On July 8, 1977, the 13-year-old Merck Mercuriadis attended his first big show, Kiss at the Halifax Forum. A couple of older concertgoers struck up a conversation with the young music nerd. Chatting about this, that and Jeff Beck’s Blow by Blow, the guys asked him about the third New York Dolls album.
It was a trick question. “I told them there was no third New York Dolls album,” says Mercuriadis, recalling his rock ‘n’ roll rite of passage on a phone call last week with The Globe and Mail. “They both gave me a big smile and patted me on the back.”
To Mercuriadis, it was a revelatory moment. “I had passed their test,” says the native of Middleton, N.S., who as an adult would end up working with Paul Stanley and Gene Simmons of Kiss. “It gave me a tremendous amount of confidence in terms of what could be possible for the future.”
In the 1970s, arena rock was the future. It’s called classic rock now, but don’t let the ageist handle fool you. It’s still the future, and Mercuriadis is a big part of it.
He’s the face and co-founder (with Chic guitarist Nile Rodgers) of Hipgnosis Songs Fund, a publicly traded British music investment and song management company at the vanguard of music catalogue mega sales.
In the past two weeks alone, Hipgnosis announced it had spent a reported US$150-million for a half-stake in the publishing catalogue of Neil Young, and all rights to the songwriting royalties of Fleetwood Mac’s Lindsey Buckingham and pop singer Shakira.
Mercuriadis and Hipgnosis aren’t alone in gobbling up songs like so many Pac-Man pellets. In December, Universal Music bought Bob Dylan’s catalogue for an estimated US$300-million. Days earlier Stevie Nicks sold an 80-per-cent interest in her songbook to Primary Wave, an independent publishing and talent management company.
The blockbuster deals raise questions: Why are they happening, why is Hipgnosis and its industry-disrupting leader Mercuriadis at the forefront of the craze, and why are decades-old songs costing the most money?
Obviously, Hipgnosis (named after the art studio famous for classic-rock album covers) sees value in the oldies. “These great songs are a part of the fabric of our society,” says Mercuriadis, a chatty convincer who began his fast-track recording industry career in Toronto as an 19-year-old marketing director with the Virgin Records label. “I bought Neil Young’s Harvest as a kid, and I’m still consuming that album today.”
If Mercuriadis is like a lot of music fans, he’s consuming songs through streaming services such as Spotify and Apple Music. Billboard magazine reported there were more than 2.2 trillion audio streams in 2020, which represents a growth of 22 per cent from 2019.
According to Paul Shaver, president of the Canadian Musical Reproduction Rights Agency Ltd., the streaming era has brought a “no borders” mentality to the music industry ecosystem. “We no longer see Latin or K-pop only being consumed in their home markets. And, because of trends like these, music publishing is the new investment commodity.”
As well, streaming has made music incredibly accessible, simultaneously exposing younger fans to classic tracks while supplying the greyer demographic with their nostalgia-driven needs. Streaming drives up music listenership and, in turn, song value. That value can monetized through various royalties and licensing fees when, for example, a song is used in a television commercial.
Will we hear Young’s Old Man in a commercial for a retirement community? Not likely, says Mercuriadis, an artist-championing exec who managed Guns ‘n’ Roses, Elton John, Beyoncé and others after leaving Canada and Virgin. “Neil has very stringent criteria on how his music is used.”
(Young is on record as saying he specifically won’t work with Pepsi, Coca-Cola, Miller Brewing Co., politicians and Anheuser-Busch.)
Mercuriadis, 57, has a soft spot for the music of his youth – he first kissed a girl at the age of 13 to the sound of John’s Tiny Dancer – but Hipgnosis’s stash of about 13,000 songs also includes contemporary titles attached to producers Mark Ronson, Timbaland and Taylor Swift collaborator Jack Antonoff.
“Merck is choosing a nice combination of blue chip older artists and younger artists on the rise,” says Randy Lennox, former head of Universal Music Canada. “That comes with experience. He targets songs and artists with trajectories, and he’s attaching his cart to their horses.”
Classic rock, while not topping charts, is still popular. Which explains why a cover of the Tragically Hip’s Ahead by a Century is featured in Scotiabank television commercial and why a folksy version of Rush’s Closer to the Heart graces an Ontario Tourism “buy local” spot. Nostalgia being catnip to music fans of a certain age and wealth, a recognizable song draws older eyes and ears to ads selling everything from automobiles to investment services.
If we know why publishing companies are buying, why are songwriters selling? The short answer is that they’re getting paid – overpaid, some say – a ton of money. For the classic rock artists in particular, the sales are often a matter of estate planning.
The longer answer has to do with what’s happening in the music industry today. Physical sales of music have been tanking for years, and now, with COVID-19 causing a live music lockdown, touring income has dried up completely. On This Note’s For You, Young sings, “Don’t need no cash, don’t want no money” – but even rock stars have bills to pay.
After Dylan cashed out, a contemporary of his said that he, too, was considering following suit. “I can’t work, and streaming stole my record money,” David Crosby tweeted.
The market for Crosby and others is hot. As the great humorist and freelance investment adviser Will Rodgers might say if he were alive today: Buy classic rock. They ain’t making any more of the stuff.
Find out what’s new on Canadian stages from Globe theatre critic J. Kelly Nestruck in the weekly Nestruck on Theatre newsletter. Sign up today.