The price of a song … again and again

This new group has almost everything needed to make it in the music industry: a quirky name, experienced management, even a well-known Singer. Shame it does not have any decent tunes. The Hipgnosis Songs Fund is therefore raising £200m to buy music rights through a UK float led by broker N+1 Singer.

Songs are assets that can generate recurring income. The higher this is, the bigger the price will be. Ideally, a popular sentiment accompanies a popular tune. Walking on Sunshine, the soundtrack to upbeat moments in numerous adverts and films, sold for £10m in 2015. Ear-worm numbers that mention Christmas rack up fat royalties during the festive season.

David Bowie famously sold bonds tied to his work in 1997. Illegal copying later weakened faith in the earnings potential of music. Growth in streaming revenues now inspires bullishness.

A crop of catalogues have changed hands, including Carlin, rights holder to some Elvis numbers. This deal is estimated to have breached earnings multiples in the low teens. A song by guitar hero Carlos Santana fetched 17 times earnings last October according to auction site Royalty Exchange.

Hipgnosis covets tracks from across the decades. But Midia, a research firm, says older songs account for only a tenth of UK streaming revenues.

A mooted public listing of Universal Music could break all records. Noël Coward marvelled snobbily at the power of cheap music. These days, the more powerful the music, the pricier it will be. London, June 29