In what may come as a conciliatory gesture from Google, after it had frayed nerves of independent artists over its highly secretive licensing deals, Google’s subsidiary, Google Ventures, has funded $60 million along with Michael Dell, in the London headquartered music publishing company, Kobalt.
Founded in 2000 by its CEO Willard Ahdritz, Kobalt, which is an independent administrative publishing company-cum-label service provider, offers services to independent artists. Kobalt’s services help artists keep a track of all the royalties that get earned through streaming or usage of their songs on any site around the World Wide Web. Kobalt’s sophisticated trackers scour the payment systems around the world and determine the amount of royalties receivable by artists who have hired Kobalt for its services.
Kobalt’s funding comes at a crucial time, when there is a significant trust gap between tech companies and songwriters/musicians. Independent musicians, especially, are struggling against changing habits of music consumers, who now prefer streaming and playing songs online, instead of purchasing physical records.
While the more prominent artists have managed to survive the changing dynamics of revenue model in the music industry, by doing more concerts and hiking ticket prices, smaller independent artists have faced majority of the brunt. Moreover, on earlier occasions, technologies such as torrent and other peer-to-peer sharing softwares also had not helped the cause of musicians’ bittersweet relationship with technology.
Kobalt’s business model is also not exploitative as it does not elicit parasitic fees from artists’ earnings. Kobalt does not have an ad valorem charging mechanism and instead charges only one flat fee after it has determined when and where the artist’s music is being played and how much they need to be paid. It is then clear that Kobalt is a technology company that enables certain specific services for musicians.
It is not to be considered as a music company; however, all that is mere semantics. The more important thing is that Kobalt has shown the way how technology companies can come together and alleviate musician’s fear of technology owing to their past experiences with innovations such as peer to peer sharing, streaming services, online piracy and easy availability of downloadable links through Google’s search results.
Hopefully, Kobalt, with this recent round of funding from Google Ventures, will now be able to bridge an important gap between the tech sector and the music world.
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