Speaker 1: Welcome, Welcome, Welcome to Canadian Music Week. In the Bob
Speaker 1: Left Sets the podcast. My guest today is Murk Peculiadest,
Speaker 1: who runs the hottest company in music today, the Hypnosis
Speaker 1: Songs Fun Mark. How's it going, Bob, It's a pleasure
Speaker 1: to be with you, mate for a long time. Okay,
Speaker 1: So you're constantly signing new acts, new catalogs. Do you
Speaker 1: reach out to people or do they approach you? Um,
Speaker 1: it's a combination of both. I would say that of
Speaker 1: the deals that we make are you know, people that
Speaker 1: who's music that I'm listening to, and when I'm listening
Speaker 1: to that music, it makes me reach out and turn
Speaker 1: around and tell people that, you know, I admire the
Speaker 1: work that they're doing and that I would like them
Speaker 1: to be a part of Hypnosis. But it's it's generally
Speaker 1: a long courtship. I I generally build the relationship with someone.
Speaker 1: In my case there you know, many of these relationships
Speaker 1: are relationships that have been built over ten, twenty thirty
Speaker 1: forty years at the time that I've been in this business.
Speaker 1: So you know, it's it's it's there's a bit of
Speaker 1: a love affair that's been going on for a long
Speaker 1: period of time generally before I approach anybody. But then,
Speaker 1: of course, on the back of success, you have a
Speaker 1: lot of people that pick up the telephone and want
Speaker 1: to be a part of what you're doing as well. Okay,
Speaker 1: let's talk about a couple of specific cases. You recently
Speaker 1: signed the Red Hot Chili Peppers. How did that come
Speaker 1: together so that when I can't talk about Bob and
Speaker 1: I apologize for that, But that's a deal that uh
Speaker 1: under n d A and that is is a deal
Speaker 1: that is is not something that we can talk about publicly,
Speaker 1: and I apologize. I should have said that at the
Speaker 1: very beginning. Okay, is there a deal that would be
Speaker 1: representative that you can talk about relatively recent? Sure, we
Speaker 1: can talk about Neil Young, we can talk about Lindsay Buckingham,
Speaker 1: we can talk about and let's talk about Shakira. Okay,
Speaker 1: let's start with Neil Young. How did you what was
Speaker 1: the entreaty with Neil Young? Did you reach out to
Speaker 1: him or do you reach out to you? Well, you know,
Speaker 1: I've had a relationship with Neil for about twenty five years,
Speaker 1: maybe longer. Um I was very close with his manager,
Speaker 1: Elliott Roberts, sadly who's no longer with us anymore. And
Speaker 1: Elliott was a bit of a mentor to me. We were,
Speaker 1: you know, we had a very similar approach to the
Speaker 1: way we did things, always integrity, lead um and Frank Geronda,
Speaker 1: who was Elliott's lieutenant for many many years and is
Speaker 1: now Neil's manager, was also part of of of that
Speaker 1: circle of of of friends around Neil, and it was
Speaker 1: there therefore very easy. I mean. The funny thing about
Speaker 1: the Neil deal was that when I first started to
Speaker 1: see investors, uh four or five years ago to educate
Speaker 1: them on the idea of songs as an asset class um,
Speaker 1: and I would explain to them, you know, the way
Speaker 1: that certain artists cared about music, and that it would
Speaker 1: be you know, the kind of equivalent of uh, you know,
Speaker 1: the songs being metaphorical children, uh, if you like. And
Speaker 1: therefore these were very emotional transactions that uh the artists
Speaker 1: would find uh, you know, difficult, and that they would
Speaker 1: want to make sure that they were putting those songs
Speaker 1: into the hands of the right people. I always used
Speaker 1: Neil as the example. I had over a hundred and
Speaker 1: seventy seven meetings with investors in the first twelve or
Speaker 1: thirteen months of of of hypnosis as an idea, and
Speaker 1: in every one of those meetings, Neil was always the
Speaker 1: example of the sort of artists that would do business
Speaker 1: with me as opposed to doing business with other people,
Speaker 1: because they would know that I cared about the music.
Speaker 1: They would know that I amderstood that these were emotional transactions,
Speaker 1: and that they looked upon these songs as metaphorical children
Speaker 1: that they've given birth to in the form of songs,
Speaker 1: and that they would want to know that those songs
Speaker 1: were going into the right hands. And you know, I've
Speaker 1: made my reputation and my success with artists and songwriters
Speaker 1: and producers as opposed to at the expense of artists
Speaker 1: and songwriters and producers, and therefore I have a pretty
Speaker 1: good name in the artistic community. They know that I care,
Speaker 1: they know that I'm prepared to fight on behalf of
Speaker 1: the songwriters and the artists and the producers. And they
Speaker 1: also know that, you know, perhaps most importantly, that while
Speaker 1: I'll always want to, you know, enhance the earnings and
Speaker 1: enhance their reputation, at the same time, I would never
Speaker 1: do that at the cost of protecting their legacy. The
Speaker 1: legacy is always the most important thing. And protecting the
Speaker 1: value of the songs and protecting how the songs are
Speaker 1: used as paramount. That's that's inherent. You know, when you
Speaker 1: look at someone like you young, you know, on the
Speaker 1: one hand, the songs are as valuable as they are
Speaker 1: because Neil is an incredible artist and a wonderful songwriter.
Speaker 1: But equally well inherent in that is the way that
Speaker 1: he's conducted himself over the past sixty years. The reason
Speaker 1: why people like you and I look up to Neil
Speaker 1: is because of that conduct. And I've read you write
Speaker 1: about Neil. Uh, you know, read what you've written about
Speaker 1: Neil many many times over the decades, and you have
Speaker 1: a similar passion to mind most of the time. And
Speaker 1: that's partly based on the fact that Neil is a
Speaker 1: guy that we can believe in. Okay, but walk us
Speaker 1: through the process of making a deal with Neil. Did
Speaker 1: you hear that he wanted to sell or did you
Speaker 1: approach Frank and tell him, Hey, I think this is
Speaker 1: an opportunity for you here. It's a it's a courtship
Speaker 1: that that has existed from the time that hypnosis started.
Speaker 1: Um And of course you know sometimes the artist will
Speaker 1: get to a place where they be it's the right
Speaker 1: time for them to make a deal like this, and
Speaker 1: other times it will never be the right time to
Speaker 1: to to to make a deal. In Neil's case, UM
Speaker 1: probably last October he decided that this was the right
Speaker 1: time for him to make a deal and to uh,
Speaker 1: you know, put the songs and let me just stop
Speaker 1: you for a second. That was totally independent of you
Speaker 1: talking to him. He basically woke up in bed one
Speaker 1: day and said today's the day, okay, correct continually and
Speaker 1: and and instructed his team that it was it was
Speaker 1: time to find uh, you know, the right people to
Speaker 1: do to make a deal with UM. So from that
Speaker 1: point it became very easy. You know, the lawyer and
Speaker 1: Frank reached out to me. I told them what I
Speaker 1: was prepared to do, literally within a matter of seconds.
Speaker 1: And ultimately, and you know, when you you have a
Speaker 1: career like Nils and and and you know you've got
Speaker 1: sixty years almost worth of incredible songs You've got obviously, uh,
Speaker 1: you know understand what the how the marketplace feels about
Speaker 1: your your catalog and your songs. But I was very
Speaker 1: confident that what I proposed to them right from the
Speaker 1: get go would prevail. And indeed it did, and the
Speaker 1: deal was done within about thirty days. Okay, so you're
Speaker 1: saying that within a matter of seconds you had a
Speaker 1: number that you could give them. What it wasn't wasn't
Speaker 1: even minutes, it was seconds. So how did you come
Speaker 1: up with that number? Because you know, as you may know,
Speaker 1: you know, the sort of general discussion around catalog sales
Speaker 1: is based on a multiple um. So for me to
Speaker 1: be able to express the multiple that I was prepared
Speaker 1: to pay for Neil just took a matter of seconds.
Speaker 1: You know. By that point, I was already you know,
Speaker 1: the better part of two billion dollars invested. I knew
Speaker 1: what these catalogs were trading ends for. And you know,
Speaker 1: the one thing that I'm never gonna do. And it
Speaker 1: doesn't matter whether you're as famous as Neil Young or
Speaker 1: you know, whether you're you're you're someone that you know,
Speaker 1: maybe as a decade into your your career, your life,
Speaker 1: I'm never gonna mess a great creator around. You know,
Speaker 1: my my modus opper endi is too. And this has
Speaker 1: been this way throughout my career. You know, if I
Speaker 1: believe that I should pay a dollar I'm not going
Speaker 1: to offer ninety cents and then let you talk me
Speaker 1: up to a dollar. I'm going to offer a dollar,
Speaker 1: and then if you want more, I'm gonna justify why
Speaker 1: I believe it's a dollar. So it's it's you know.
Speaker 1: My My approach is always to be as real as
Speaker 1: I possibly can be, and then if there's effort and
Speaker 1: time that's required to then explain and to justify why
Speaker 1: that's the number, and then I'm prepared to do it.
Speaker 1: But I don't. I don't try to nickel and dine people.
Speaker 1: I think that, you know, one of the things that
Speaker 1: I set out to do when I started hypnosis, there
Speaker 1: were three three goals. The first goal was to establish
Speaker 1: songs as an asset class that could rival golden oil um.
Speaker 1: The second was to use the leverage of hypnosis to
Speaker 1: then help to change where the songwriter sits in the
Speaker 1: economic equation, because despite the fact that they're delivering the
Speaker 1: most important component to an artist having success, they are
Speaker 1: the low man or woman on the in the economic equation.
Speaker 1: And then the third goal was to destroy the concept
Speaker 1: of traditional publishing, where someone gives you a check but
Speaker 1: doesn't really add much value beyond that and to replace
Speaker 1: it with song management. As as an artist manager, you know,
Speaker 1: I manage people with responsibility because I understand that. You know,
Speaker 1: first of all, I can't play the guitar, I can't
Speaker 1: sing a song, I can't write a song. The only
Speaker 1: thing that gives me a seat at the table with
Speaker 1: these great people is that I take my responsibility seriously
Speaker 1: and I think that that same responsibility should be extended
Speaker 1: to these great songs that make the world go round.
Speaker 1: But that's not what traditional publishing is. Let's get let's
Speaker 1: get downe in the nuts and bolts. So if you
Speaker 1: could make a deal or come up with a number
Speaker 1: that quickly. Did they tell you how much they were
Speaker 1: making from their catalog every year or is this something
Speaker 1: where you investigate all the available acts yourself and see
Speaker 1: how much they're making. So basically everything that we buy
Speaker 1: is bought on verified data. So the artist will supply
Speaker 1: the last three years of their publishing statements, the last
Speaker 1: three years of their p r O statements, the last
Speaker 1: three years of their you know, neighboring rights, sound exchange masters,
Speaker 1: depending on what it is, that's that's that's on the
Speaker 1: table um. But in the case of Neil, what I
Speaker 1: gave immediately was the multiple that I was prepared to
Speaker 1: pay for it. They then supplied me with that verified
Speaker 1: aid to within a couple of days, they had the
Speaker 1: formal offer back with that number, that yearly number times
Speaker 1: the multiple that I was willing to pay, and we
Speaker 1: were there very very quickly after that. What is the
Speaker 1: multiple that I can't talk about I'm under n d A.
Speaker 1: But but what I can, But in general, what I
Speaker 1: can tell you is this is that I've now invested
Speaker 1: over two billion dollars, about two point two billion dollars
Speaker 1: at an average weighted multiple of fifteen. So I've I've
Speaker 1: bought some catalogs for a lot more than a fifteen
Speaker 1: times multiple, and I've bought some catalogs for a lot
Speaker 1: less than a fifteen times multiple. But the average weighted
Speaker 1: multiple across the two billion invested is fifteen times. Okay,
Speaker 1: let's assume you pay fifteen times for your purposes. How
Speaker 1: long a period of time do you calculate it will
Speaker 1: take for you to recoup your investment. Well, it's probably
Speaker 1: something that's closer to ten years time rather than fifteen
Speaker 1: years time, because, of course, the context for all of
Speaker 1: this is the explosive growth of streaming where when we started,
Speaker 1: you know, just over three years ago, we had thirty
Speaker 1: million paid subscribers to music streaming services. Today we have
Speaker 1: four dred and fifty million paid subscribers. Then in addition
Speaker 1: to that growth, you know, you've got uh things like
Speaker 1: legislation that's taken place all over the world, such as
Speaker 1: the Copyright Board ruling in the United States that has
Speaker 1: given the songwriter a forty four greater share of the
Speaker 1: pie incrementally between two thousand and nineteen and the end
Speaker 1: of two thousand and twenty two. Now that's been appealed
Speaker 1: by Spotify and by Amazon, but not by Apple, and
Speaker 1: we believe that that increase will prevail. So by the
Speaker 1: time you get to the end of a dollar's worth
Speaker 1: of income that you bought will be worth a dollar
Speaker 1: forty four if it was predictable, reliable income. And then
Speaker 1: we go to work actively managing the songs better than
Speaker 1: they've been actively managed for a long time, because you know,
Speaker 1: the big publishing houses that administer many of these songs
Speaker 1: when we buy them, they have as many as twenty
Speaker 1: thousand songs per person. So as good as they are
Speaker 1: what they do, they don't have the ability to be
Speaker 1: able to affect the success of twenty thousand songs per person.
Speaker 1: They just don't have the bandwidth to do it. We
Speaker 1: operate on a basis of five hundred plus songs per
Speaker 1: person UM, never more than a thousand songs per person.
