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Tag Archives: kobalt

Kobalt Music Group is driving the music industry to provide more transparency and faster royalty payments to musicians and challenging the traditional record labels and publishers with its own alternative service offerings that don’t take ownership of copyrights. Competition and market size are headwinds in its future growth, however, and the incumbents are thriving not dying. As I’ll outline in this final post of the Kobalt EC-1, its competitive edge rests in its administrative infrastructure and services for songwriters built on top of it.

This is Part IV of the Kobalt Music Group EC-1. Catch up on the prior posts in the series: Part I (founding story and overview), Part II (an operating system for the music industry), and Part III (music’s middle class and DIY stars).

Kobalt’s alternative to a record label, AWAL, is targeting a small but growing “middle class” of recording artists earning tens of thousands of dollars per year in royalties. But as I outlined in my last article, this business is sandwiched between the countless artists who make very little money, and the global superstars who are all owned by the big three labels. Revenue growth may be slow.

Kobalt’s publishing division, Kobalt Music Publishing, is in a stronger competitive position by comparison. Unlike recording artists, songwriters aren’t concerned with building fan followings and marketing themselves to consumers. Since the high end of the earning spectrum is lower for songwriters and the dynamics of fame on social media aren’t relevant to their careers, professional songwriters can be categorized in just the two camps of middle class and stars.

In each case, their core needs are:

  1. Administration of their royalties
  2. Matchmaking to find the right co-writers and to find the right recording artist to actually record (or “cut”) their song
  3. Pitching their songs for use in films, commercials, games, etc. (called sync licensing).

Here’s a closer look at this market opportunity — perhaps one of the most interesting areas of growth in the music industry today.

Songwriting’s middle class

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Image via Getty Images / NoSystem images

Read more: https://techcrunch.com/2019/09/26/kobalts-edge-in-changing-the-music-industry/

Tech startups want to destigmatize sex

Sex, despite being one of the most fundamental human experiences, is still one of those businesses that some advertisers reject, banks are hesitant to financially support and some investors don’t want to fund.

That’s TechCrunch’s Megan Rose Dickey discussing the rise of “sextech”, a movement among technologists and product designers to open up one of the most fundamental human experiences to technological innovation. Yet, the often puritanical nature of business means that while some innovations are widely received and lushly funded, other startups remain adrift, struggling to advertise and secure funding.

Megan talks with a range of founders and investors in the space, finding the positive stories along with a heap of frustrating ones. There is a lot more work to do here.

But in reality, it’s hard to say how big that market really is, Founders Fund Partner Cyan Banister, who has invested in a handful of sextech startups, tells TechCrunch.

“It’s hard to gauge and the reason why is these businesses aren’t capable of operating at the same scale a normal business could operate at,” Banister says. “They’re kind of cut off at the knees by not being able to advertise. They can’t be on Twitter, Facebook and Instagram in the way other businesses could… It’s hard to know how big these companies could be if we could change the social norms and stigmas associated with these products.”

Banister has invested in O.School using personal funds, and in Unbound via venture firm Founders Fund . Unbound, a sexual wellness startup for women, focuses on sex toys, accessories and jewelry that doubles as pleasure products. In December 2017, Unbound raised $2.7 million from Founders Fund, Slow Ventures and others.

“The objective has always been to take the category mainstream like Viagra,” Unbound CEO Polly Rodriguez tells TechCrunch.

How Kobalt is simplifying the killer complexities of the music industry

Extra Crunch media columnist Eric Peckham is back with the next part of his three-part EC-1 looking at music infrastructure startup Kobalt. In part one, Eric talked about how a former Swedish saxophonist built and grew what has become one of the most important music industry startups to arise from Europe since Spotify.

Read more: https://techcrunch.com/2019/09/14/sextech-kobalt-sales-efficiency-philanthropy-and-ethics-brexit-and-startup-growth-tactics/

Backed by over $200 million in VC funding, Kobalt is changing the way the music industry does business and putting more money into musicians’ pockets in the process.

In Part I of this series, I walked through the company’s founding story and its overall structure. There are two core theses that Kobalt bet on: 1) that the shift to digital music could transform the way royalties are tracked and paid, and 2) that music streaming will empower a growing middle class of DIY musicians who find success across countless niches.

How a Swedish saxophonist built Kobalt, the world’s next music unicorn

This article focuses on the complex way royalties flow through the industry and how Kobalt is restructuring that process (while Part III will focus on music’s middle class). The music industry runs on copyright administration and royalty collections. If the system breaks — if people lose track of where songs are being played and who is owed how much in royalties — everything halts.

Kobalt is as much a compliance tech company as it is a music company: it has built a quasi “operating system” to more accurately and quickly handle this using software and a centralized approach to collections, upending a broken, inefficient system so everything can run more smoothly and predictably on top of it. The big question is whether it can maintain its initial lead in doing this, however.

