Transparency is a big deal for Kobalt: a key part of the music publishing firm’s pitch to songwriters is its promise to not just track and collect more digital royalties for them, but to ensure they get faster, clearer information on those payments.
Transparency and Google? Well, that’s a matter of some debate – think YouTube’s NDAs with collecting societies – which is why Google Ventures leading a $60m funding round for Kobalt is intriguing news.
Announced this morning, the round also included participation from tech veteran Michael Dell’s investment firm, although it had chipped in to Kobalt’s previous $66m of funding. Kobalt says that the new round will help it ramp up its global expansion, with Latin America and Asia firmly on its radar to build on its growth in the US and UK – it claims to represent 40% of the top 100 songs in both – and mainland Europe.
“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,” said Kobalt boss Willard Ahdritz.
Although Google Ventures’ managing partner Bill Maris sees Kobalt as a tech company. “We don’t see them as a music industry company. We look at them as a technology company – but it happens to be in the music industry,” he said.
For Google Ventures, the music industry represents a big-data problem ripe to be solved by technology. “Only in the music industry is it okay to wait for a year to get paid, and not know who your music got sold to, and how much it even sold. The company is on a mission to bring trust and transparency to the payment process for artists, which doesn’t really exist right now,” said Maris.
“It’s adding a layer of trust and transparency that hasn’t existed here before, and showing that maybe this isn’t a dying industry: maybe it’s just one that had a terrible problem.”
You don’t need us to tell you that Google’s fiercest critics within the music industry see something else as their most terrible problem. Yet that doesn’t make Google Ventures’ decision to invest in a music rights company any less interesting.
Let’s see if the backing really can fuel Kobalt’s mission, articulated by Ahdritz: “I estimate that $2bn in streaming dollars were paid out in the last 12 months. But the pipes are broken, and they need to be fixed. Songwriters and creators need to be represented and paid correctly.”