Speaker 1: We're adding all the time, so that ratio of between
Speaker 1: five hundred and a thousand songs changes depending on where
Speaker 1: we are between what we've acquired recently. So today we
Speaker 1: have acquired a hundred songs from Andrew Watt um Grammy,
Speaker 1: a winning Producer of the Year UM. But we're adding
Speaker 1: more people to manage those songs and manage the songs
Speaker 1: that are in the catalog on a glue basis, So
Speaker 1: it fluctuates between having five hundred and a thousand songs
Speaker 1: per person depending on where we are in that cycle. Ideally,
Speaker 1: as we get to the point where there's a steady state,
Speaker 1: it's five hundred songs per person as opposed to twenty
Speaker 1: songs per person, and those people are very focused on
Speaker 1: putting the songs in movies, TV commercials, video games, getting
Speaker 1: new artists to cover those songs, getting new songwriters to
Speaker 1: interpolate them, making sure that they're on TikTok, making sure
Speaker 1: that they're on Peloton, that they're on the right playlists, etcetera.
Speaker 1: So by the time you add all of those ratchets,
Speaker 1: you know, what is a fifteen times multiple probably becomes
Speaker 1: something less than a ten times multiple if you're doing
Speaker 1: your job properly. Okay, let's just use Neil Young as
Speaker 1: an example. So a lot of these older artists, Neil, Paul, Simon,
Speaker 1: Dylan have sold in. The conventional wisdom is they're doing
Speaker 1: it for tax reasons. In this particular case, you make
Speaker 1: it deal with all of these very highly well known,
Speaker 1: respected artists, is part of the negotiation where and how
Speaker 1: they get paid for tax reasons. Well, certainly they will
Speaker 1: have all had very very good independent tax planning. So
Speaker 1: you know, you you you are probably aware that under
Speaker 1: the Trump administration previously that at the mid terms last
Speaker 1: time around, Trump tried to get rid of, uh the
Speaker 1: the capital gains tax treatment for songwriters. Bart Harbison at
Speaker 1: the n s a I and Nashville stepped in with
Speaker 1: a very very heavy lobby and they were able to
Speaker 1: turn that around and keep the capital gains tax in place.
Speaker 1: We've now got what I think we all believe is
Speaker 1: a far, far better president and Joe Biden. But Joe
Speaker 1: Biden is also intent on, uh, you know, putting a
Speaker 1: tax program in place that will likely get rid of
Speaker 1: capital gains tax for songwriters. Whether that happens this year,
Speaker 1: whether it happens next year, it's certainly something on the agenda.
Speaker 1: I've been part of many, many discussions with the n
Speaker 1: s a I and various congress people around the country
Speaker 1: explaining to them number one that songwriters deserve capital gains
Speaker 1: treatment and number two that even if we just look
Speaker 1: at hypnosis, hypnosis has probably paid about five dred to
Speaker 1: six hundred million dollars into the treasury based on songwriters
Speaker 1: getting capital gains treatment. If that capital gains treatment were
Speaker 1: to go away, many many songwriters would have to think
Speaker 1: twice about whether or not they sold their songs. Okay,
Speaker 1: but specifically that would be the general leandscape. Do you
Speaker 1: just make a deal and say I'll pay you X
Speaker 1: for this, let's just use a hundred million dollars is
Speaker 1: around number? Or do they say we want you know, like,
Speaker 1: is it like a baseball player where they say, well,
Speaker 1: I want to be paid in Canada or I want
Speaker 1: to be paid. Here are those factors that Hypnosis is
Speaker 1: involved in at all, Where the money is generated, from
Speaker 1: where it goes. We're not involved in the factors because
Speaker 1: of course we're not advisors to the artist or the
Speaker 1: songwriter or the producer. But if the songwriter or the
Speaker 1: artist or the producer has a legitimate tax plan with
Speaker 1: their advisors, as long as it's a legitimate tax plan,
Speaker 1: we will do our very very best to cooperate and
Speaker 1: make the transaction and the sale of the catalog is
Speaker 1: smooth and seamless as as as the songwriter needs it
Speaker 1: to be. Um, and that's something that you know, the
Speaker 1: music business that you and I came into wasn't such
Speaker 1: a sophisticated place. I'm happy to say it's becoming more
Speaker 1: sophisticated on behalf of artists and songwriters and producers every day.
Speaker 1: So you know, there are many many good business managers
Speaker 1: and lawyers out there that have looked after clients well,
Speaker 1: certainly in the hundred and fifty odd transactions that we've
Speaker 1: made today. Okay, an iconic artist doesn't have that much
Speaker 1: runway left. Paul Simon talks about not touring anymore. He's
Speaker 1: either eighty or going to be eighty this year. Now
Speaker 1: you say, whatever the multiple is, let's just assume it's
Speaker 1: less than twenty, and you predict that you'll make the
Speaker 1: money back in ten. What is the pitch to someone
Speaker 1: who's in their thirties like Andrew Watt. So that's really
Speaker 1: about de risking that person's future. You know that if
Speaker 1: you look at Andrew Watt specifically, Andrew Watt is not
Speaker 1: only an incredible songwriter and perhaps the most important young
Speaker 1: songwriter in the world today. As I mentioned before, you know,
Speaker 1: the Grammy Award winning Producer of the Year, you know,
Speaker 1: killing it with du Olyppa, with Miley Cyrus, with Post Malone,
Speaker 1: with Ozzy Osborne. Because he's a guy that that that
Speaker 1: you know, works on music that he loves. He just
Speaker 1: doesn't just work on on on whatever is the flavor
Speaker 1: of the moment today. Um. And you know, in Andrew's case,
Speaker 1: he was a guy that was very very bright, that
Speaker 1: made an admin deal, didn't take any money for it,
Speaker 1: and just went to work and relied on himself to
Speaker 1: uh succeed in order to put money in his pocket
Speaker 1: and to pay the rent and you know, put food
Speaker 1: on his table and and and everything else that goes
Speaker 1: with it. So for someone like Andrew now at the
Speaker 1: age of thirty, his future is entirely de risked. What
Speaker 1: he works on tomorrow is his own choice because he's
Speaker 1: got enough money now to live for the rest of
Speaker 1: his life. And that's an important, you know, point of
Speaker 1: freedom for any young creator. Um so you know, it's
Speaker 1: it's it's you know you is you I think are
Speaker 1: getting to it. You know, people have different motivations for
Speaker 1: for for selling, and in his case, it's de risking
Speaker 1: his future and creating a relationship with a company like Hypnosis,
Speaker 1: because when we make these transactions, that's the beginning of
Speaker 1: the relationship. That's not the sum total of the relationship.
Speaker 1: Every one of the hundred and fifty deals that we've made,
Speaker 1: these people are now part of the Hypnosis family. They
Speaker 1: work with the eighty three people that I have around
Speaker 1: the world, and we're doing great things together. So for
Speaker 1: someone like Andrew, the prime motivation is that he's now
Speaker 1: de risked his future. But the second part of his
Speaker 1: motivation is that he now has a partner to help
Speaker 1: execute many of the things along with Scooter Braun as
Speaker 1: his manager, to execute many of the things that that
Speaker 1: are important to him in his growth as as both
Speaker 1: an artist and a producer and a songwriter. Okay, you
Speaker 1: say they're partners. What is the potential upside of an
Speaker 1: act that makes a deal with you? So every artist,
Speaker 1: without whether they ask for it or whether they don't,
Speaker 1: are going to get a minimum of two bonuses in
Speaker 1: our deals. And the reason why I have those two
Speaker 1: bonuses at the end of year three and at the
Speaker 1: end of year four is because I don't ever want
Speaker 1: anyone to have negative emotion for making a deal with me.
Speaker 1: So I'm very clear with people from the get go
Speaker 1: that I'm doing this. On the one part, you know,
Speaker 1: the motive, the motive of the fund is obviously to
Speaker 1: make money for our shareholders and for ourselves. The ulterior
Speaker 1: motive is to change where the songwriter sits in the
Speaker 1: economic equation. But as we work towards the ulterior motive,
Speaker 1: you know, the motive is something that is coming together
Speaker 1: very very quickly. And if I'm right, and streaming grows
Speaker 1: from four under the fifty million people inside of the
Speaker 1: next decade to two billion people around the world. If
Speaker 1: I'm right, in the copyright Board ruling stays in place,
Speaker 1: and there's a forty four percent increase if I'm right,
Speaker 1: and we can actively manage our catalogs better than where
Speaker 1: they came from before, and there's that growth both from
Speaker 1: a capital perspective and from a revenue perspective. I want
Speaker 1: the songwriter to participate paid in that, so I build
Speaker 1: in bonuses at the end of year three and at
Speaker 1: the end of year four that are as much as
Speaker 1: of what the purchase price was in the first place. Okay,
Speaker 1: what happens after year four? After year four, then it
Speaker 1: depends on what you know. That's a standard practice that
Speaker 1: I have for every deal that I make. If someone
Speaker 1: has negotiated something better than that after year four, then
Speaker 1: that's a different story. Okay, So some people this is
Speaker 1: a negotiable point. It's a negotiable point because, as I say,
Speaker 1: I want people to be able to participate in the
Speaker 1: in the upside um. And uh, I'd never wanted to
Speaker 1: be any negative emotion in someone, you know, I never
Speaker 1: want someone to knock on the door and say, dude,
Speaker 1: you were smarter than I was, Which is why I'm
Speaker 1: very clear with people from the get go what my
Speaker 1: thoughts are on where this business is going. Okay, now
Speaker 1: you're the big Juna, the Primary Wave is buying catalogs,
Speaker 1: Roundhill is buying catalogs. Now we saw Universal and Sony.
Speaker 1: Does everyone ultimately pay the same price or is it
Speaker 1: a bidding war? How does an act ultimately decide? Well,
Speaker 1: seventy of the of the transactions that we make are
Speaker 1: off market transactions that never involve you know, Primary Wave
Speaker 1: or round Hill or or you know any of these
Speaker 1: other companies that are are are out there. Obviously, Universal
Speaker 1: and Warner and Sony have made some deals of their own,
Speaker 1: but they're not particularly active. You can understand why if
Speaker 1: a Bob Dylan were available on the market, why Universal
Speaker 1: would do that, whereas for the most part they're not buyers.
Speaker 1: You can understand why Sony would make a deal like
Speaker 1: Paul Simon, where for the most part they're not buyers. Uh.
Speaker 1: You know, Lend Blevotnik has Tempo as a fund within Warners,
Speaker 1: But in general they seem to be buying only catalogs
Speaker 1: where they have a first or matching right on having
Speaker 1: signed an artist early enough to be able to have
Speaker 1: that built into the contract. But I I don't fear
Speaker 1: the competition in the same way that many of my
Speaker 1: competitors feel the competition because I rely on the relationship
Speaker 1: that I have with artists in the community and songwriters
Speaker 1: in the community and producers in the community that I
Speaker 1: believe in and that in turn believe in me, and
Speaker 1: that puts me in a situation where I don't have
Speaker 1: to compete, as I say, of the time and the
Speaker 1: thirty percent of the time where I am competing, if
Speaker 1: something special comes along. You know, we have people like
Speaker 1: Richie Samborra from Bon Jovi or the Risive from the
Speaker 1: Wood Tang Clan that are you know, on public record
Speaker 1: as having sold to us for less than what they
Speaker 1: were offered by competitors, because the material difference is not
Speaker 1: the size of the check, but the quality of the
Speaker 1: people that you're you know, putting your metaphorical children into
Speaker 1: the hands of you know, where I'm a I'm a
Speaker 1: good surrogate parent when it comes to music, because I care.
Speaker 1: It's not just about the money for me, It's about
Speaker 1: doing what's right for the music. And what I've certainly
Speaker 1: discovered in the almost forty years that I've been doing
Speaker 1: this is doing the right thing. Money comes to you.
Speaker 1: If you do something based on money, sometimes you'll find
Speaker 1: it very, very hard to to have that money coming
Speaker 1: to you. So you know I'm I'm someone that is
Speaker 1: always making decisions based on what's in the best interest
Speaker 1: of the music. Um. And then I have the trust
Speaker 1: in the surrender to the good man above that the
Speaker 1: money will find us. Okay, in the case of Paul
Speaker 1: Simon and Bob Dylan, did you make a bid on
Speaker 1: those catalogs on Paul Simon? No? UM On Bob Dylan,
Speaker 1: I'm under n d A. So I have to be
Speaker 1: careful about what I say, but I will say that. UM.
