully understand the complexities of these rights and the related royalty flows which technology has blown up globally.
A new investment scheme has been launched that allows individuals, hedge funds and others to buy a share of the royalties that are paid out every time one of the British rock band’s songs or albums is bought, downloaded, streamed or played on the radio.