Kobalt Music Group, the music publishing and record labels service, just announced $US60 million (£40 million) in Series C funding led by Google Ventures, Google’s investment arm. MSD Capital, the private firm of Dell founder Michael S. Dell and his family, and MSDC Management are also behind the financing.
Kobalt put out a press release on Friday announcing the deal, which says the money will be used to support the company’s “technology innovations to provide artists and songwriters with the most transparent, efficient, and accurate royalty.” The round takes Kobalt’s total funding to $US126 million since it was founded in 2000.
Kobalt provides musicians and songwriters with royalties when music is streamed over websites such as Spotify. Industry figures who use the company include Beck, Foo Fighters, Maroon 5, and Paul McCartney. Kobalt offers services including creative output, brand partnerships, licensing, rights, distribution, and royalty statements. It’s massive. The company has been central to the issue of artist royalties — remember Taylor Swift pulling out of Spotify last year — and online piracy.
It’s likely the investment will mean it will soon become easier for the music industry to work with Google services such as YouTube (which launched its own music service, YouTube Music Key, last year) to measure plays and collect royalties.
In recent years, the music industry has struggled with the changing online landscape. Kobalt founder and CEO Willard Ahdritz commented on the situation, telling the Guardian: “Our investors are backing what I’ve always said from day one: we need trust between technology and music, because these are the technology people who are going to sell our products.” It’s all about trust and transparency, it seems.
The move also points towards the idea that Google is cosying up to the music industry amid claims it does too little to help prevent online piracy. Many in the industry are upset with Google because of complications over search engine rankings of piracy sites.
Above all, the Google Ventures investment marks a size able push into the sector. The likes of Apple (which has big plans on the music streaming front, following its acquisition of Beats and the hire of Radio 1 DJ Zane Lowe), Spotify, and WiMP/Tidal (which US rapper Jay-Z is buying) will no doubt be watching on to see what happens next.
Ahdritz sums it up nicely in the press release today: “The music industry is going through dynamic changes all around the world,” he says. “The migration to a global, digital business model in the music industry is accelerating.”
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