The Kobalt EC-1, Half II
Backed by over $200 million in VC funding, Kobalt is altering the way in which the music business does enterprise and placing more cash into musicians’ pockets within the course of.
In Half I of this collection, I walked by way of the corporate’s founding story and its total construction. There are two core theses that Kobalt wager on: 1) that the shift to digital music might rework the way in which royalties are tracked and paid, and a couple of) that music streaming will empower a rising center class of DIY musicians who discover success throughout numerous niches.
This text focuses on the complicated manner royalties move by way of the business and the way Kobalt is restructuring that course of (whereas Half III will deal with music’s center class). The music business runs on copyright administration and royalty collections. If the system breaks — if individuals lose observe of the place songs are being performed and who’s owed how a lot in royalties — every little thing halts.
Kobalt is as a lot a compliance tech firm as it’s a music firm: it has constructed a quasi “working system” to extra precisely and shortly deal with this utilizing software program and a centralized strategy to collections, upending a damaged, inefficient system so every little thing can run extra easily and predictably on high of it. The massive query is whether or not it may possibly preserve its preliminary lead in doing this, nevertheless.