Speaker 1: You know, Jeff Rosen, who looks after Bob Dylan's publishing,
Speaker 1: is arguably the most underrated person in our business. He's
Speaker 1: done an unbelievable job for Bob over the years. Bob
Speaker 1: obviously has a level of faith and trust in him
Speaker 1: to allow him to execute that job. Was sometimes many
Speaker 1: artists find that difficult to do. So I I pursued
Speaker 1: Jeff and threw him Bob for the better part of
Speaker 1: eighteen months or two years to make a deal. And
Speaker 1: and uh I believe that the only discussions that he
Speaker 1: ultimately had were with Hypnosis and Universal and uh I
Speaker 1: think that the deal that he was able to make
Speaker 1: was a deal that only a company that's worth you know,
Speaker 1: thirty three and a half billion euros to fifty billion
Speaker 1: dollars could have made. Okay, do you think you helped
Speaker 1: incentivize Bob to sell or was Bob the kicking the
Speaker 1: tires on selling when you get in the picture eighteen
Speaker 1: months ago? Now, you know, I worked very hard to
Speaker 1: get uh. You know, when I talk about establishing songs
Speaker 1: as an asset class, inherent in that is that I
Speaker 1: believe that music has a value on behalf of artists
Speaker 1: and songwriters and producers, that everyone is known all along,
Speaker 1: but that the major companies and other people like Primary
Speaker 1: Waves who've been buying and selling catalogs for a long
Speaker 1: time didn't want to fully acknowledge. And I was very
Speaker 1: happy to fully acknowledge what the true value of of
Speaker 1: of of of these incredible songs are because it's in
Speaker 1: the context of explosive streaming growth and all of those
Speaker 1: other levers that I talked about. So, you know, it's
Speaker 1: very very important on the part of Hypnosis to truly
Speaker 1: recognize the value of these songs. To make sure, you know,
Speaker 1: nine point nine percent of our deals out of the
Speaker 1: hundred and fifty deals that we made A hundred and
Speaker 1: forty eight of them are directly with the songwriter, the artist,
Speaker 1: or the producer. There are only two deals that that
Speaker 1: were you know, a collection of songs that were owned
Speaker 1: by Cobalt, for example, that we've made separate and apart
Speaker 1: from that, all of our deals are made directly with
Speaker 1: the artist and the songwriter and producer because I want
Speaker 1: them to be acknowledged and I want them to be
Speaker 1: put in a position where they are their their futures
Speaker 1: de risked. Whether you're a thirty year old Andrew Watt
Speaker 1: or whether you're a seventy five year old Neil Young,
Speaker 1: I want you to be the beneficiary of of of
Speaker 1: of of the deal, not some corporation. And in doing that,
Speaker 1: I've truly do you ever talk to somebody and say
Speaker 1: you ever talk to somebody say I don't think you
Speaker 1: should sell. I tell people that almost in every instance,
Speaker 1: that I don't think that they should sell, and I
Speaker 1: tell them in exactly why I don't think that they
Speaker 1: should sell. But at the same time, I also tell
Speaker 1: them why, if they're at that place in their life
Speaker 1: where they want to sell, why I'm the right person
Speaker 1: to sell to. So you know, because you know, as
Speaker 1: you know, you can take a piece of real estate,
Speaker 1: whether it's you know, anywhere in the world London, Los Angeles,
Speaker 1: you know, and you know New York, Miami where I
Speaker 1: am at the moment, and you know, you could say
Speaker 1: to someone, look, you know, you've got to hold on
Speaker 1: to that property because twenty years from now that's going
Speaker 1: to be you know, it's something really really special, even
Speaker 1: relative to where it is right now. And of course,
Speaker 1: if if you don't have twenty years, what's the point,
Speaker 1: right It's it's so if someone's at a point in
Speaker 1: their life where they're ready to sell, then I'm the
Speaker 1: right person to sell to. If if if your music
Speaker 1: is something that I care about, then I'm the right
Speaker 1: person to sell to. If your if your music is
Speaker 1: not something that I care about, then there's a lot
Speaker 1: of other people out there. Okay, you only a hundred
Speaker 1: percent of the catalogs you buy. Now, there are there
Speaker 1: are instances where we've bought off interest of the overall catalogs.
Speaker 1: So you know, we would never go in and pick,
Speaker 1: you know, fifty songs out of a hundred. It would
Speaker 1: be buying a half interest in all one hundred songs.
Speaker 1: As an example. Um, so there are instances, you know,
Speaker 1: I would say probably out of the hundred and fifty
Speaker 1: catalogs that we own, a hundred and forty five of
Speaker 1: them are owned, and there are probably five of them
Speaker 1: where we own somewhere between fifty and seventy and in
Speaker 1: those five, and this is a minor part of your portfolio,
Speaker 1: do you have an option to buy the rest of
Speaker 1: it or is it left totally open? Correct? No, we
Speaker 1: have an option to buy the rest of it. And
Speaker 1: most of the deals that we make, even when we're
Speaker 1: buying a hundred percent of a songwriter's catalog, if there's
Speaker 1: someone that that is young and has a future, like
Speaker 1: Andrew Rott as an example, then we'll have a first
Speaker 1: and matching right on their next catalog as well. Okay,
Speaker 1: so let's soon I make a deal. You've established your
Speaker 1: bona fides. But theoretically, and I certainly hope this doesn't happen,
Speaker 1: you could die tonight, Okay, and as so could I.
Speaker 1: Are there chemian clauses or the ability to buy back
Speaker 1: or can the catalogs be transferred freely after Hypnosis purchases them? No,
Speaker 1: there are, there are There are no key man clauses
Speaker 1: and there are no abilities to buy back. But I
Speaker 1: have probably relative to other you know what, I don't
Speaker 1: allow us to be called a publishing company, where a
Speaker 1: song management company, but relative to say, companies that are
Speaker 1: called publishing companies, we probably have a higher level of
Speaker 1: people in position marketing these songs and protecting these songs
Speaker 1: than any other company in the world, including Universal Warner
Speaker 1: and Sony because the sort of executives that we have,
Speaker 1: whether it's Amy Thompson who's the chief catalog officer, or
Speaker 1: Ted Cockle who's the president, you know, these are people
Speaker 1: that are generally reserved for recorded music roles where the
Speaker 1: record company is getting the lion's share of the money,
Speaker 1: where the economics allow them to spend this kind of
Speaker 1: money on on on executives. In most publishing companies, the
Speaker 1: money is being spent on A and R executives rather
Speaker 1: than marketing people. So I've put in an incredible network
Speaker 1: of eight three plus people now that as I say,
Speaker 1: include people like Amy Thompson, Ted Cockle, Kenny McPherson, Richard
Speaker 1: Rowe that are real artist people that understand and love
Speaker 1: the music as much as I do, and that are
Speaker 1: there to to ensure that the artists and the songwriter
Speaker 1: are protected. Um, in the case that I do get
Speaker 1: hit by that proverbial bus and I'm no longer there tomorrow.
Speaker 1: And my children, who have grown up with this music
Speaker 1: and who have grown up with these artists all of
Speaker 1: their lives, are also a part of the company, and
Speaker 1: they know what my standards are, UM, and adhere to
Speaker 1: those as well. So it's it's there's probably if you know,
Speaker 1: if you'd asked me this question two years ago, UM,
Speaker 1: that was a real issue, right because obviously I hadn't
Speaker 1: made the company exciting enough yet at that point to
Speaker 1: be able to track people like Ted or Amy or
Speaker 1: Kenny or whoever it might be. Now at this point,
Speaker 1: you know, we're about to start our fourth year. UM.
Speaker 1: You know, as you very nicely said, this is the
Speaker 1: most exciting company and music perhaps today, and therefore there's
Speaker 1: no shortage of quality people that are prepared to follow
Speaker 1: in my footsteps and protect the artist if necessary. Okay,
Speaker 1: now one for you dressed earlier. I want to expand
Speaker 1: most of the money is in streaming. There's a dollar
Speaker 1: in streaming dollar of income comes in. Although Spotify is
Speaker 1: being beaten up, we all know, that's not really what's
Speaker 1: going on. They have to stay in business. They're taking
Speaker 1: approximately thirty Most people in the artist community feel of
Speaker 1: the remaining seventy cents, let's call it that the songwriter
Speaker 1: got a raw deal. Now we also know that these
Speaker 1: major at this point only three companies also have a
Speaker 1: huge footprint in songwriting and therefore, on some level they
Speaker 1: don't care where the money comes from. Is there any
Speaker 1: chance that the percentage will grow? You know, you talk
Speaker 1: about the legal with one for four, but as we
Speaker 1: go down, what's an appropriate amount of a streaming dollar
Speaker 1: that should go to the songwriter and how do we
Speaker 1: get there? Yeah, there's no question that the songwriters share
Speaker 1: of the income is going to grow. And you know,
Speaker 1: the business that you and I came into, both as
Speaker 1: fans and then as professionals was one that you know,
Speaker 1: I I affectionately referred to as the post Beatles paradigm,
Speaker 1: right where ninety percent of the artists that we would
Speaker 1: sign and work on were people that, you know, we're
Speaker 1: self contained. They you know, had a good idea of
Speaker 1: who they were, who they might become. They wrote their
Speaker 1: own songs, they knew what their album covers should look
Speaker 1: like what their stage show should look like. And the
Speaker 1: job of someone like you or I was to a
Speaker 1: believe in them and be to put a plan in
Speaker 1: place to bring their ideas to fruition and to bring
Speaker 1: them success make other people believe in them. Today the
Speaker 1: business is much more like the nineties and the nineteen fifties,
Speaker 1: where nine of the artists that are being signed are
Speaker 1: very talented people, but that are absolutely reliant on outside
Speaker 1: songwriters to deliver their heads. So, you know, I don't
Speaker 1: know if you know a statistic, but you know, we
Speaker 1: were talking about Bob Dylan a few minutes ago. It's
Speaker 1: the second of the last Bob Dylan album in two
Speaker 1: thousand and fourteen, which I think was tempest Um. That
Speaker 1: is the last album that became a Billboard Top one
Speaker 1: album of the year that didn't have an outside songwriter
Speaker 1: on it um. So the song it has never yea
Speaker 1: So the songwriter has never been more important in our
Speaker 1: lifetimes but perhaps ever in history than they are today.
Speaker 1: And you know, if you're Monty Lippmann or if you're
Speaker 1: John Janet or Rob Stringer, you know you need to
Speaker 1: have a relationship with you know, whether it's Andrew Watt
Speaker 1: or Taylor Parks or Benny Blanco or the monsters and strangers.
Speaker 1: Those relationships are more important to you today than your
Speaker 1: than your artist relationships are, because that's where the hits
Speaker 1: are coming from, is from the songwriter. But I want
Speaker 1: to to um, take up a point that you made
Speaker 1: a minute ago, which is, you know, you said they
Speaker 1: didn't care where the money was coming from. But the
Speaker 1: truth is is that they absolutely care where the money
Speaker 1: is coming from. And the reason why the songwriter is
Speaker 1: the low man or woman on the totem pole in
Speaker 1: the economic equation today is because the three biggest song
Speaker 1: companies in the world, being Universal, Warner and Sony don't
Speaker 1: advocate for songwriters, Um, you know. And it's not because
Speaker 1: they don't want to, it's because they can't because they're
Speaker 1: you know, those three biggest publishing companies in the world
Speaker 1: are owned by the three biggest recorded music companies in
Speaker 1: the world. And on the recorded music side of the business,
Speaker 1: they're getting four fifths of the revenue, they're getting an
Speaker 1: eight gross margin of forty net margin, and in general
Speaker 1: they own those master recordings in perpetuity, right is you
Speaker 1: and I know there are very few artists that actually
Speaker 1: own their own masters. Right. Conversely, on the song side
Speaker 1: of the busines this on the publishing side of the business,
Speaker 1: you've got a fifth of the revenue, you've got a
Speaker 1: fifth of the margin, and quite rightly, whether it's through
Speaker 1: good management and lawyering in the first place or reversions
Speaker 1: or renegotiations, the songs end up back in the hands
Speaker 1: of the people that co created them. So recorded music
Speaker 1: controlling publishing and stopping publishing for advocating for songwriters is
Speaker 1: why you have this unbelievable disparity. In the way that
Speaker 1: you described the dollar being split, You're right, thirty cents
Speaker 1: goes to Spotify or Apple. Now you can make an
Speaker 1: argument that that thirty cents will eventually become cents twenty
Speaker 1: four cents, and I'm quite certain it will, but that's
Speaker 1: not the material point. The material points what happens to
Speaker 1: the other seventy cents, And currently the other seventy cents
Speaker 1: is fifty eight and a half cents going to the
Speaker 1: record company. Because of their power that they wield mercilessly,
Speaker 1: they are paying most artists on a sale rather than
Speaker 1: on a license, when it actually should be a license.
Speaker 1: If it was a license, they'd be having to split
Speaker 1: that fifty eight and a half cents with them, but
Speaker 1: by paying them on a sale, they pay them about
Speaker 1: nine cents out of every dollar, So they're clearing almost
Speaker 1: fifty cents out of every dollar in recorded music. And conversely,
Speaker 1: on the song side of the business, you've got eleven
Speaker 1: and a half cents that remain. Sometimes you've got four
Speaker 1: or five six songwriters on a song. They have to
Speaker 1: split that eleven and a half cents with their publishers
Speaker 1: in some way, shape or form. So you know, these
Speaker 1: great songwriters that are delivering the songs that make the
Speaker 1: world go around are getting fractions of a penny on
Speaker 1: every dollar. And that you know, as I said at
Speaker 1: the very beginning, this has been changing. This system has
Speaker 1: been the ulterior mode of of hypnosis. The reason why
Speaker 1: I created hypnosis is that in managing people like Diane
Speaker 1: Warren and the Dream at Justin Tranter, people that we're
Speaker 1: songwriters at at the very very highest heights of success,
Speaker 1: and yet they weren't getting what they should be getting
Speaker 1: because of this system where and people will turn around
Speaker 1: to me and say, listen, you know why you blame
Speaker 1: blaming Universal Warner and Sony aren't. Isn't the way that
Speaker 1: songwriters are paid, you know, dictated by legislation, And the
Speaker 1: answer to that is absolutely, it's dictated by legislation. But
Speaker 1: how is legislation affected. It's affected by lobbying, It's affected
Speaker 1: by advocacy. So if you don't have the three biggest
Speaker 1: companies in the world advocating for songwriters and fighting for
Speaker 1: them to get paid more money, how do you expect
Speaker 1: that to be reflected in the legislation. So we're a
Speaker 1: catalyst to bring that change. I'm very, very vocal about it.
Speaker 1: As I say, it's the ulterior motive, and every one
Speaker 1: of my four ninety odd institutional investors has known from
Speaker 1: day one that this ulterior motive is the real reason
Speaker 1: why the fund was created, because I knew that if
Speaker 1: I talked to Bob Left, it's and I talked this
Speaker 1: way that you know, Universal Warner and Sony could squash
Speaker 1: me like a fly if they wanted to. But now
Speaker 1: they can't because I've a multi billion dollar company behind me,
Speaker 1: some of the finest song assets in the world, and
Speaker 1: I have a platform to speak on behalf of the
Speaker 1: songwriter and the creator um and to try and bring
Speaker 1: change and of course, the serendipity of it all is
Speaker 1: that if I can bring that change and I can
Speaker 1: get the songwriter paid more money, it's also in the
Speaker 1: best interest of my shareholders because they'll get more money
Speaker 1: for the songs that we own. And therefore they're prepared
Speaker 1: to fight and they're prepared to put their money in
Speaker 1: and you know when you've got uh, you know, investors
Speaker 1: that range from the Church of England to invest Deck,
Speaker 1: to invest Go to refer to you know, Acca and
Speaker 1: Newton and on and on and on. These are all
Speaker 1: people that that that have a lot of power in
Speaker 1: their own right. Um, so that was really the motive. Okay,
Speaker 1: let's just say, let's just say you get more for songwriters.
