AWAL Nation: The inside story on Kobalt's recorded music empire

AWAL Nation: The inside story on Kobalt's recorded music empire

As Sony agrees to pay $430m for Kobalt's recorded music division, here's a chance to revisit our feature on AWAL from April 2019...

First acquired by Kobalt in 2011, AWAL has morphed from a digital distro into one of the most progressive companies around. Music Week meets Lonny Olinick, Paul Hitchman and Alison Donald at their riverside London offices to get the inside track on an industry revolution...

The view from the rooftop at AWAL’s London HQ is spectacular.

Wearing a contented smile, Alison Donald guides Music Week around the terrace, bathed in Friday morning sunshine, pointing out her favourite corners. There’s the stage where Freya Ridings recently played, and here’s where Donald likes to enjoy a moment’s quiet.

Formerly co-president at Columbia, Donald arrived in 2017, as head of creative across AWAL and parent company Kobalt’s recordings and publishing arms. She’s practically giddy to be there.

“For me, it was about whether I wanted to feel part of the future or not,” she says. “I love the transformation technology has allowed, the appetite for the business is fantastic and it’s great being able to empower artists.” Donald will repeatedly revel in the absence of pressure to “find the hit, find the hit” throughout our interview.

Downstairs, Lonny Olinick, AWAL’s Los Angeles-based CEO, recorded music, and president Paul Hitchman quickly make clear that every member of the company’s workforce shares Donald’s boundless enthusiasm. It seems the view inside AWAL is every bit as spectacular as from the roof.

“This culture is unique, every single person is here because they want to make the industry better for artists,” offers Olinick, holding eye contact. “That is something I believe in so deeply that it motivates me every single day.”

Previously of RCA and BMG, Olinick joined Kobalt in 2016, and began in his new role in January 2018. Hitchman has been involved since 2012: Kobalt’s maverick founder Willard Ahdritz (see box, page 20) purchased AWAL and brought him in as managing director of the new label services business. Back then, Ahdritz was plotting a recorded music revolution, now team AWAL are taking a moment to reflect on the story so far.

“It’s easy to say things are going really well for us,” says Olinick with a smile. “It looks like we’ll do $100 million in revenue in this fiscal year, which is up five times from two years ago. We just had five songs on the BBC Radio 1 playlist and three songs on Top 40 radio in the US. For a company like ours, no one else is doing that.”

His softly-spoken demeanour muffles the bullishness, but only slightly. “We have the right strategy at the right time,” he continues. “We’ve been building for seven years, we’ve seen where the market is going and realised that a services-based model where you don’t trade on what you can deliver as an artist is the model that works.”

Ahdritz grouped Kobalt’s recorded music business under AWAL in March 2018 with a $150m investment. Its offering covers a full range of services, including an artist-facing app, while allowing acts to own their copyrights. The performer’s rights share is weighted in the talent’s favour too, while AWAL’s tiered system is designed to give artists what they want, when they need it.

Kobalt’s latest financial results higlighted 50% growth for AWAL year-on-year, and Olinick promises further investment, yet some in the industry have questioned the sustainability of the model, while there are concerns over a lack of profitability.

Even so, AWAL’s leaders believe that, right now, we’re witnessing “a sea change among artists” and say they’re the one company positioned to deliver everything today’s acts need.

“We’re not looking to be a small company, we consider ourselves a major record company and just like they have diverse rosters, we want to have the best of all genres,” says Olinick. “We want to do everything, but we want to do everything well.”

Hitchman talks up Kobalt and AWAL’s community and education work, as well as its hunger to work with artists who share their “independence of spirit”. Using Madison Beer, Gerry Cinnamon and Little Simz as examples, proudly states, “we have independently minded artists across every genre”.

As far as OCC figures are concerned Freya Ridings’ Lost Without You (694,429 sales) and Lauv’s Like Me Better (395,843) are among AWAL’s biggest hits, while Lauv is currently in the Top 10 with Troye Sivan collaboration I’m So Tired. Lauv is AWAL’s flagship streaming artist, with a global total of 2.2 billion.

Further success stories range from Apple sync sensation Cosmo Sheldrake and tastemakers’ favourite Rex Orange County, to Nick Cave and The Wombats, while AWAL is announcing new signings Millie Turner and B-Unique this week. The vibe coming from AWAL HQ during our visit and subsequent interviews with a selection of its partners very much suggests that the time is now for the company.

