Backed by over $200 million in VC funding, Kobalt is altering the way in which the music trade does enterprise and placing more cash into musicians’ pockets within the course of.
In Part I of this sequence, I walked via the corporate’s founding story and its total construction. There are two core theses that Kobalt wager on: 1) that the shift to digital music may remodel the way in which royalties are tracked and paid, and a pair of) that music streaming will empower a rising center class of DIY musicians who discover success throughout numerous niches.
This article focuses on the complicated manner royalties circulate via the trade and the way Kobalt is restructuring that course of (whereas Part III will concentrate on music’s center class). The music trade runs on copyright administration and royalty collections. If the system breaks — if folks lose observe of the place songs are being performed and who’s owed how a lot in royalties — every part halts.
Kobalt is as a lot a compliance tech firm as it’s a music firm: it has constructed a quasi “operating system” to extra precisely and shortly deal with this utilizing software program and a centralized method to collections, upending a damaged, inefficient system so every part can run extra easily and predictably on high of it. The massive query is whether or not it could preserve its preliminary lead in doing this, nevertheless.
The enterprise of a music
Image through Getty Images / Mykyta Dolmatov