Speaker 1: Are you agitate for that or advocate for that? It's
Speaker 1: got to come out of the recording company's end. I mean,
Speaker 1: they're gonna really hard, you know what they've what they've done, Bob,
Speaker 1: which I think is unbelievable. You know, if you and
Speaker 1: I were having this conversation five years ago, we'd never
Speaker 1: be able to look each other in the eye and
Speaker 1: say that the best years of the music industry in
Speaker 1: front of it, right. We can say, hey, remember back
Speaker 1: in ninety nine, remember back in the year two thousand,
Speaker 1: whereas right now, you know, I can look my nineteen
Speaker 1: year old son in the eye and say you should
Speaker 1: absolutely devote yourself to music because the best years of
Speaker 1: the music industry in front of it. So, you know,
Speaker 1: Universal Warner and Sony And despite the fact that our
Speaker 1: our business has been saved by Daniel Eck and Spotify,
Speaker 1: and the way that Apple have followed and Spotify is
Speaker 1: wake um, you know, creating this very powerful one to
Speaker 1: punch and obviously lots of great regionals around the world
Speaker 1: as well. Um, you know we're making them out to
Speaker 1: be the villain, right we were? You know, we've we've
Speaker 1: just given evidence for the last four or five months
Speaker 1: in the UK in the Department of Culture, Music and
Speaker 1: Sciences hearings in Parliament, right and the if you look
Speaker 1: at our written evidence UH and also our our personal
Speaker 1: evidence are in person evidence. The hearings were originally called
Speaker 1: UH an investigation into the Business Practices of Music Streaming Services,
Speaker 1: and the first couple of sentences of our written evidence
Speaker 1: basically say, you know, look, we appreciate that you're doing
Speaker 1: these hearings into the quote unquote business practices of music
Speaker 1: streaming services. But we think what you're gonna find very
Speaker 1: very quickly, and we want to prepare you for this,
Speaker 1: is that what you're really going to be investigating is
Speaker 1: the unhealthy relationship that exists between the three major companies
Speaker 1: recorded music companies in the world, controlling three major publishing
Speaker 1: companies in the world and stopping them from advocating for songwriters.
Speaker 1: That's what stopping the songwriter from being paid properly. And
Speaker 1: the funny thing, and the most ironic thing about all
Speaker 1: of this is that if you're Big John and you're
Speaker 1: running Sony, if you're a guy Moot or Carry and
Speaker 1: you're running Warna Chapel, if you're um, excuse me, Jody
Speaker 1: and you're running Universal, you're delivering the most exciting people
Speaker 1: in your entire company's business, and yet you're not being
Speaker 1: rewarded properly for it. Right. It's it's not I'm not
Speaker 1: when I am critical of the majors. I'm not critical
Speaker 1: of the publishing companies. I think the publishing companies are
Speaker 1: doing great work. I'm not critical of the people that
Speaker 1: that work in the recorded music companies. What I'm critical
Speaker 1: of is the paradigm. There are people that work in
Speaker 1: those companies that are as passionate about music, that care
Speaker 1: as much as I do and and you do, and
Speaker 1: that do great work, but they're off parading under a
Speaker 1: seventy five year old paradigm that doesn't properly recognize the
Speaker 1: role of the songwriter. And that's why I'm intent on
Speaker 1: changing it. Let's go to the other side of the equation.
Speaker 1: You own these songs. There's administration. This is something that's
Speaker 1: been evolving in the Internet era. Cobalt was the first mover.
Speaker 1: Universal seems to have updated their systems. Let's leave Sync
Speaker 1: aside at this point in time. Who administers typnosis? So
Speaker 1: we have deals with everybody, so we we you know, Cobalts,
Speaker 1: I would say, are our preferred administrator. We believe that
Speaker 1: they collect more. We believe that they collected faster, and
Speaker 1: we believe that they pay it through faster, and we
Speaker 1: believe that they do it in a completely transparent way.
Speaker 1: But you're absolutely correct that Universal and Sony and now
Speaker 1: Warner two are all king hard to try to get
Speaker 1: to a better place, right But the difference is this
Speaker 1: is that you know, most of these big companies also
Speaker 1: operate on a two year money go around right where
Speaker 1: they collect some money in Spain and it sits there
Speaker 1: for six months, and then you know, it operates that
Speaker 1: they send the money to the UK and it sits
Speaker 1: there for another six months, and then they send it
Speaker 1: to the US and it sits there for another six months.
Speaker 1: And because most of them still only have two non
Speaker 1: transparent reporting periods a year, you know, January one to
Speaker 1: June thirty and they pay you out at September thirty,
Speaker 1: July one to December thirty one, and they pay you
Speaker 1: out at March thirty one. You know, they're basically holding
Speaker 1: onto your money for the better part of two years.
Speaker 1: And there's a great book um uh that's out this
Speaker 1: week um by will the Formumer team Spotify. Will page
Speaker 1: that you know, will tell you that, you know, if
Speaker 1: you were to take the cap it all that is
Speaker 1: being used by Universal, Warner and Sony on a daily basis,
Speaker 1: from moneys that haven't gone through, to songwriters that haven't
Speaker 1: gone through to artists, it's a massive part of of
Speaker 1: you know, it's the capital that they used to keep
Speaker 1: their businesses going and making new investments. Um And this
Speaker 1: is artists money and and songwriters money. You know, Willard
Speaker 1: ardreents at cobalt Um, I think came to the business
Speaker 1: twenty years ago with a very noble and important idea,
Speaker 1: which was to have transparency for the songwriter and the
Speaker 1: artist and to put them in a position where their
Speaker 1: money was being collected quickly, it was being paid through quickly,
Speaker 1: and that they understood every step of the way. The
Speaker 1: fact that that has now forced the major companies to
Speaker 1: try and and and at least uh go some level
Speaker 1: of of emulation, or to some degree of emulation, I
Speaker 1: think is the the artistic community and the songwriting community,
Speaker 1: Oh Willard a debt that could never ever be repaid.
Speaker 1: And certainly the spirit of Hypnosis follows very much that
Speaker 1: of Cobalt. That you know, we're forcing people to make
Speaker 1: change that they don't want to change, that that they
Speaker 1: that they don't want to make, whether they don't feel
Speaker 1: that they can make because of course people fear change
Speaker 1: right on a on a on a personal level, I
Speaker 1: like things to be the same way every day in
Speaker 1: my personal life, but in my professional life. You know,
Speaker 1: people call me a disruptor. I've never used that word myself,
Speaker 1: but I'm absolutely wanting to destroy these paradigms that have existed,
Speaker 1: and that I've put the artists at the bottom of
Speaker 1: the pile, and I want to put them take them
Speaker 1: to the top of the pile. Because without the songwriter
Speaker 1: in the artist, what do we have right if you
Speaker 1: go and see an artist. Because yeah, we made that
Speaker 1: point many times. Let's go back to administrator. You can't,
Speaker 1: but you can't. But you can't make it enough, Bob,
Speaker 1: you know the remember three rises in the past eighties,
Speaker 1: six years, Right, There's there's so much and I'll use
Speaker 1: this word and you can beep it out if you like,
Speaker 1: but there's so much fuccory in this business that you
Speaker 1: have to keep repeating the same things over and over
Speaker 1: and over again. So thank you for indulging. Those are
Speaker 1: all good points, but I want to be able to
Speaker 1: address a little bit more. So. You say that a
Speaker 1: hypnosis uses multiple administration companies, and would hypnosis ever go
Speaker 1: into the administration business? Um? You know, So we use
Speaker 1: multiple administration companies that say Cobalt is our preferred administrator.
Speaker 1: But we do great work with Sony on a daily
Speaker 1: basis on our artists and songwriters. The same thing with Universal,
Speaker 1: the same thing with Warner including Concorde as well, and
Speaker 1: and and and several others. Because of course, when we
Speaker 1: buy our catalogs, often there is no administration deal in place,
Speaker 1: so we can take over on day one. But at
Speaker 1: other times there's a year left on the administration, there's
Speaker 1: two years left on the administration. We've even bought some
Speaker 1: catalogs where the administration is is perpetual with a particular company.
Speaker 1: And I think that you know, you you talked about
Speaker 1: universal um, you know, kind of stepping up to the
Speaker 1: plate as far as emulating Cobalt or or or doing
Speaker 1: something that's forward thinking. But I think that you can
Speaker 1: give Sony a lot of credit on that front as well. UM.
Speaker 1: And I think that that that now with Guy Mood
Speaker 1: at Warner Chapel, I think he's gonna want to do
Speaker 1: the same thing. So you know, I have high hopes
Speaker 1: that that all of them will want to do the
Speaker 1: same thing. I'm I'm in the asset business, so you know,
Speaker 1: from that point of view, I believe that my investors
Speaker 1: money should go into buying great songs, um. And that
Speaker 1: you know, you can rent these services from people. But
Speaker 1: as we approach you know what is now, you know,
Speaker 1: two point five billion dollars in did and I expect
Speaker 1: that by the end of the next two years will
Speaker 1: be about six billion dollars invested. It might be in
Speaker 1: the best interest of our shareholders to have an administration
Speaker 1: company UM and that's something that that will continue to
Speaker 1: to keep an eye on. But you know that, to
Speaker 1: me is not the priority. The priority is to to
Speaker 1: stay very focused on buying these great songs while they're
Speaker 1: there to buy. Okay, let's talk about you specifically, Mark.
Speaker 1: Where did you grow up, What did your parents do
Speaker 1: for a living, how many kids in the family, what
Speaker 1: was your adolescents like? Um So I was born in
Speaker 1: a mining town in Quebec that doesn't exist anymore. When
Speaker 1: the when the mind dried up, the people dried up.
Speaker 1: To um So, I ended up being raised in Nova Scotia.
Speaker 1: My parents were Greek immigrants to to Toronto in the
Speaker 1: nineteen fifties. Before I was born, my father had been
Speaker 1: a soccer player in Greece for a team called Pouk
Speaker 1: and he was brought to Canada to play soccer for
Speaker 1: a team called the Toronto Star, which is the sort
Speaker 1: of forefather of the Toronto MLS team today. Um and
Speaker 1: his brother was a topographer for the iron Ore company.
Speaker 1: Of Canada. So when he retired from soccer, he went
Speaker 1: to work with his brother. In those days, you know,
Speaker 1: the brother was was responsible for designing the infrastructure that
Speaker 1: the miners would would need to live and do their job.
Speaker 1: And there were opportunities, whether it was building restaurants or
Speaker 1: schools or or whatever the case might be. When all
Speaker 1: that dried up, we moved to Nova Scotia, and I
Speaker 1: had this very idyllic childhood in Nova Scotia. But I
Speaker 1: was very very lucky. I've got I've got a sister
Speaker 1: who's still in Toronto today, and and uh, she's lovely
Speaker 1: and everything. But you know, when we were kids, we
Speaker 1: didn't see eye to eye on on on just about anything.
Speaker 1: Right if was black, you know, she loved the Boston Bruins.
Speaker 1: I loved the Montreal Canadians. She loved which one of
Speaker 1: you is older. She's one year older than I am.
Speaker 1: So I had this very serendipitous thing happened to me though,
Speaker 1: which is that my eldest cousin, my father's brother's eldest son,
Speaker 1: who was about ten years older than I was. Um,
Speaker 1: he got in trouble in Greece because Greece was under
Speaker 1: a military junta. And if you were you know, fourteen
Speaker 1: or fifteen years old and you were smoking dope and
Speaker 1: and and you know, listening to music um and wearing
Speaker 1: peace signs that the Greeks believed were like a broken crucifix,
Speaker 1: you were you were a target for for the military.
Speaker 1: So my uncle sent my older cousin, Mike to live
Speaker 1: with us. And this guy arrived with long hair. He
Speaker 1: arrived with argust by wishbone Ash. He arrived with the
Speaker 1: first two Fleetwood Mac records that the Peter Green Ones.
Speaker 1: He arrived with Paranoid by Black Sabbath, super fled by
Speaker 1: Curtis Mayfield, t for the Tillerman Uh, just about you know,
Speaker 1: fourteen or fifteen albums that are still amongst the fourteen
Speaker 1: or fifteen albums that are the most important in my life.
