Kobalt in Wired: Majors and collection societies get a rough ride

Kobalt’s much-anticipated cover feature in the UK edition of Wired has arrived. As you could probably have predicted, it’s bound to please Willard Ahdritz and his company – and very likely infuriate his competitors.

The promise of the teaser ad run in Wired last month – which posited that Kobalt was “the company that saved the music industry” – has been toned down a touch.

Now Wired report on “How data saved the music business”, but it really amounts to much the same thing.

The ‘cover star’ of the issue (pictured) is actually Skrillex, but Kobalt’s name gets a good splash across the bottom of the cover.

Skrillex, a client of Kobalt’s, gives his own approval of the company, telling Wired that the firm’s “activity feed is awesome”.

“It’s happening in real time,” he says. “You used to get this ugly PDF and it took months to okay.”

Here’s five key parts of the huge article, which you can read in full by downloading Wired via iTunes through here.

  • Wired calls Kobalt ‘the most important music company you’ve never heard of’, crediting Ahdritz and his team with creating ‘the most remarkable web portal in music business history’. ‘It allows songwriters to view every single instance when their work is streamed on Deezer or Spotify, broadcast on radio, sold as a CD, featured in a film, played in a pub, pirated by a fan in a YouTube video, sampled in a TV show or included in a Champions League ad,’ writes Wired.
  • Tying Ahdritz to his Scandinavian roots, Wired writes that the Kobalt founder has been ‘Viking-like in his assault on the big major labels, publishers and collection societies’. “The music industry is historically opaque,” says the exec. “There is a lot of fear amongst artists that they’re not getting paid. I tell them: ‘You are right. You’re getting screwed.'”
  • Wired claims that songwriters signed to big music publishers often wait up to two years to get their money after it’s been collected. It writes: ‘They end up paying out half their gross royalties to the middle men – collection societies. And if they ask to see the books, they’re handed computer printouts that list a bulk number and little else…. Ahdritz says this is not because [major] labels and publishers are devious – it’s because they’re inept.’
  • Ahdritz’s background gets a mention: Wired reports that the exec launched Telegram Records in Sweden in 1987, and has a background as both a jazz saxophonist and a coder in the Swedish army. After selling his label to Warner Music Sweden, he quit the music business in 1993 and earnt an MBA at New York’s Stern School Of Business. He worked for LEK Consulting, a mergers and acquisitions giant, and had the idea for Kobalt when helping draw up a business plan for British Airway’s low-cost carrier Go.
  • After describing Kobalt’s ability to report on each source of micro-payments for a single song – an estimated 700,000 revenue streams, according to Ahdritz – Wired writes: ‘With the traditional model, the collection societies and territorial publishers gather these royalties and they pay it to the label or artist’s publishers. When they in turn pass on the artist’s share, the digital heap may only appear as a single revenue line. It’s not that the labels or publishers are acting dishonestly; it’s that they don’t possess the tools to track it and break the usage down. Money can fall through the gaps.’

IMG_0155Music Business Worldwide

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