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Can the Digital Music problem be solved, Kobalt thinks so and has the funds to prove it?

New York City’s Kobalt Music has man­aged to raise a total of $126 mil­lion dol­lars, thanks to the recent­ly acquired $60 mil­lion from Google Ven­tures and Michael Dell’s MSD Cap­i­tal. Wait there’s more, a fur­ther $153 mil­lion the com­pa­ny raised to finance a sec­ond part of its busi­ness; buy­ing part or all of an artists’ rights to help col­lect roy­al­ties on their behalf. Kobalt devel­oped a pro­pri­etary tech­nol­o­gy that fig­ures out how to allo­cate all the roy­al­ties due musi­cians at a much greater speed than is cus­tom­ary. This is a big deal since musi­cians have had to wait a great deal of time, we’re talk­ing years for pay­ments. Just think of all the dig­i­tal plat­forms capa­ble of play­ing music.

Since the incep­tion of dig­i­tal music, the indus­try has been calami­tous about how artist are paid and how much. With Kobalt’s algo­rithms keep­ing track, the process has become much more effi­cient. The CEO, Willard Ahdritz says the fund­ing will be used “to scale the orga­ni­za­tion, dou­ble the tech team to increase our speed”. Ahdritz also explains the pub­lish­ing side of the busi­ness is prof­itable. Over­all, the com­pa­ny has been grow­ing rev­enues at a rate of 40% annu­al­ly for the last four years, and is pro­ject­ing gross annu­al rev­enues of $260 mil­lion for the end of June 2015.

This is a crit­i­cal time for the dig­i­tal music indus­try espe­cial­ly since stream­ing has become more pop­u­lar than down­load­ing. Kobalt has cre­at­ed a sophis­ti­cat­ed big data dash­board that allows you to see the num­ber of plays across a slew of out­lets like YouTube, Spo­ti­fy, Sound­cloud, thanks to their tag­ging sys­tem. There­by let­ting the artist know how much they are owed. Kobalt says more than 8,000 song­writ­ers and over 500 pub­lish­ing com­pa­nies use its plat­form today. Cur­rent­ly they are cov­er­ing about 400 mil­lion peo­ple and would like to get that num­ber up to 1.5 bil­lion in 6 months.

Bill Maris, of Google Ven­tures, in a state­ment. “The company’s sol­id exe­cu­tion over the past decade cou­pled with Willard’s unwa­ver­ing pas­sion and com­mit­ment made this an attrac­tive invest­ment for us. Kobalt’s com­mit­ment to trust, trans­paren­cy and tech­nol­o­gy has posi­tioned it as one of the most inno­v­a­tive brands in media today.” Dell Inc. has been pro­vid­ing the tech­nol­o­gy for Kobalt this whole time, so it just made sense for MSD Cap­i­tal to jump on board.
Just to let all you read­ing know back in 2013, Kobalt was val­ued at $250 mil­lion. So per­haps with all that mon­ey flow­ing through the arter­ies at Kobalt, sub­mit­ting a resume, might not hurt.

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