Speaker 1: And he knew everything about drugs, and he knew everything
Speaker 1: about girls, and he was someone to aspire to be
Speaker 1: because he also knew an awful lot about music. And
Speaker 1: that really kind of put me on the path that
Speaker 1: you know, I'm still on today, and I'm still influenced by,
Speaker 1: as I say, those those fourteen or fifteen records that
Speaker 1: he had, and we would sit in in the room
Speaker 1: that my parents had constructed for him, and we had
Speaker 1: one of those you know, dropped down turntables where you'd
Speaker 1: stack the records up and they dropped one at a
Speaker 1: time and play through, and then you turn them all
Speaker 1: over and play them through. And I fell in love
Speaker 1: with this idea of twenty minutes of music and then
Speaker 1: instead of wanting to hear the next twenty minutes of music,
Speaker 1: you'd want to play that same side over and over
Speaker 1: and over again because it was so magical. Um. And
Speaker 1: you know, he arrived, he gave me a present for
Speaker 1: the first birthday that that I had with him there,
Speaker 1: which was a copy of Sergeant Pepper's And then that
Speaker 1: got me into a place of spending every penny that
Speaker 1: I had on on records. So very soon after I
Speaker 1: bought my own tea for the Tillerman. Very soon after that,
Speaker 1: I bought Harvest, uh. And these records, you know, a
Speaker 1: small town of of of two thousand people, these records
Speaker 1: really start to teach you that there's something else that's
Speaker 1: going on in the world, uh, that's not going on
Speaker 1: in your world. And then concurrently with that, my parents
Speaker 1: one of the restaurants that they had was a diner,
Speaker 1: and the diner had a jukebox in it, and that
Speaker 1: jukebox had everything from Elvis Presley singing mac Davis's song
Speaker 1: in the Ghetto to you know, looking out by My
Speaker 1: back Door by CCR. And again, these records had a
Speaker 1: massive effect on these So you know, I can very
Speaker 1: distinctly remember In the Ghetto as being the first record
Speaker 1: that I ever heard that made me sad, and that
Speaker 1: made me realize that in fact, everyone's world wasn't perfect
Speaker 1: in the way that my world seemed to be perfect. So,
Speaker 1: if you like, it was my first kind of real
Speaker 1: experience of empathy brought up by mac Davis's great words
Speaker 1: and Elvis is great delivery. And you know, I suddenly
Speaker 1: realized that I was going to the school of Neil Young,
Speaker 1: and going to the school of Lou Reid and led
Speaker 1: Zeppelin and Patti Smith and eventually the Clash, and you know,
Speaker 1: these these are are the people that kind of educated
Speaker 1: me and prepared me for a world. I can remember
Speaker 1: playing needle in the damage done by Neil Young and
Speaker 1: having nightmares that I was taking heroin and waking up
Speaker 1: in in the morning and kind of looking at my
Speaker 1: risks to see whether or not they were really track
Speaker 1: marks there. Um. So the music had an unbelievably profound
Speaker 1: effect on me. And you know, you you, I think
Speaker 1: when you write your best is when you write about Elton,
Speaker 1: and uh, when you write at your best is when
Speaker 1: you're writing it Elton about Elton. And and those Alton
Speaker 1: records had the same effect on me, particularly a little
Speaker 1: bit later than than the ones that you rave about,
Speaker 1: but particularly Captain Fantastic and someone saved my life tonight.
Speaker 1: Those those are you unbelievably important records for me. So
Speaker 1: they gave me the ability to manifest how the funk
Speaker 1: to get out of this town with two thousand people
Speaker 1: in it and go on to manage Elton John was
Speaker 1: all based on on that obsession with this music and
Speaker 1: recognizing that that, uh uh, there was something for me
Speaker 1: to do because you know I talked about Elliott Roberts earlier. Um,
Speaker 1: I was very clear from the time I was seven
Speaker 1: or eight years old that I had no musical talent
Speaker 1: and that I was never gonna be you know, Neil
Speaker 1: Young or Jimmy Page or Robert Plant. So I started
Speaker 1: to read about these people in everything from Rolling Stone
Speaker 1: to Cream to whatever the library had, and I started
Speaker 1: to learn about people like Elliott, and I started to
Speaker 1: learn about people like Peter Grant, and suddenly there were
Speaker 1: you know, kind of role models there for me that
Speaker 1: you know, I believed that I could emulate. I I
Speaker 1: got the real message that, uh, you know, people that
Speaker 1: were making music wanted to make music, and that other
Speaker 1: people had to come along and protect them and make
Speaker 1: sure that that, you know, the commerce was maximized with
Speaker 1: the art not being compromised. Okay, so you graduate from
Speaker 1: high school, what's your next step? How do you get
Speaker 1: out of Nova Scotia? Um? I literally ran away, Uh
Speaker 1: you know, I ended up in in in Uh you know,
Speaker 1: I've been writing letters to Simon Draper at Virgin Records
Speaker 1: in the UK. And and for for those that don't know,
Speaker 1: Simon was Richard's Richard Branson's cousin, and he was the
Speaker 1: guy that that uh you know, really was the musical
Speaker 1: brains behind the company. So you know, he had signed
Speaker 1: Tangerine Dream, he had signed My Goldfield, he had signed
Speaker 1: Robert Wyatt. But then of course subsequently everyone from the
Speaker 1: Sex Pistols to XTC two Simple Minds to You Be
Speaker 1: forty two. Uh you know the Human League, Peter Gabriel,
Speaker 1: you know, Orchestral Maneuvers in the dock you beforety On
Speaker 1: and on and on. So this amazing thing happened where
Speaker 1: I find myself working for Virgin Records, still in my teens,
Speaker 1: a little bit, a little bit slower. How do you
Speaker 1: write these letters? How do you literally get a job
Speaker 1: at Virgin Records? How old are you? And we're and
Speaker 1: what is the job? So I'm making I go to
Speaker 1: Toronto and I get a job for six months thanks
Speaker 1: to a girlfriend that I had, were king for the
Speaker 1: Canadian UH distributor of Motown. And before I got that job,
Speaker 1: I knew that Virgin was opening and they were going
Speaker 1: to open as a standalone label, and I went and
Speaker 1: met with the guy that was going to run it,
Speaker 1: and he offered me the job to be the marketing person,
Speaker 1: the one and only marketing person at Verga Records at
Speaker 1: that point. And but the company was gonna open for
Speaker 1: six months. So for that six month period, I got
Speaker 1: this job working for the Canadian distributor of Motown and
Speaker 1: which was a company called Quality Records and run by
Speaker 1: this magical guy called George Street and UH, a guy
Speaker 1: called UH Larry McCrae and Cameron Carpenter, who I know
Speaker 1: you you know quite well, and of course in Canada,
Speaker 1: and that that kind of became my little gang for
Speaker 1: this six month period. And the funny thing about this
Speaker 1: that within days of me starting the company took on
Speaker 1: a distribution deal with Clive Calder's then brand new Jive Records.
Speaker 1: And Uh, the guy that UH was the Jive person,
Speaker 1: the young Jive person in the same way that I
Speaker 1: was the young Quality Records person, was Barry Weiss. So
Speaker 1: the first phone call that we ever had, the first
Speaker 1: phone call I ever made, was to Barry Weiss. The
Speaker 1: first phone called Barry Weiss ever made, you know, in
Speaker 1: terms of being in the music business, was to me
Speaker 1: to talk about a band called the Compsat Angels that
Speaker 1: we both loved, that had been on poly Door and
Speaker 1: had a rough time and had now signed to Jive
Speaker 1: and were affectionately known as the cs Angels because the
Speaker 1: Compsat Satellite Company was taking action against them not to
Speaker 1: use the name. Um. So I was there for six
Speaker 1: months and then I went immediately to Virgin Records and
Speaker 1: started to work for Virgin Records, and I developed my
Speaker 1: relationship with Simple Minds, and I developed my relationship with
Speaker 1: Orchestral Maneuvers in the Dark and with the Human League,
Speaker 1: and you know, with all these wonderful artists. Because Virgin
Speaker 1: had this serendipitous situation where even though they were making
Speaker 1: left of center you know, what was known as alternative music,
Speaker 1: it was succeeding commercially in wild ways, you know, culture Club.
Speaker 1: We're becoming the biggest band in the world. Simple Minds
Speaker 1: were soon to follow suit. Um, and that was my
Speaker 1: big passion project and remains one of my great passions
Speaker 1: to today. Um. Same thing with O. M. D. And
Speaker 1: same thing with you Be forty, who had massive success
Speaker 1: with Red Red Wine. And I was young and unsophisticated,
Speaker 1: and I didn't realize that, uh, I wasn't working for
Speaker 1: the artist, right I because Virgin was the most artist
Speaker 1: friendly record company. I honestly thought that I was working
Speaker 1: for the artist, not for the for someone else. And um,
Speaker 1: what happened was that they rewarded my success at the
Speaker 1: label by allowing me to be a part of signing
Speaker 1: one of the most wonderful Canadian artists of all time,
Speaker 1: someone that I would still rank even though she's never
Speaker 1: had the career that she deserved, alongside Neil Young and
Speaker 1: Joni Mitchell and Robbie Robertson and Leonard cone Is you
Speaker 1: know in the Weekend and Drake is Canada's greatest products. Um.
Speaker 1: It was a girl called Mary Margaret O'Hara, and she
Speaker 1: was Catherine O'Hara's little sister, and she was unbelievably special.
Speaker 1: And uh, you know, we got Andy Partridge from XTC
Speaker 1: to agree to make her record. And even though Andy
Speaker 1: was a wonderful artist in the form of XTC, he
Speaker 1: wasn't a wonderful producer, and he wasn't someone that was
Speaker 1: prepared to recognize that in the producer's role, that his
Speaker 1: job was to be there to serve Mary Margaret and
Speaker 1: to help her make the best record that she wanted
Speaker 1: to make possible. So there were all kinds of problems
Speaker 1: from the get go in the making of that record.
Speaker 1: And even though the record eventually came out three or
Speaker 1: four years later as a record called Miss America and
Speaker 1: won a lot of awards and was the album of
Speaker 1: the Year, the actual making of the record was a
Speaker 1: very very painful experience. And I recognized at that point
Speaker 1: that for the first time, suddenly the light bulb went off,
Speaker 1: and I found myself in a position where I wanted
Speaker 1: to be on Mary's side rather than on the record
Speaker 1: company's side. And at that point I became a manager,
Speaker 1: and uh, they were probably gonna fire me anyways, because
Speaker 1: it was very clear that I was on on on
Speaker 1: on Mary's side and the company had new leadership, and
Speaker 1: and uh, you know, probably wasn't gonna work out. But
Speaker 1: I basically went to two guys in and that I
Speaker 1: had a relationship with a guy called Rod Smallwood who
Speaker 1: you know, and a guy called Andy Taylor, who you know.
Speaker 1: And I said, listen, I've had this epiphany. I'm not
Speaker 1: supposed to work for a record company. I'm supposed to
Speaker 1: work for the artist. I'm supposed to be a manager.
Speaker 1: And Rod and Andy said, you're right, and you know,
Speaker 1: you should come in with us. They were both fifteen
Speaker 1: years older than I was, and they were looking. Yeah,
Speaker 1: I worked at Sanctuary of course in the eighties, very
Speaker 1: different the one you worked for. But how did you
Speaker 1: know Rodd Andy Andy to throw in with them? Because
Speaker 1: I was a fan of Iron Maidens, and I was
Speaker 1: particularly a fan of the way that Rod acted on
Speaker 1: behalf of Iron Maiden and protected the band. And I
Speaker 1: knew that, you know that that he was one a
Speaker 1: role model that uh, you know, you could certainly do
Speaker 1: a lot worse than too. And you know the great
Speaker 1: thing about these two guys, you know, I'm you already
Speaker 1: know this, but I'll tell it for everyone else that
Speaker 1: doesn't is that you know, they were best friends. But
Speaker 1: they couldn't be more different from each other. Right, one
Speaker 1: of them was completely business the other was completely creative.
Speaker 1: One of them hated sports, the other one loved sports.
Speaker 1: The only thing that they had in common was that
Speaker 1: they loved drinking, right, and they loved Iron Maiden, and uh,
Speaker 1: I became the bastard offspring of the two of them. I.
Speaker 1: I took what Andy knew about business and I absorbed
Speaker 1: it all. I took what Rod knew about integrity and
Speaker 1: about creativity and you know, protecting people in fairness, and
Speaker 1: I absorbed all of that as well. And I became,
Speaker 1: as I said, I'm very proud to be the bastard
Speaker 1: offspring of of of the two of them. And I've
Speaker 1: certainly built a career on the back of lessons that
Speaker 1: they taught me. And there was another guy that was very,
Speaker 1: very important in this even before Rod Nandy, and that
Speaker 1: was a guy called Bruce Finley from Edinburgh in Scotland
Speaker 1: who managed Simple Minds. And this guy very very similarly
Speaker 1: to Rod Smallwood. He understood that your job was to
Speaker 1: go out and create as much enthusiasm for your artists
Speaker 1: music as possible and get the troops on your side
Speaker 1: and get them working, and get them in love with
Speaker 1: the band your band as much as you're in love
Speaker 1: with your band. And he taught me a tremendous amount
Speaker 1: as well. And those those three guys, along with Elliott Roberts,
Speaker 1: are are you know, the people that I consider to
Speaker 1: be my mentors. Okay, a couple of questions here, Hey,
Speaker 1: what year did you start working for Sanctuary be the
Speaker 1: company ultimately goes public, can you tell us the insight
Speaker 1: and how that happened and see how did you essentially
Speaker 1: end up running it? Sure? So, so the the uh,
Speaker 1: this is probably eighty six and probably the better part
Speaker 1: of of UM five or six years later, you know,
Speaker 1: were iron Maidens Management Company right when the when the
Speaker 1: company ends in two thousand and six or so, we're
Speaker 1: still iron Maidens Management Company, but we go from being
Speaker 1: iron Maidens Management Company to eventually being out John's management
Speaker 1: company and Guns and Roses management company, Beyonce's management company,
Speaker 1: with me driving all of those artists. UM. And the
Speaker 1: way that it happened was that we recognized in the
Speaker 1: early nineties, UM, when Uh Polli Graham became a company
Speaker 1: called p l G. That was the first real consolidation
Speaker 1: of a major record company where they went from effectively
Speaker 1: having four companies to basically having four A and R
Speaker 1: sent ters with a common marketing department and a common
Speaker 1: promotion department. That this was going to disenfranchise many artists
Speaker 1: because you know, if you were one of the artists
Speaker 1: that was selling ten million records around the world, you
Speaker 1: were going to get a lot of attention because of that.
Speaker 1: But if you were an artist that was going to
Speaker 1: sell a million records around the world, that was no
Speaker 1: longer interesting, believe it or not, you know, knowing what
Speaker 1: we know about what happened between two thousand and one
Speaker 1: and two thousand and sixteen, there's a point in the
Speaker 1: nineties where being able to sell a million copies around
Speaker 1: the world is not interesting to the major record companies.
