Nettwerk sells 30-year-old publishing catalogue to Kobalt investment fund

More than 18,000 songs developed and acquired by Nettwerk’s publishing division over the past 30 years have been bought by Kobalt Music Copyrights (KMC), MBW can reveal.

KMC is an independent investment fund established in 2011. It is advised and managed by Kobalt Capital Ltd – but operates as a separate entity to Kobalt Music Group.

The vast majority of copyrights owned by Nettwerk’s publishing company will now switch to KMC, and be administered by Kobalt.

MBW understands that developing songwriters signed by Nettwerk Publishing in the past 12-18 months remain outside the deal – and that these clients, plus all future publishing signings, will also be administered by Kobalt.

johan-ahlstrom“This is a perfect example of the calibre of talent we are investing in here at KMC.”

Johan Ahlstrom, Kobalt Music Copyrights

Johan Ahlstrom, CEO of KMC, stated “[This] is a perfect example of the caliber of talent we are investing in here at KMC and we are thrilled to be working with this impressive catalogue.”

Nettwerk Music Group was founded in 1984 by Terry McBride (pictured, main), Mark Jowett, Ric Arboit and Dan Fraser, operating across recorded music, management and publishing.

Over the subsequent three decades, its publishing catalogue has added valuable works by the likes of 10,000 Maniacs, Sinead O’Connor, Sarah McLachlan and Tasmin Archer.

Nettwerk boasts its own acquisitive credentials: in the past 12 months, it has snapped up the likes of Belgian indie label Megadisc, New York house specialist Maxi Records and a chunk of jazz/blues outfit Justin Time Records – as well as a publishing company born out of Roadrunner Records, Robot Of The Century.

Nettwerk CEO Terry McBride told MBW that the influx of cash from the KMC deal would allow his company to invest more in recorded music, at a time when the race to acquire publishing rights is getting increasingly competitive.

Willard“Terry has built a great company and I’m thrilled to welcome him and his team into the kobalt family.”

Willard Ahdritz, Kobalt

He said: “In a digital world where streaming has become the predominant way we consume music, it is important that our artists are partnered with the best technology company in the publishing space to see the full value of their creations. Kobalt simply is the best, and also the most transparent.”

Willard Ahdritz, Kobalt Founder and CEO, stated, “I am excited that Kobalt will be servicing KMC’s new acquisition of Nettwerk copyrights with so many great writers and works in their catalogue.

“Terry has built a great company and I’m thrilled to welcome him and his team into the Kobalt family.”

Outside of publishing, Nettwerk’s client roster includes Passenger, Guster, The Veils and Run River North (label) as well as Mike Posner and Father John Misty (management).

MBW caught up with Terry McBride to ask why he made the decision to sell to KMC – and how he feels about working with Kobalt as a partner…


TerryNettwerkWhy did you decide to sell the publishing catalogue?

For the last 30 years we’ve built this catalogue both organically and through acquisition – but there’s no doubt the acquisition end of things is becoming tougher and tougher.

You’ve got companies like BMG and others paying great multiples – [sums] that could pan out well for them in future, but don’t work for a smaller company like us [as a buyer of publishing assets] right now.

Why sell to Kobalt Music Copyrights?

We looked around and thought, in our minds, ‘Who really is the best publisher?’ As we move more into a performance and streaming model, with [those areas] as the majority of a publisher’s income, I think Kobalt is head and shoulders above everyone else.

That’s not just their transparency, but their ability to collect properly within this space. We are putting these writers and artists we’ve worked with for decades into a really good home.

“You’ve got companies like BMG and others paying great multiples – deals that could pan out well for them in future but don’t work for a smaller company like us [as a buyer] right now.”

My preference for the sake of the artists and writers was Kobalt from day one. The go-forward deal with the admin is exactly where we want to be too, because they’re the best there is.

When you’ve got the technology Kobalt has to track down streaming royalties and get direct reporting, it’s not caught up in the minutiae of some of the ways the [collection] societies go about it… with [digital] being the majority of income for our artists in the future maybe outside of sync, it’s where you want to be.

What drove the deal in your mind?

This is purely a smart strategic move. We’re still a very active publisher – we’ve signed maybe four different artists in the past month for masters and publishing. We’re keeping our whole TV and film division.

We’re a great publisher creatively and on the film & TV [sync] side of things, but we’re not so great at administration. That’s a tech business.

“The majority of revenues in streaming come from masters. Now, with a very healthy bank account, we can sign and acquire more recorded music.”

I don’t want 25 programmers here figuring that out, collecting those billions of pennies – especially when Kobalt is so great at it.

This is just a realisation of where the market’s going and who the best tech player is.

We’re seeing music copyright starting to gain value in the streaming age. Why not do a straight admin deal with Kobalt and hold on to the catalogue?

Simply put, the majority of the revenues within the streaming space come from the masters. Now, with a very healthy bank account, Nettwerk can sign more masters and acquire more [recorded] catalogue.

Strategically for us, there’s more of an obvious upside on the masters than there is on publishing. But I also think publishing will see an uplift, just not to the same extent.Music Business Worldwide

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