Willard Ahdritz
Founder/CEO, Kobalt Music Group
A key buyer for publishing assets looks to build out label services on a global scale
As a disruptor of the traditional music publishing business model, Kobalt Music Group and its leader Willard Ahdritz still get on the nerves of the old-guard industry players. They like to complain that Kobalt picks up clients by giving away services and by charging a below-market-rate 5% administration fee. But according to the company’s most recent annual financial statement for the year ended June 30, 2012, Kobalt’s gross profit percentage is 11.6%, which can be translated as its average administration fee.
Kobalt’s core strength is its flexibility in offering various publishing models in an evolving music business, from established artists who own their catalogs to those looking to handle their own recordings.
Its acquisition of AWAL also allows the company to provide digital distribution, for, as the acronym implies, artists without a label. The bottom line is, if you’re an artist or manager who doesn’t want to be signed to a label or a publisher, Kobalt has a division that can provide whatever services you require.
So, as Ahdritz points out, Kobalt is building “different tiers” of services for artists, and expanding its operations globally on a market-by-market basis. “We are rolling out our distribution service to Australia and expanding AWAL into the U.S.,” he says. In other words, just as Kobalt’s music publishing operation was designed for direct integration into the global marketplace, look for the company to build out its other capabilities in the same way.
But that’s not all that Kobalt is planning. Affiliate company Kobalt Capital launched recently to begin buying music publishing, while parent Kobalt Music Group serves as adviser on the acquisitions and manages the assets. In the last year, that arrangement has acquired the publishing or a stake in the catalogs of Steve Winwood, Lindsey Buckingham and the B-52s.