The business of a song

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Image via Getty Images / Mykyta Dolmatov

Read more: https://techcrunch.com/2019/09/11/how-kobalt-is-simplifying-the-killer-complexities-of-the-music-industry/

You may not have heard of Kobalt before, but you probably engage with the music it oversees every day, if not almost every hour. Combining a technology platform to better track ownership rights and royalties of songs with a new approach to representing musicians in their careers, Kobalt has risen from the ashes of the 2000 dot-com bubble to become a major player in the streaming music era. It is the leading alternative to incumbent music publishers (who represent songwriters) and is building a new model record label for the growing “middle class’ of musicians around the world who are stars within niche audiences.

Having predicted music’s digital upheaval early, Kobalt has taken off as streaming music has gone mainstream across the US, Europe, and East Asia. In the final quarter of last year, it represented the artists behind 38 of the top 100 songs on U.S. radio.

Along the way, it has secured more than $200 million in venture funding from investors like GV, Balderton, and Michael Dell, and its valuation was last pegged at $800 million. It confirmed in April that it is raising another $100 million to boot. Kobalt Music Group now employs over 700 people in 14 offices, and GV partner Avid Larizadeh Duggan even left her firm to become Kobalt’s COO.

How did a Swedish saxophonist from the 1980s transform into a leading entrepreneur in music’s digital transformation? Why are top technology VCs pouring money into a company that represents a roster of musicians? And how has the rise of music streaming created an opening for Kobalt to architect a new approach to the way the industry works?

Gaining an understanding of Kobalt and its future prospects is a vehicle for understanding the massive change underway across the global music industry right now and the opportunities that is and isn’t creating for entrepreneurs.

This article is Part 1 of the Kobalt EC-1, focused on the company’s origin story and growth. Part 2 will look at the company’s journey to create a new model for representing songwriters and tracking their ownership interests through the complex world of music royalties. Part 3 will look at Kobalt’s thesis about the rise of a massive new middle class of popular musicians and the record label alternative it is scaling to serve them.

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Early lessons on the tough road of entrepreneurship

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Image via Kobalt Music

It’s tough to imagine a worse year to launch a music company than 2000. Willard Ahdritz, a Swede living in London, left his corporate consulting job and sold his home for £200,000 to fully commit to his idea of a startup collecting royalties for musicians. In hindsight, his timing was less than impeccable: he launched Kobalt just as Napster and music piracy exploded onto the mainstream and mere months before the dot-com crash would wipe out much of the technology industry.

The situation was dire, and even his main seed investor told him he was doomed once the market crashed. “Eating an egg and ham sandwich…have you heard this saying? The chicken is contributing but the pig is committed,” Ahdritz said when we first spoke this past April (he has an endless supply of sayings). “I believe in that — to lose is not an option.”

Entrepreneurial hardship though is something that Ahdritz had early experience with. Born in Örebro, a city of 100,000 people in the middle of Sweden, Ahdritz spent a lot of time as a kid playing in the woods, which also holding dual interests in music and engineering. The intersection of those two converged in the synthesizer revolution of early electronic music, and he was fascinated by bands like Kraftwerk.

Read more: https://techcrunch.com/2019/08/09/how-a-swedish-saxophonist-built-kobalt-the-worlds-next-music-unicorn/

The Kobalt EC-1: How a Swedish saxophonist built Kobalt, the world’s next music unicorn

My favorite pieces we host on Extra Crunch are our EC-1 series of in-depth profiles and analyses of high-flying, fascinating startups. We launched Extra Crunch with a multi-part series on Patreon, and then we covered augmented reality and Pokémon Go creator Niantic and gaming platform Roblox.

This week, Extra Crunch media columnist Eric Peckham launched the first part of his three-part EC-1 series looking at music “operating system” startup Kobalt. Kobalt is not perhaps a popular household name like Roblox, but it’s influence is heard pretty much every single time you listen to music. Kobalt is upending the traditional infrastructure to track music plays to capture royalties for artists, an industry that today still involves people literally walking into bars and writing down what’s playing. From that base, Kobalt wants to expand into services to empower the next-generation of stars and mid-market talent.

What I loved about this story is that not only is Kobalt completely rebuilding an otherwise stagnant industry, but its founder and CEO is also such a dynamic individual. Willard Ahdritz was a former saxophonist whose band was essentially abandoned by their music label — even while that label wouldn’t give up the economics that would allow the band to continue (some founders may have similar experiences with their venture investors). Ahdritz would eventually start his own music label called Telegram, and a bit later started Kobalt to solve the problems he kept running into on the music publishing side.

It’s been almost two decades, but today, Kobalt offers a suite of technologies and services and has its crosshairs on the big three labels — Universal, Sony, and Warner. It’s also raised a boatload of venture capital and is closing in on a unicorn valuation. Read the full story, learn more about this analytically fascinating business, and get ready for parts two and three coming soon.

Refer a friend to Extra Crunch

Read more: https://techcrunch.com/2019/08/10/kobalt-apple-and-smartwatches-hadoop-customer-support-and-social-work-and-ai/