As digital music streaming continues to explode, it calls for a platform that can track the data generated from billions of clicks and collect royalties for artists. Kobalt, the independent music services company founded in 2000, has been focusing on such a platform since Paul McCartney took his music publishing interest from EMI to Kobalt back in 2012. Earlier this month, Kobalt announced that it raised $14M from Bill Maris, the founder and former CEO of Google Ventures, through his new venture capital fund Section 32. Back in February 2015, when Bill Maris still worked at Google Ventures, the prominent venture capitalist in tech led Series C round of $60M funding into the company. Now with his new firm, he made another bet in the digital music industry and joined Kobalt’s board of directors. The $14M funding was atop of Kobalt’s previous Series D round of financing and considered a second installment, marking the total amount to $89M at $789M post-money valuation.
Kobalt’s basic business model is to detect song play data more accurately by building up a big-data based platform so that they can collect royalties. Unlike traditional rights organizations like ASCAP (American Society of Composers, Authors and Publishers), Kobalt by using innovative technology has the capacity to hunt for royalties from both the biggest players and the fragmented small corners with more accuracy. It can sniff out not just from the original tracks but from tracks that have sampled them or repurposed elsewhere. “The royalty collection business has been stuck in the dark ages, and artists often have to wait for months or years to get paid for use of their work – if they get paid at all,” said Bill Maris. “Kobalt is the only company to have created a full multi-rights content management system to fix this broken business model.”
According to its website, today altogether Kobalt is now serving over 25,000 songwriters, 600 publishers, and 20,000 independent artists, including The Chainsmokers, Kelly Clarkson, Zayn Malik, Pitbull, Elvis Presley, Skrillex, Sam Smith. And it represents on average over 40% of the top 100 songs and albums in both the US and UK.
Ying Li is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current L.L.M. student at Harvard Law School (Class of 2018).