Speaker 1: And we knew that this was going to disenfranchise a
Speaker 1: lot of artists, and it would particularly disenfranchise a lot
Speaker 1: of artists in the hard rock world. That that that
Speaker 1: we had a lot of expertise in, whether that was
Speaker 1: a Mega Death or a Slayer or whoever it might be.
Speaker 1: And we wanted to be prepared to be able to
Speaker 1: service those artists better than the big companies. So, you know,
Speaker 1: we created an independ the record company that became the
Speaker 1: biggest independent record company in the world and that worked
Speaker 1: with everyone from you know Morrissey to Megadeth to you
Speaker 1: know Ossy and and and Osborne and Kelly Osborne and
Speaker 1: many many others um and became very much best in
Speaker 1: class for its period. We had the biggest booking agency
Speaker 1: outside of North America that was Helter Skelter that booked
Speaker 1: everyone from from Metallica through to a C d C
Speaker 1: as well as Iron Maiden. And the idea was we
Speaker 1: built a real three sixty company, Bravado Merchandizing that you know,
Speaker 1: merchandised everyone from the Spice Girls to the Red Hot
Speaker 1: Chili Peppers to Iron Maiden. Um. You know, we built
Speaker 1: a company that could provide services to all of these
Speaker 1: wonderful artists on a three hundred and sixty degree basis.
Speaker 1: But my vision of three sixty was very, very different
Speaker 1: from the modern record companies version of three sixty. My
Speaker 1: version of three sixty was, look, we're going to make
Speaker 1: a capital investment in this artist. In order to get
Speaker 1: that capital investment back, we need to have as many
Speaker 1: income streams as possible. But within each of those income streams,
Speaker 1: we're going to give the artist the best deal possible
Speaker 1: and will be based on what the market is being
Speaker 1: is prepared to pay for that artist. And the company,
Speaker 1: as you know, was wildly successful for a long period
Speaker 1: of time. It went public and then you know what
Speaker 1: happened was that as you get from two thousand and
Speaker 1: five into two thousand and six, the company was the
Speaker 1: first major company to feel the effect of the bottom
Speaker 1: falling out of the record business because people were now
Speaker 1: able to download their music for free illegally rather than
Speaker 1: to pay for it. And we were too big, um,
Speaker 1: you know, we were in that period of time where
Speaker 1: we weren't small enough to be able to make changes quickly,
Speaker 1: and the effect on the company was disastrous. And also
Speaker 1: the company didn't have the level of sophistication that it
Speaker 1: should have with the stock market and its dealings. With
Speaker 1: the stock market, and effectively what happened was that, you know,
Speaker 1: after seven years of year on year growth, instead of
Speaker 1: the company going to the stock market and saying, look,
Speaker 1: that type of growth isn't possible right now, illegal downloading
Speaker 1: is killing the music business. But we've got these amazing
Speaker 1: artists like Elton John and Beyonce and Guns and Roses
Speaker 1: and Morrissey and many many others, UM, and what you
Speaker 1: need to do is you need to let us batten
Speaker 1: down the hatches and get to a point where we
Speaker 1: ride this out and then we'll be back for you.
Speaker 1: And instead, more growth was promised and the company wasn't
Speaker 1: able to sustain itself, so it was sold to Universal.
Speaker 1: That becomes a very very important UH lesson learned in
Speaker 1: the UH way that then Hypnosis gets launched. Because when
Speaker 1: I launched Hypnosis, I ensured that I had a level
Speaker 1: of sophistication and a level of advice at the very
Speaker 1: very highest level UM from the financial community. UM that
Speaker 1: would ensure that I would never ever be in a
Speaker 1: position where shareholders were let down again. So it's something
Speaker 1: that I had to be very very honest about in
Speaker 1: the sense that that UM I was never gonna try
Speaker 1: and hide the fact that Sanctuary didn't succeed, even though
Speaker 1: the idea was wonderful. UM. But I also had to
Speaker 1: make sure that I had the right people around me, um,
Speaker 1: in order to gain the trust of the financial community. Okay,
Speaker 1: so what do you do from two thousand six to hypnosis? UM?
Speaker 1: I pretend that everything is perfect, but really I'm terribly depressed.
Speaker 1: And while I continue to manage lots of wonderful artists
Speaker 1: like Morrissey and John Stone and Diane Warren and Justin
Speaker 1: Tranter and The Dream and and and you know, lots
Speaker 1: of incredible people, Macy Gray, I'm probably you know, clinically depressed,
Speaker 1: and I'm trying to keep my chin up and trying to, uh,
Speaker 1: you know, find myself again, because you know, Sanctuary was
Speaker 1: a twenty one one year experience that uh was really about,
Speaker 1: you know, I think doing something important, um, and then
Speaker 1: it didn't work. And when that happens, of course, UM,
Speaker 1: you know, not only do you feel like a failure,
Speaker 1: but probably wrongly, you also assume that the rest of
Speaker 1: the world sees you as a failure as well. And
Speaker 1: I found myself talking to people all the time, and
Speaker 1: people would would you know, say nice things and do
Speaker 1: nice things. But it didn't feel that way to me.
Speaker 1: To me, it felt like it was a massive failure. UM.
Speaker 1: So it took me a long time to come out
Speaker 1: of that. And even though I think that you know,
Speaker 1: my friends and my family and my contemporaries didn't ever
Speaker 1: really see it, my artists never really saw it. I
Speaker 1: knew it. I knew that I was fighting, um, you know,
Speaker 1: this this feeling inside of me on a daily basis.
Speaker 1: And it just took me, you know, the minute that
Speaker 1: that I hatched the plan for hypnosis and I knew
Speaker 1: exactly what it was. Um, I came out of that
Speaker 1: because then I had clarity on what I could do
Speaker 1: to take this previous failure and turn it into not
Speaker 1: a victory for myself, but a victory for the songwriting community.
Speaker 1: Because that's the you know, the idea of hypnosis was
Speaker 1: born out of managing Diane Warren, managing Justin Tranter, managing
Speaker 1: the Dream and realizing that these people were delivering massive
Speaker 1: hit songs for artists and not getting paid properly. And
Speaker 1: what I saw was that UM streaming was and you know,
Speaker 1: Daniel Eck and Martin Lawrence and at Spotify can attest
Speaker 1: to this. It was very clear to me the first
Speaker 1: time I ever saw Spotify that not only was it
Speaker 1: going to be wildly successful, but the effect that it
Speaker 1: was going to have was to take music from being
Speaker 1: a discretionary or luxury purchase and turn it into a utility.
Speaker 1: Because that ten dollar price point, that ability to have
Speaker 1: access to at that point almost everything to today pretty
Speaker 1: much everything, um, you know, was going to be appealing
Speaker 1: enough to the passive consumer to make them want to
Speaker 1: pay for music. So, you know, if you look at
Speaker 1: where we are today, you know, the benchmark for extraordinary
Speaker 1: success in our business used to be the platinum record,
Speaker 1: you know, million copies in a country like the United
Speaker 1: States that has three sixty million people in it. Today,
Speaker 1: you know that one in three sixty you know, tells
Speaker 1: you that the average person might love music, but they
Speaker 1: didn't love music enough to put their hand in their
Speaker 1: pocket and pull out money to pay for it. Today,
Speaker 1: we have a hundred million homes in the United States
Speaker 1: that are paying for a paid music streaming subscription. Right
Speaker 1: so we've gone from one in three hundred and sixty
Speaker 1: people paying for music to one in three point six
Speaker 1: people paying for music. That's why you're seeing the sort
Speaker 1: of money flooding into this business that you're seeing is
Speaker 1: because music has gone from being this luxury purchase to
Speaker 1: now very much being a utility purchase. That was very
Speaker 1: clear to me. Alongside that, I knew that these great
Speaker 1: songs that these songwriters wrote that when they hit they
Speaker 1: became a part of the fabric of society. And when
Speaker 1: they become a part of the fabric of society, they
Speaker 1: start to have predictable, reliable income, and that that would
Speaker 1: make them investible because those are the same reasons why
Speaker 1: we look at gold and oil is that predictability and reliability. Okay,
Speaker 1: so you said that you had a hundred and seventy
Speaker 1: seven meetings. What transpired to build hypnosis? So out of
Speaker 1: those hundred and seventy seven meetings, which were really about
Speaker 1: educating the investment community, as I say, about this predictability
Speaker 1: and reliability of these income streams, and also the fact
Speaker 1: that the income streams were uncorrelated. Right if you know,
Speaker 1: I compare them to golden oil, and you know, if
Speaker 1: if the if political upheaval, if there's some sort of
Speaker 1: political upheaval tomorrow, the price of golden oil will be affected,
Speaker 1: but the price of songs and the revenues associated with
Speaker 1: songs aren't affected because if people are living their best lives,
Speaker 1: they're doing it to a soundtrack of music. Equally well,
Speaker 1: if they're experiencing the sort of challenges that we've experienced
Speaker 1: over the last fourteen or fifteen months, you're taking comfort
Speaker 1: and escaping with music. So this uncorrelated aspect of the
Speaker 1: revenues is something that investors have a real appetite for
Speaker 1: because they understand that in a world of Donald Trump's
Speaker 1: and you know, all the craziness that that's happening all
Speaker 1: over the world, that having uncorrelated assets, at least in
Speaker 1: part of their portfolio is very important. So it took
Speaker 1: about a year and a half to do these hundred
Speaker 1: and seventy seven meetings, and eight of them said to me, Um,
Speaker 1: don't ever darken our doorstep again. It doesn't matter how
Speaker 1: successful you make this idea. Our investors will never be
Speaker 1: you know, the people that give us money will never
Speaker 1: be comfortable with this. Um. Thirty eight of them said,
Speaker 1: you know, we're in. We want to do this, and
Speaker 1: they backed me with two hundred million pounds and the
Speaker 1: other remaining hundred and thirty odd all said listen, you know,
Speaker 1: we think what you're doing is fascinating and uh, we
Speaker 1: love it, but we can't be your guinea pigs. So
Speaker 1: you go away and make this successful and then you
Speaker 1: come back and see us. Which is how we've gone
Speaker 1: from being a two hundred million pound company to being,
Speaker 1: as you say, at two point to two point three
Speaker 1: billion dollar company. Um, because we went back to every
Speaker 1: one of those hundred thirty one investors that said we
Speaker 1: don't want to be your guinea pig, and we've also
Speaker 1: now gone to know another three d or so on
Speaker 1: top of that. So are about four hundred nine or
Speaker 1: odd investors that make up the two point two billion
Speaker 1: dollars that's in hypnosis, and that's allowed us to buy
Speaker 1: sixty three thousand of the most wonderful songs in the world. Okay,
Speaker 1: why is the company based in Guernsey. It's based in
Speaker 1: Guernsey for tax reasons, um. And that's not you know,
Speaker 1: Guernsey is a British Channel island, so it's not tax avoidance.
Speaker 1: But you know, for example, we get the vast majority
Speaker 1: of our money, our earnings comes from the United States.
Speaker 1: Right if we were based on the mainland in UK
Speaker 1: that those US earnings would be subject to withholding tax.
Speaker 1: By being based in Guernsey, they are not subject to
Speaker 1: withholding tax. Does that mean there are people actually in Guernsey.
Speaker 1: Our administrators and our administrator and administrator in this instance
Speaker 1: is very different to our publishing administrator. Our administrator and
Speaker 1: this instances are the people that deal with the money
Speaker 1: on Hypnosis is part. So I I never touch Hypnosis money.
Speaker 1: Hypnosis money is only ever touched by our administrators. They
Speaker 1: make all the payments on our behalf, They collect all
Speaker 1: the moneys on our behalf. You know, everything gets paid
Speaker 1: through into two our Guernsey bank accounts. So yeah, we
Speaker 1: have a small team of people in Guernsey, but the
Speaker 1: majority of our people are in London and we have
Speaker 1: eighty three people between London and Los Angeles. Okay, you
Speaker 1: have a unique structure and I'll let you explain it
Speaker 1: because I don't want to make a mistake. Where there
Speaker 1: is the company Hypnosis that owns the asset, yet you
Speaker 1: work for a different company that provide management services, Why
Speaker 1: and how does that work? So this so, this is
Speaker 1: what's known as an investment trust and it's a classic
Speaker 1: construct on the London stock market. Right. So so there
Speaker 1: are many many investment trusts. The vast majority of the
Speaker 1: companies in in in the foot see to fifty our
Speaker 1: investment trusts. And this construct of having a vehicle that
Speaker 1: owns the assets and that has no liabilities beyond the
Speaker 1: ownership of those assets is a very very allows for
Speaker 1: a very very clean company. And then you have an
Speaker 1: investment advisor that then manages those assets. So I'm the
Speaker 1: founder of both companies. I'm founder of the parent company
Speaker 1: if you like, or the main company, which is the
Speaker 1: asset holder, Hypnosis Songs Fundlimited. I'm also the founder of
Speaker 1: the Family Music which is the company that manages those
Speaker 1: assets and that buys those assets on the behalf of
Speaker 1: of of of the fund. And as I say, this
Speaker 1: is a classic English stock market construct. Um. And we've gone,
Speaker 1: you know, the three years plus that we've been doing this,
Speaker 1: we've gone from being a normal listing on the London
Speaker 1: stock market to a year later, on the back of success,
Speaker 1: being a premier listing, and then fourteen months ago, fifteen
Speaker 1: months ago we became a foot see two fifty company.
