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As music streaming continues to grow in ubiquity, a company\u00a0that\u2019s built a platform to collect royalties on music played across billions of streams is cashing in on the opportunity. Kobalt<\/a>, the European startup that has built technology and a platform\u00a0to collect music royalties by tracking when\u00a0even a\u00a0sample of a song is played\u00a0across multiple platforms, has raised another $75 million in funding. Made at a post-money valuation of $775 million, the money will be used to\u00a0continue expanding Kobalt\u2019s\u00a0platform to cover more streaming sources, and to add more artists and labels to the list it represents, said CEO Willard Ahdritz said in an interview.<\/p>\n Today that list is already pretty extensive. It covers\u00a025,000 songwriters, 600 publishers and 20,000 independent artists \u2014\u00a0working out to about 40 percent of the top 100 songs and albums in the U.S. and U.K. at any given time. Big names on\u00a0the list include\u00a0The Chainsmokers, Kelly Clarkson, Miles Davis, Dave Grohl, Dr Luke, Zayn Malik, Max Martin, Paul McCartney, Stevie Nicks, Pitbull, Elvis Presley, Skrillex and Sam Smith.<\/span><\/p>\n The funding round \u2014 a Series D \u2014 was led by Hearst Entertainment, with participation from previous investors Balderton and MSD, the investment firm for Michael Dell and his family. Prior to this, Kobalt had raised $60 million<\/a> led by Google Ventures, and $140 million<\/a>\u00a0from a consortium of investors.<\/p>\n The $60 million was its last equity round; the $140 million was part of a total of $153 million that the company has raised to help finance the second strand of its business,\u00a0label services where Kobalt either buys part or all of an artists\u2019 rights to help collect royalties on their behalf. (That licensing business was expanded in 2015 with Kobalt\u2019s acquisition of AMRA<\/a>, which works with the likes of Apple Music<\/a>\u00a0in licensing deals.)<\/p>\n This latest chapter in Kobalt\u2019s development comes at the same time that the digital music business is becoming increasingly important to the music industry.<\/p>\n Figures published last month<\/a> by the recording industry association the IFPI noted that digital music in 2016\u00a0accounted for 50 percent of all music revenues globally, its highest proportion ever, working out to $7.8 billion of $15.7 billion in overall revenues (physical sales accounted for $5.4 billion). At the end of 2016, there were 112 million users of paid music streaming subscriptions, a figure that\u00a0grew 60.4 percent and offset downloads, which declined by 20.5 percent, and physical revenues, which declined by 7.6 percent.<\/p>\n While services like Spotify, Pandora and SoundCloud have been developing their own analytics services for artists to monitor how their music is being consumed on those individual platforms, another unique selling point for Kobalt is that it\u2019s providing this kind of tracking in real time across a number of proprietary services, and it\u2019s doing so not just for full tracks, but for samples and other fragments that get\u00a0played.<\/p>\n Today, the company tracks music plays in twenty of the top digital streaming providing platforms globally, including services like Spotify, Apple Music and SoundCloud. The plan is to add another 20 sources in the next six months, Ahdritz said.<\/p>\n \u201cA big hit today has 4 billion micro-transactions,\u201d he said. \u201cNow that we are connecting the rest of the world in streaming, we will be able to track\u00a010 billion transactions.\u201d<\/span><\/p>\n Kobalt does not disclose just how much an artist \u2014 be it a blockbuster name or a smaller player \u2014 can make using its platform, but it notes that it provides revenue uplifts of\u00a025 percent compared to industry standards, simply from being able to track when a something is played.<\/p>\n While one clear endpoint to that tracking is to be able to collect royalties, it also provides a big data play, where Kobalt is able to monitor how and when and where particular tracks are played to help artists figure out, for example, how to better plan live performances and to figure out where would be the place place for exclusive releases. One factoid Ahdritz mentioned to me: some\u00a030 percent to 40 percent of publishing revenues today are coming not from audio streaming sites, but from YouTube.<\/span><\/p>\n For Hearst Entertainment, this is a progression on a bigger plan for the company to move into other forms\u00a0of publishing, particularly in B2B.<\/p>\n \u201cPart\u00a0of what I\u2019ve been trying to do is looking at investments\u00a0in entertain\u00a0for the next generation, and that focus has been entertainment\u00a0for millennials and and Gen Z,\u201d said Neeraj Khemlani, president of Hearst Entertainment. \u201cG<\/span>iven that music is growing all because of streaming. As we looked at music and wondered, what is the ideal b2b opportunity, we met Williard and loved what Kobalt is doing.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2016\/02\/o92a1586-mov-07_42_46_17-still001.jpg?w=680\")
As music streaming continues to grow in ubiquity, a company\u00a0that’s built a platform to collect royalties on music played across billions of streams is cashing in on the opportunity. Kobalt, the European startup that has built technology and a platform\u00a0to collect music royalties by tracking when\u00a0even a\u00a0sample of a song is played\u00a0across multiple platforms, has raised another $75… Read More<\/a><\/p>\n\n<\/img><\/a>
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