kobalt strategy babeonideas blog

700,000 income streams for one music single? This tech startup idea, Kobalt will make every artiste filthy rich

Artistes make money – or so we all believe.

We see their flashy lifestyles and we crave it – maybe not all of us but at least most people do.

Sport cars, mansions, pent houses, Rolexes, diamonds, designer apparels, you name it, they seem to have it all.

But do they really? While some global stars do, a whole lot more are not as rich as they wish to be. Artistes always feel cheated or shortchanged one way or the other despite labels saying otherwise.

With many reasons for this despite artiste songs being played all over the world, one of the major ones is a broken music system which delays the rights of artistes because of an opaque music industry.

One technology startup set for world dominance says it has what it takes to make every artists filthy rich, – or best put, get what they deserve because, indeed they are being screwed.

Its name is Kobalt.

 

What is Kobalt?

Kobalt is a technology driven music platform that serves as an artiste’s instant cash point machine enabling them receive every penny of airplay from their songs, even if it’s only a single by utilising its proprietary software that sniffs out every commercial platform where an artiste song is played across the world and collects royalties from the artiste from each of those spots.

Kobalt is an innovative tech startup idea providing transparency and accountability to an industry which tells an artiste what it earns instead of showing them the big picture of their earnings.

Startup: Kobalt

Founded: 2000

Founder(s)

Willard Ahdritz

Founders’ Inspiration

A former artiste and label owner himself, while working as a consultant drawing up a Business Plan for British Airways low cost carrier, Go, Ahdritz was amused at the way the global giant tier its pricing by using a massive database and offering different prices for different seats. On the spot, he decided to do this with music to stop artists from waiting years to get their money and to let them know who should be paying them.

 

Headquarters: New York, New York

 

Vision: To transform the way the global music business is run by creating new pipelines for accountability and transparency of industry returns. (imagined by us).

 

Website: http://www.kobaltmusic.com

 

The Pitch (The idea in 20 words)

Kobalt is an innovative music technology platform utilising data analytics to expand revenue sources for artistes and the music industry.

 

Industry

Digital Streaming, Data Analytics, Music Technology, Music Marketing Software

 

Strategy

  • Kobalt owns the world’s first data sensitive technology platform which allows artistes and songwriters firsthand knowledge of airplay on every existing platform globally from radio stations, TV stations, CD sales, streaming platforms, youtube videos, pirated CDs, film features, clubs parties, TV shows, adverts etc., totalling 700,000 revenue streams for one song.
  • To bring accountability and transparency to payments of artistes rights in the global music industry by granting them access to the black box of record label revenues, providing real time data of where every single is being played and by whom or what platform.
  • It serves as a platform to activate instant connections and payments between artistes and movie or TV show producers, showing money offered and providing the artiste an opportunity to accept or decline immediately.
  • Kobalt purchased digital distribution and label services AWAL, ‘Artists Without a Label’ putting itself directly in competition with giant labels by offering un-label artistes direct distribution.
  • AWAL enables global artistes understand their music territory interests through advanced data analytics and plan tours around it serving stars like Beck and Moby.
  • The startup charges 5% administration fees to its clients, far below the 20-30% charged by its competition.
  • Kobalt utilises proprietary software ProKlaim to detect song usage on youtube videos, monetising up to 1.5 billion video plays monthly.
  • On a daily basis, data identifiers for 400,000 copyrights are programmed into ProKlaim and its algorithm searches to detect music matches and charges advertising agencies or Youtube if the video is created by an individual user.

 

Revenue Model

Kobalt utilises high volume, low price approach to generating revenue by collecting royalties for over 600,000 songs for about 8,000 artistes in micro payments which return in fractions of pennies but become tangible with billions of real time transactions. The company also charges 5% administration fees to sign up clients.

 

Growth and Market prospects

Presently, Kobalt collects royalties for over 8,000 artistes worldwide across 100 territories. It counts superstars like Kelly Clarkson, Gwen Stefani, music producer, Dr. Luke and music publishers who hold copyrights to music and lyrics as clients. It has become the top independent music publisher in the UK and second to Sony in America.

It generates revenue from 400 million people for artistes and projects to do this through 1 billion people in 3 years.

 

Funding

Kobalt is funded by investors;

  • Series B: $16 million – June 2008
  • Series B: $40 – March 2013
  • Series C: $60 million – February 2015
  • Series D: $75 million – May 2017

Total Funding: $191 million

 

Investors

Kobalt has successfully raised investment funding from some of the best venture capital institutions including, Google Ventures. These investors include;

  • Google Ventures
  • Sparks Ventures
  • Balderton Capital
  • MSD Capital
  • Michael Dell

 

Future Strategy

It is creating the world’s first global digital collection society, AMRA to provide services to publishers and individual writers by being equipped with direct digital licensing deals and using Kobalt’s technology to communicate, translate data into format for thousands of revenue sources and efficient collect, process and account for billions of micro transactions.

 

Industry Insights

The music industry revenue has been at an all time low as digital disruptions take a bite off traditional revenue generation stream like CD sales. In 2016, global recorded music sales totaled $15.7 billion with digital revenue accounting for up to 50% of that growth according to reports by IFPI. Global music industry revenue has seen steady decline from $20.7 billion in 2005 to $15 billion in 2015. Digital streaming seems set to save the industry despite the fact that the profitability of most digital platforms is still distance away.

 

Disrupts

Kobalt is disrupting the global music industry by creating new pipelines for operations and administration by opening channels of opportunities for payment of artiste royalties and enforcing transparency and accountability in making returns to artistes.

 

Opportunity for Idea Creators

This is an opportunity for idea creators, to take advantage of but a very ingenious one by the way. To take on such an idea, a whole lot of chutzpah, brains and funding will suffice. Goodluck.

On the look out to create more value within this industry sector way should be;

  • Developers
  • Musicians
  • Industry Professionals
  • Music Labels
  • And any other crazy head who thinks and can, can make things happen

 

Kobalt is changing the way artistes are treated and paid in the music business, and also opening new inroads for publishers to make more money than the industry itself ever thought possible.

 

Now, that’s disruption. What can you do about it?

build an app or website babeonideas blog

And before you go, please do all or one of these three things;

 

  • Please leave us a comment. I will like to share in your thoughts and have a good conversation with you on this startup idea.
  • Click on the icons and share on social media. Somebody somewhere may need this information to move to the next level in life and that person may just be you, receiving a shared content.
  • Leave your email above. I will take you through my free starter course so you learn how to strategise for start-ups and get paid.

 

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