Speaker 1: We're one of the biggest companies on the London stock
Speaker 1: market and we're the number twenty three biggest yielder on
Speaker 1: the London stock Market, meaning that they're only twenty two
Speaker 1: companies that are paying a bigger dividend to their investors
Speaker 1: than we are. Okay, there was some scuttle but about
Speaker 1: this recently. Can you explain how the management company, the
Speaker 1: family operation gets paid and how you get paid as
Speaker 1: opposed to the investor, because there were some analysts and
Speaker 1: investors were kicking around raising questions about this. Yeah, there's
Speaker 1: there were there were some newspaper reports that, um, you know,
Speaker 1: we're basically making the point that the more I invest
Speaker 1: and the more money I raise, the more the family
Speaker 1: music gets paid. Right. But of course, and and that's
Speaker 1: a fair statement to make. It's a it's an accurate
Speaker 1: statement to make. We get paid on the back of
Speaker 1: the money that we raise and the money that we invest.
Speaker 1: So we you know, on the first five sorry, first
Speaker 1: two fifty million pounds that we raised we got, we
Speaker 1: get paid one percent of that as a management fee.
Speaker 1: On the next two d fifty million pounds we get
Speaker 1: paid point nine percent. This is all a matter of
Speaker 1: public records, so I don't mind mind disclosing this. And
Speaker 1: then on on everything beyond that first five million pounds
Speaker 1: we then get paid point eight percent. So the more
Speaker 1: money we raise and the more money we invest, the
Speaker 1: more we get paid. So there are are we're a
Speaker 1: couple of newspaper reports that we're making that point and
Speaker 1: that we're making that point as as perhaps being the
Speaker 1: motive of why we raise so much money and why
Speaker 1: we invest so much money. And what they were missing,
Speaker 1: of course, was that every one of our investors has
Speaker 1: backed us with that money for the last three years,
Speaker 1: as to say, growing it from the initial two million
Speaker 1: pounds to now what is you know, one point seven
Speaker 1: one point eight billion pounds two point to two point
Speaker 1: three billion dollars um. And the reason why they've backed
Speaker 1: us is because part of the thesis from the get
Speaker 1: go was that there was a limited opportunity here to
Speaker 1: buy these assets. It's these great songs at attractive prices.
Speaker 1: I think that two years from now, three years from now,
Speaker 1: it won't be you know, you'll be buying these songs
Speaker 1: for um income, but you won't have the same exponential
Speaker 1: net asset value growth that you'll have based on what
Speaker 1: we've bought over the last two years and what will
Speaker 1: buy over the next two years um and there and
Speaker 1: all of our shareholders have understood that from the get go.
Speaker 1: It's been a part of those discussions from the get go,
Speaker 1: and it's why they continue to back us with with
Speaker 1: with each fundraise and allow us to continue to um
Speaker 1: uh invest in these great songs. Okay, So let's just
Speaker 1: understand there is him, there is hypnosis. It owns the songs.
Speaker 1: Who owns family? And how does family get paid? Yes,
Speaker 1: and let's just use round numbers. You raise a hundred million,
Speaker 1: you get one percent. That's a million dollars that goes
Speaker 1: to family. Is that distributed it? How do we who
Speaker 1: owns family? How you know? House family run? So I
Speaker 1: owned the family. I have some minor shareholders in it
Speaker 1: as well. And the family employs, as I say, the
Speaker 1: better part of eighty three people around the world with
Speaker 1: those fees. Right, So the fund has no expenses other
Speaker 1: than its legal fees and other than its brokers and
Speaker 1: professional advisors, one of which is the family. But the
Speaker 1: people those eighty three people that manage the fund around
Speaker 1: the manage the assets on behalf of the fund are
Speaker 1: paid for by the family. Okay, So now you raise
Speaker 1: on a million, you get a percentage that goes into
Speaker 1: the family. How much does the family make? What's the
Speaker 1: return to the family on regular income. Well, that's not
Speaker 1: a that isn't a matter of of of of of
Speaker 1: public income. But as as I say, you can do
Speaker 1: the sums. You know, we the family makes aximately ten
Speaker 1: million pounds a year, and out of that ten million
Speaker 1: pounds a year, it pays for offices, It pays for
Speaker 1: eighty three employees, It pays for the expenses of operating
Speaker 1: and managing these songs to the best of its ability.
Speaker 1: I guess what I'm asking. Let's assume I'm an investor. Okay,
Speaker 1: I know I'm paying you approximately one per cent on
Speaker 1: every hundred million. But since family is doing the work,
Speaker 1: so to speak, isn't there a raw percentage that I
Speaker 1: know that I will have to pay family every year?
Speaker 1: How does that work? Because an investor is gonna want
Speaker 1: to know. But all of that is spelled out, and
Speaker 1: we have a you know, one of the things about
Speaker 1: being a public company is that you have to have
Speaker 1: a prospectus. And the prospectus is a document that is
Speaker 1: a couple of hundred pages long, that is a legal
Speaker 1: document that literally spells out everything that there is to
Speaker 1: know from costs to you know, what the upside is,
Speaker 1: what the potential downside is, what the investment policy of
Speaker 1: the company is, what the borrowing policy of the company is.
Speaker 1: Literally every aspect of how we do business is spelled
Speaker 1: out in that two perspectives. And the perspectus is something
Speaker 1: that's updated on a yearly basis, and whatever changes are are,
Speaker 1: you know, to any of those policies goes into that document.
Speaker 1: So all of our shareholders are very very clear and
Speaker 1: very aware on a daily basis of exactly how we operate. Okay,
Speaker 1: so let me ask a different question. What is the
Speaker 1: present percentage? And who negotiates the change in the percentage?
Speaker 1: This is a better public record. Yeah, So the present
Speaker 1: percentages point eight percent of every penny raised, right, so
Speaker 1: you know, uh point zero eight percent, no point eight
Speaker 1: point eight of a per end of right, Um, so
Speaker 1: that is that's the current rate. Then we also have
Speaker 1: a performance fee. When that performance fee is ten percent
Speaker 1: over a ten percent hurdle, So that's something that you'd
Speaker 1: have to get your calculator out and and try and
Speaker 1: figure out what I think I think we underten it.
Speaker 1: But what you're saying is the performance fee is what
Speaker 1: family gets paid, the management fee, and potentially a manage
Speaker 1: the management fee is guaranteed, right, which is that how
Speaker 1: much is the percent? And that's the point eight percent.
Speaker 1: So you get paid not only when you not only
Speaker 1: when you raise it. You're getting paid point eight percent
Speaker 1: of the total fund every year. Correct. Okay, so you
Speaker 1: get the point eight then ten beyond ten percent of
Speaker 1: net also goes to family, correct. And that's so and
Speaker 1: and and on that. There's no guarantee because that's based
Speaker 1: on where the share prices for the entire month of March,
Speaker 1: which is the last month of of of our fiscal year.
Speaker 1: So depending on what the average weighted share prices during
Speaker 1: that entire month, we might make a performance fee. We
Speaker 1: might not. If we've raised money, we won't make a
Speaker 1: performance fee because when you raise money, the share price
Speaker 1: goes down because there are shares that are being offered
Speaker 1: at at at at a discount for people to come
Speaker 1: in and and and and invest more money. So, because
Speaker 1: of the fact that we've been so acquisitive um and
Speaker 1: because that's been the focus, the performance fee is is
Speaker 1: something that's been a very minor part of our world
Speaker 1: so far. Okay, So let's just go back for those
Speaker 1: you know and make it very basic. Let's assume, for
Speaker 1: the sake of round numbers, hypnosis generates a hundred million
Speaker 1: dollars in a year. That is not how family gets paid.
Speaker 1: Family gets paid the point eight family gets paid the
Speaker 1: point eight percent, and if you're doing well, the stock
Speaker 1: price will go up and then you'll get the ten
Speaker 1: percent beyond the ten percent. Correct. That is roughly accurate
Speaker 1: and simple terms. Okay, So if the stock price does
Speaker 1: not go up, family does not get paid beyond the
Speaker 1: point eight percent of total funds raised. Correct in order
Speaker 1: for us, in order for us to get paid a
Speaker 1: performance fee, we need to have the stock price out. Okay.
Speaker 1: So let's assume I you want to raise money. Are
Speaker 1: you raising you know, there's different ways. Is it all
Speaker 1: part of the same company. Is it a separate fund?
Speaker 1: How does that go when you raise additional funds? It's
Speaker 1: all part of the same company. There is no there
Speaker 1: is no fund one, fund two, fund three. It's all
Speaker 1: a public company. It's all all trades under the ticker
Speaker 1: of song S O n G, and it's all one company. Now,
Speaker 1: there are instances where you may without getting complicated, where
Speaker 1: you may raise money as a C share rather than
Speaker 1: an ordinary share, and then that C share, once it's
Speaker 1: fully invested, would then be merged into the ordinary shares.
Speaker 1: So that can happen at different times depending on on
Speaker 1: what the circumstances of the fundraise are. But in general,
Speaker 1: the way to the correct way to look at it
Speaker 1: is it's all one company. So let's assume, for the
Speaker 1: sake of discussion, you want to raise a hundred million.
Speaker 1: He who makes that decision, and b do the shareholders
Speaker 1: have to approve it? I make that decision, and then
Speaker 1: that in in a conjunction with my advisers, which are
Speaker 1: in general my brokers. And my brokers are JP Oregon,
Speaker 1: the Royal Bank of Canada, and an English company called
Speaker 1: N plus one Singer, which is the company that brought
Speaker 1: us to the stock market. And then I go out
Speaker 1: and I speak to all of our investors and they
Speaker 1: have a choice of how much they want to put in.
Speaker 1: So the the investors can't stop us from raising money.
Speaker 1: But if they but they certainly can choose not to
Speaker 1: put money in in that latest fundraise. Okay, but theoretically
Speaker 1: they could be they could see it as being somewhat
Speaker 1: diluted relative to the stock market. If you raise more
Speaker 1: money when you go out and you do that raise,
Speaker 1: you're you're right that people come in at a strike rate, right,
Speaker 1: and that strike rate is based on what the NAV
Speaker 1: is of the company net asset value is of the
Speaker 1: company at that moment in time. So the current um
Speaker 1: uh NAV of the company is teen pence and change.
Speaker 1: The current share price of the company is about a
Speaker 1: hundred and twenty three pence, so we're trading at a
Speaker 1: premium of about four or five percent. And if we
Speaker 1: were to issue new shares tomorrow and we issued some
Speaker 1: new shares a small amount of new shares last week
Speaker 1: as an example, then those shares were issued at one
Speaker 1: pound eighteen and people came in. And because of the
Speaker 1: fact that we're taking this money and investing it in
Speaker 1: more assets, no one is diluted because the capt market
Speaker 1: cap of the company grows at the same time with
Speaker 1: the investment. So it's not like you're taking a hundred
Speaker 1: million dollars or a hundred million pounds and you're spending
Speaker 1: it on overheads that don't increase the value of the company.
Speaker 1: You're spending it on assets that do increase the value
Speaker 1: of the company, so there is no dilution. So, as
Speaker 1: you mentioned earlier, one of the good things about publishing,
Speaker 1: especially with some of these like Onic Acts of the
Speaker 1: seventies thereafter, they actually own the publishing. So you've got
Speaker 1: great acts, you've got a hundred and fifty acts, but
Speaker 1: there's a huge number of people out there who still
Speaker 1: own their publishing. How does Hypnosis Hypnosis by what's available
Speaker 1: or does at some point does Hypnosis close its fund
Speaker 1: and say close its organization and we're only managing X number. Well,
Speaker 1: there's certainly a ceiling to our growth, but that ceiling
Speaker 1: is driven by what I referred to as the third
Speaker 1: key factor in what I wanted to achieve with Hypnosis,
Speaker 1: which is that I wanted to take that traditional publishing
Speaker 1: and replace it with song management. Right now, in order
Speaker 1: to be an effective song management er, there's obviously a
Speaker 1: ceiling on on what you can do. So we currently
Speaker 1: own sixty thousand songs. Over five thousand of those songs
Speaker 1: are number one songs, Over fifteen thousand of them are
Speaker 1: Top ten songs, over forty thousand them are top forty songs,
Speaker 1: and the rest are the ones that that that that
Speaker 1: came with them in in word two point two, as
Speaker 1: I say billion or so dollars invested in the next
Speaker 1: two years, I expect to be somewhere around the five
Speaker 1: or six billion dollar mark invested, and I expect to
Speaker 1: grow the fund from the hundred sixty three thousand songs
Speaker 1: that it is today to about a hundred and twenty
Speaker 1: five thousand to a hundred and fifty thousand songs. At
Speaker 1: that point, I will also have grown the active management
Speaker 1: team to about two hundred people, so that we stay
Speaker 1: on that less than a thousand songs per person um.
Speaker 1: And at that point you know whether it's two two
Speaker 1: hundred and fifty people, whether it's a hundred hundred and
Speaker 1: fifty thousand songs. I think that that is the real
Speaker 1: ceiling on being a song management company, because I don't
Speaker 1: think you can manage more than two fifty people. I
Speaker 1: don't think that you can manage more than fifty thousand
Speaker 1: songs with the sort of responsibility that I want to
Speaker 1: manage songs equally well. Coinciding with that same two and
Speaker 1: a half two to two and a half year period,
Speaker 1: I think that the true value of streaming will be
Speaker 1: reflected in the song that the data that you buy
Speaker 1: these songs on and I think at that point, you know,
Speaker 1: there'll be a lot of people that want access into
Speaker 1: this space. I don't think that there'll be a lot
Speaker 1: of access left. I think that there's a lot of
Speaker 1: pipeline out there today, whether it's for me, whether it's
Speaker 1: for Primary Wave, whether it's for Around Hill, whether it's
Speaker 1: for all of you know, KK are these other companies
Speaker 1: BMG that are are are looking to buy as well.
Speaker 1: I think there's more than enough pipeline to go around
Speaker 1: for everybody. Everyone has their own relationships. But I think
Speaker 1: that at a certain point there will be a lot
Speaker 1: of other people wanting to enter space. There won't be
Speaker 1: a lot of of of action left in the space,
Speaker 1: and the multiples will really explode because people will want
Speaker 1: to pay very very high prices to get their hands
Speaker 1: on these assets. And I'm just to be clear, I'm
Speaker 1: never a seller. You know, people like Larry Mistell, they buy,
Speaker 1: they sell, that's the business that that that they're in.
