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News October 27, 2015

Hot Seat: Willard Ahdritz – Kobalt Music Group

When Kobalt Music Group opened for business in 2000, its founder Willard Ahdritz set about his mission to change the game of music publishing and copyright administration. The Swedish-born executive brought business savvy from the financial services industry and applied it to the music biz. He grew his company steadily, organically. Kobalt built a solid reputation in the artist community and fast caught the eye of its rivals. A string of innovative project launches in recent years has made the independent company a major player in the global music biz.

Earlier this month, the group activated its Kobalt Portal – an offering which brings Ahdritz closer to accomplishing his mission. The interactive offering allows its clients to see usage data and royalties earned on YouTube user-generated content and watch the associated video from their portal – and Ahdritz is confident it will unlock “significant” cash for its clients. The portal plays to Kobalt’s mantra of greater transparency, increased control, and better returns for its clients – who include Paul McCartney, Dave Grohl and Goyte. Within two years, Kobalt hopes to monetise 1.5 billion consumers compared to 300 million today.

Earlier this year, Kobalt struck a partnership with Swedish collection society STIM that created a one-stop shop for Kobalt’s European rights for digital music services. The group’s Kobalt Label Services division had a monster hit on its hand with Nick Cave & The Bad Seeds latest set Push The Sky Away, which peaked at No. 1 in Australia, No. 3 in the U.K. and was a hit across the world.

Kobalt currently administers more than 300,000 copyrights worldwide on behalf of over 1,500 content holders. In 2013, Kobalt Music Group was recognized as the first ASCAP Publishing Administrator of the Year and was named Independent Publisher of the Year at Britain’s Music Week Awards for the fifth consecutive year. TMN recently caught up with NYC-based Ahdritz.

Why have you launched the Kobalt Portal?

It is a big, big step forward. We expect digital revenues for Kobalt’s rights owners to increase significantly as a direct result of our new technology integration. In our opinion, we believe there is up to 10% of publishing income that is not tagged or distributed. We’re starting with the YouTube originated content here in the United States. For the first time in industry, clients can see that usage data revenues flowing through. This, in my opinion, will just multiply over the coming years when this is rolled out. Ten percent of our client’s income… it’s a significant contribution.

It’s important for our industry that we have this technology working. Today, the music industry is also a technology industry. And that is an extremely important message. At Midem, I said the target was to reach 1.5 (billion consumers).We are now launching a very important piece of that puzzle. 

When will this technology apply to other digital service providers?
We will roll this out with all the key service providers in the 6 to 9 months both in the U.S. and Europe and the rest of the world. The rest of the world will be more ad hoc, given people’s willingness for new players.

Where is Australia on that timeline?

The Australian artists that we represent, they see (the royalties through the portal) today. For the Australian market, we are having discussions and we’ll see. I don’t want to set a time period for now. Our (priority) is all the key services in the key territories.

What were the major challenges setting this up?

Number one, there were challenges from a technical point of view to tag that data from both sides. You have digital service providers putting in the time and effort and hard work to tag the data, and then from our point of view to match and tag around those huge data volumes. That is a big task, this technology integration. And number 2, there’s also making sure from a legal point of view that the right agreements are in place. And obviously to make sure that you’re running a 100% transparent, open platform and delivering this to clients. It’s not an easy task to put all this together.

Were the technology partners on this receptive to what you were doing?

YouTube walked right through. They have invested in this to make it work and I think it’s paying off for them. They’re going to see some great feedback from our clients, big and small, seeing the money flowing; seeing that you can make money out of those services. A tech company needs to start to invest and bother that this needs to work. I know multi-billion dollar companies that have one person dealing with publishers on a global scale. Can you imagine Ikea having one person dealing with 50% of procurement for all shelves on a global level? You need to have a message that there’s two sides that need to have an interest. The market will solve that.

Music is a very important part of these services. The very big services need music to drive their business. I think there’s a lot of money (to capture). We believe we’ll see a significant step-up in royalty streams for our clients because of this. What is also important is our clients get a feeling that they’re in control. You would like to know, where is my money and how much am I making it? For some people it will be smaller revenues, but they will see it’s being properly licensed.

How’s business at Kobalt in general?

I’m very pleased we managed to get Nick Cave to No. 1 in his home country on the “label services” side. Kobalt Label Services is really taking off. We’re rolling out the new services. We’re very pleased with what Simon Moor and his team have achieved (with the Australian company). Our neighbouring rights business, we are shocking people how much money we are collecting out there. There’s another 2 billion dollars in revenue flowing around. What people think, 2 billion isn’t that much. But that’s 2 billion that goes to the bottom line. It is 2 billion of profit, because this is money that is distributed.

Follow @LarsBrandle on Twitter.


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