Speaker 1: We don't sell. We're and and we've been very very
Speaker 1: clear with our investors from the get go, and it's
Speaker 1: the reason why I did this as a public vehicle,
Speaker 1: because I never want to turn around. I don't know
Speaker 1: how Larry rationalizes it when he talks to someone like
Speaker 1: Stevie Nicks that you know, he might be selling her
Speaker 1: catalog in two years time. But I never want to
Speaker 1: be in a position where I'm looking someone like Neil
Speaker 1: Young in the I and say that, you know, guess what,
Speaker 1: We've just sold your catalog. So the reason to do
Speaker 1: this is a public company is because effectively the capital
Speaker 1: is permanent, whereas private equity money has five year terms,
Speaker 1: ten year terms, you know, and and at that point
Speaker 1: you have to to to sell and and you know,
Speaker 1: I never want to be in that position. And I've
Speaker 1: even gone to the extent in terms of protecting my
Speaker 1: integrity with the songwriter where if for any reason, our
Speaker 1: shareholders should ever want to sell, or if our shareholders
Speaker 1: should ever want to get rid of me, they have
Speaker 1: to sell the catalog to me, because my relationship is
Speaker 1: with the artists and the songwriters and the producers that
Speaker 1: have allowed me to become the custodian of of of
Speaker 1: of these great works. Um, and that's an important part
Speaker 1: of what we do. Okay, So you know you really
Speaker 1: went to my next question. So getting to some stock
Speaker 1: market issues, I would assume A the company has no debt.
Speaker 1: B it's traded on the stock exchange. See could they
Speaker 1: get rid of you in family D. Could someone come
Speaker 1: in and buy all the stock and essentially own the
Speaker 1: company and run it their way. So in terms of
Speaker 1: of A yes, we're a public company on the stock
Speaker 1: market as are saying, we're a foot see two fifty company,
Speaker 1: one of the highest yielders on the index. And of
Speaker 1: course with that success having given our shareholders of total
Speaker 1: return over the last three years, return over the last year. UM,
Speaker 1: you know, we're looked upon very very kindly, particularly in
Speaker 1: a pandemic environment. UM. We do have debt because our
Speaker 1: prospectives allows us to lever our assets bytent um. And
Speaker 1: that's because our investors want to get paid their dividends UH,
Speaker 1: and they want to to basically by using leverage, get
Speaker 1: even higher dividends and even higher total returns. So the
Speaker 1: leverage is something that is agreed at thirty percent and
Speaker 1: we have a great UH consortium of of of lenders
Speaker 1: led by JP Morgan and City National Bank that do
Speaker 1: that BOB for us UM. And then in terms of
Speaker 1: of of the family I have a ten year agreement
Speaker 1: as the founder of of of both sides. I have
Speaker 1: a ten year agreement with the fund. That agreement rolls
Speaker 1: over UM and I can only you know, we can
Speaker 1: never only ever be removed for cause UM. As I
Speaker 1: mentioned before, we have an administrator that handles all the
Speaker 1: money for the fund that is an independent administrator. We
Speaker 1: never touch or see any of the fund's money. UM.
Speaker 1: We just manage the the assets and the buying of
Speaker 1: of of the assets. I have a board of directors
Speaker 1: that is five people strong, that is led by a
Speaker 1: guy called Andrew Such that a corporate governance specialist, but
Speaker 1: that includes people like Paul Berger who's the former head
Speaker 1: of Sony UK and Sony Europe, was also the head
Speaker 1: at one time of Sony Canada, Sylvia Coleman who was
Speaker 1: his deputy at Sony UK and Sony Europe. Andrew Wilkinson
Speaker 1: who was the business manager along with Prince Rupert Lowenstein
Speaker 1: of the Rolling Stones and Pink Floyd Um and then
Speaker 1: another guy who's a private equity government specialist called Simon Holden.
Speaker 1: And those people obviously are there to hold my feet
Speaker 1: to the fire and make sure that all of the
Speaker 1: boxes are ticked properly and that both corporate governance and
Speaker 1: compliance is adhered to at all times. I'm also surrounded
Speaker 1: by my brokers at JP Morgan and plus one singer
Speaker 1: in the Royal Bank of Canada that are also there
Speaker 1: to protect shareholders as well as to guide me in
Speaker 1: my dealings with shareholders. Um so it's a very very
Speaker 1: robust situation. And then as I say, you know what
Speaker 1: what you know? One of the things that the the
Speaker 1: financial community understands is that whatever the asset is, whether
Speaker 1: it's in the case of hypno us as songs and
Speaker 1: music that's created by artists and songwriters and producers, or
Speaker 1: whether it's something else, the key component is do you
Speaker 1: or don't you have access right and they understand that
Speaker 1: that access is quite often based on integrity and the
Speaker 1: relationships that someone has built over a long period of time.
Speaker 1: So it was very easy for me to be able
Speaker 1: to prevail upon those investors and uh, you know, create
Speaker 1: a deal whereby should our you know, investors ever want
Speaker 1: to get out of the fund? You know, it's very
Speaker 1: easy for them in a in an investment trust because
Speaker 1: they can get out the shares are very liquid and
Speaker 1: someone else will replace them the next day. But if
Speaker 1: for whatever reason. If we decide that the company should
Speaker 1: not be a public company anymore, then the only person
Speaker 1: that these assets can be sold to Army UM unless again,
Speaker 1: unless I'm fired for for cause, and I'm never going
Speaker 1: to put myself in a position having built all this
Speaker 1: just just I understand you talk about the tenure rollover.
Speaker 1: Are you talking about you, Merk or Family? And just
Speaker 1: the other question being theoretically, I'm not saying it's going
Speaker 1: to happen. Could someone come along and buy up all
Speaker 1: the assets so effectively they have control or is there
Speaker 1: some kind of voting structure or something that makes it
Speaker 1: that that can't happen. So when I talk about the
Speaker 1: Family and Mark were effectively one and the same, because
Speaker 1: the company is my company with the exception of a
Speaker 1: few minor shareholders, and therefore the contract that I have
Speaker 1: with the fund is through the Family Music Limited as
Speaker 1: my operating company. UM. In terms of of you know,
Speaker 1: any company that's on the stock market could be the
Speaker 1: subject of a hostile takeover this, you know that, and
Speaker 1: that's something that of course shareholders would have to vote on,
Speaker 1: and uh, you know, there's there's always the chance when
Speaker 1: you're on the on the public market that even though
Speaker 1: something like that is remote, there's always a possibility that
Speaker 1: it could happen. Okay, Now, just telling about the landscape
Speaker 1: in general. What are the new opportunities in sync and
Speaker 1: what are the new opportunities relative to collection in general,
Speaker 1: and where is the focus of your managers? So the
Speaker 1: focus is very much on getting more out of these
Speaker 1: great songs, and getting more out of them in many,
Speaker 1: many different ways. So you know, we own the great
Speaker 1: Al Jackson's catalog, and when we bought Al Jackson's catalog,
Speaker 1: it was making predictable, reliable income of four grand a year.
Speaker 1: But you know, of that income was concentrated on one song,
Speaker 1: Al Green's Let's Stay Together and as there probably no
Speaker 1: Al jack and as the drummer and Booker T and
Speaker 1: the MG's had an incredible career between nineteen sixty two
Speaker 1: and when he died in nineteen seventy five, where he
Speaker 1: wrote you know thirteen or fourteen of the most important
Speaker 1: soul pop classics, not only Let's Stay Together, but still
Speaker 1: in Love with You and call Me for Al Green
Speaker 1: plus seven or eight of his other biggest songs he wrote, uh,
Speaker 1: you know Booker Team, the MGS, Green Onions plus most
Speaker 1: of their big records, plus getting royalties on big records
Speaker 1: by Bill Withers and Otis Redding and many many others.
Speaker 1: So of the concentration of this four grand is on
Speaker 1: one song, Let's Stay Together, which just tells you what
Speaker 1: I was, you know, a great example of what I
Speaker 1: was saying before about these uh you know, big companies
Speaker 1: that have twenty thousand songs per person, they don't have
Speaker 1: the ability to actively manage. They're just taking incoming requests.
Speaker 1: So in the year and a half that we've owned
Speaker 1: the catalog, we've gone from four hundred grand a year
Speaker 1: to six hundred grand a year, so we've grown the
Speaker 1: earnings by a third. But crucially in doing that, we've
Speaker 1: taken the earnings of Let's Stay Together from of the
Speaker 1: overall number to less than fifty percent of the overall number.
Speaker 1: And the remaining is now having put green onions in
Speaker 1: about ten different movies, it's putting Call Me in a
Speaker 1: TV commercial, it's putting Still in Love with You in
Speaker 1: a movie, a TV commercial, and also having John Legend
Speaker 1: interpolated in a new song on his last album that
Speaker 1: was top ten all over the world that we owned
Speaker 1: of the new song because of the interpolation, so everyone
Speaker 1: is focused on on on you know, how to you know,
Speaker 1: we basically operate every song on its own p anal
Speaker 1: as if it was its own business, not to institutionalize it,
Speaker 1: but basically to give a starting point to a conversation
Speaker 1: about whether or not we think the song is performing optimally,
Speaker 1: and in most cases really to guilt people into going
Speaker 1: hold on a set. That song is way better than that.
Speaker 1: We should be doing way better than that with that song,
Speaker 1: and it gives that kind of impetus for people to
Speaker 1: go out and do something with it. So, you know,
Speaker 1: when we look at the Blondie catalog that we acquired
Speaker 1: a little more than a year ago, you know when
Speaker 1: Blondie started, and you've written two really important pieces over
Speaker 1: the last ten days or so on TikTok that everyone
Speaker 1: in the music business should read. Because these new opportunities,
Speaker 1: whether it's TikTok, whether it's Peloton, whether it's Thriller, you know,
Speaker 1: these are are are big opportunities. One because there's massive
Speaker 1: consumption taking place, and too because it's new income. These
Speaker 1: are not income streams that are in the data on
Speaker 1: which you're buying these catalogs. So it's real value add
Speaker 1: from the get go. So when when when we uh
Speaker 1: signed Blondie, they didn't have a TikTok page. Amy Thompson,
Speaker 1: who's the chief catalog officer, got very very excited obviously
Speaker 1: about Debbie Harry being the icon that she is and
Speaker 1: Christine and Debbie being the incredible songwriters that they are.
Speaker 1: They started a campaign to create Blondie's TikTok page. They
Speaker 1: put Heart of Glass up there, and you know, very
Speaker 1: soon after that, Miley Cyrus covered Heart of Glass. That
Speaker 1: gave us an opportunity to bring Debbie and Miley together
Speaker 1: and create some you know photos that looked like Debbie
Speaker 1: and Miley, you know, Miley of and Debbie of nine
Speaker 1: together having a good time in a club that you know,
Speaker 1: quote unquote went viral. And you know, from last October
Speaker 1: until the very moment, Heart of Glass hasn't been out
Speaker 1: of Spotify's viral charts, right and and and you know,
Speaker 1: I think some at last count, you know, Blonde you've
Speaker 1: had over a million participants on their TikTok channel. Um,
Speaker 1: the same thing is happening with Nile Rodgers. We went
Speaker 1: out and took everybody dance the Great chic song, UM,
Speaker 1: and we made a new version of it with uh
Speaker 1: DJ Cedric Gervais and the Sound of Franklin with Nile featured,
Speaker 1: uh you know, playing his guitar part, and that's becoming
Speaker 1: a hit all over again. And you know, literally came
Speaker 1: out in last I think October, and every week the
Speaker 1: streams are bigger on it, and the TikTok numbers are
Speaker 1: bigger on it. So it's just really about, you know,
Speaker 1: what makes us different. I don't know if you know
Speaker 1: the statistic, but the Royal Bank of Canada, who as
Speaker 1: I mentioned, is one of our brokers, UM, they put
Speaker 1: out a comparison chart last year in July when we
Speaker 1: released our fiscal numbers for Mark thirty, the same day
Speaker 1: that Warner I p oed, and they did a comparison
Speaker 1: between the two companies. And at that point, Warner Chapel
Speaker 1: had done six hundred forty million dollars in their fiscal year.
Speaker 1: We had done ninety million dollars in our fiscal year,
Speaker 1: so we did approximately twelve percent of Warner's numbers. They
Speaker 1: did it on one point four million songs. We did
Speaker 1: it at the time on thirteen thousand songs, so we
Speaker 1: did twelve percent of the revenue on less than one
Speaker 1: percent of the songs. Their songs were putting out. Our
Speaker 1: songs were putting out six thousand, two hundred and eighty
Speaker 1: dollars per song. Their songs were putting out a hundred
Speaker 1: and seventy five dollars per song. And that's not because
Speaker 1: we're better than they are or we're smarter than they are,
Speaker 1: quite the opposite. As I said before, there's great people
Speaker 1: working in those companies. It's purely because we're structured to
Speaker 1: be able to have the bandwidth, to be able to
Speaker 1: actively manage these songs, to do song management rather than
Speaker 1: just collect passive requests. Mark, you're a force of nature
Speaker 1: and I'm very impressed. You certainly know your business and
Speaker 1: the business at larger You can pull these names statistics
Speaker 1: right out of your butt very easily. So I want
Speaker 1: to thank you so much for taking this time to
Speaker 1: illuminate about your history and hypnosis. I think people have
Speaker 1: a much better understanding of what's going on. Thanks again,
Speaker 1: it's my pleasure, Bob. Thank you, and please keep writing
Speaker 1: about the music that you love, because when you do,
Speaker 1: I think you're the best there is. Well, thank you
Speaker 1: so much. Until next time, this is Bob left sex