In 2019, says AWAL’s GM, UK & International Paul Trueman, the team really can offer a viable alternative route for artists. “The proliferation of artist and label services offerings is a very large one,” he explains. “Over the last three years, we’ve really honed in on what our strategy is and how we can stand out in the market as the genuine, independent alternative for artists at any stage.”

AWAL’s ethos and ultra-modern, tech-savvy approach don’t so much provoke debate as question decades of music business tradition. “Sometimes people ask, ‘What’s the point of AWAL?’” the CEO offers. Prompts don’t come much better, so, guided by Olinick, Hitchman and Donald, we journey into its nerve centre…

Lots of music companies talk about being global, how is your approach different?

Alison Donald: “Kobalt’s publishing has always been global with just one roster, that was the ethos when AWAL started. We live in a digital world now and you don’t know where things are going to come from. It’s crazy how much territorialism goes on in other companies, whereas here it is genuinely a global company.”

Paul Hitchman: “We swerve all the politics that come with territorial rosters and priorities and we view the world as one: one company, one team, one roster. We’re very flexible and we go where the action is. We’re able to maximise opportunity in every territory.”

Lonny Olinick: “Before, physical records being distributed took a certain amount of time and radio was the only thing that mattered. It still does, but now a song can go from Switzerland to Germany, to the UK to China in a week. If you don’t have teams that have motivations to work any repertoire, you miss opportunities. We’re structured like the market is structured. It’s a globalised market. It doesn’t mean you don’t have to understand local press or radio, you have to think globally and translate that into a local plan.”

How does the world perceive AWAL?

PH: “We’ve established a reputation as being a home for the best new exciting talent, the best breaking artists. We’ve worked very hard at that and been very selective. That reputation is firmly established with DSPs and the media. Tom Misch, Bruno Major, Blanaevon, Little Simz, Rex Orange County, Lauv… so many are coming through and breaking, that’s one reputation we’ve definitely established. Beyond that, the principles and ethics of Kobalt are invested in AWAL too: transparency, fairness, service to the artist.”

AD: “It’s the same as in any A&R team, you’re trying to do best in class basically. We’re able to serve a very wide variety, which reflects how music is today. Seeing AWAL beside some of these artists shows the choice artists have now and the independence of spirit that’s out there. I think they like the alignment, we enable them to achieve as much as they want to. It’s absolutely music first.”

Your roster really is varied…

AD: “So are playlists! We don’t have to funnel it into one thing of, ‘This has to be a big hit’, because what is a hit now? We’re about quality and music and if the music is great then it will travel and get its opportunity. You never know where that fire is going to be lit, whether it’s a sync or somebody picking it up in the Philippines. Bruno Major had a fantastic sell-out tour of Asia that was all booked off his AWAL app and the analytics. That’s mindblowing to me, someone like Bruno Major who you wouldn’t say is a household name, having 3,500 people singing along in Jakarta.”

LO: “Ider are in the Philippines now, it’s one of their first markets. Through the data, we see a market reacting and go to places we wouldn’t have considered going to as one of the first five promo trips an artist takes. People are excited about that. They see the data and think, ‘Wow, there are going to be real people who care’. That shows the globalisation of everything we’re doing.”

How do you define success for artists?

LO: “There’s a weird connotation of what success is in music. It used to be that being signed was the definition of success. Is signing away your rights a good thing? Better to be an independent artist who has a real partner to support them. We work with every artist to define their version of success. That could be 500m streams, 200m streams, a sold out tour… It’s not our job to give bland parameters; we put a plan in place to help them achieve what they want. That’s why we have the platform, so artists see traction. It’s about their vision, plus our expertise.”

Does it worry you when artists such as Ray Blk and Sam Fender stop working with you and move into the major system?

LO: “Not at all. We have a lot of artists and the objective is not to keep every single one we sign. If we do our job well, the ones that make sense for us to keep, stay. We’re continuing with Lauv, Bruno Major, Rex, Madison… we’re seeing so many of them stay. We don’t spend a lot of time thinking about everyone else, we think about what we can do to deliver the best service. Part of creating a model where you have freedom is letting people exercise it. The other world is, ‘I sign you and you have no freedom for that period because you have a long term contract’. That’s not what we’re trying to create here, we’re trying to create a world that is better for artists.”

AD: “When I realised that Sam Fender and his songs were at a level where there was a lot of interest around him and he was hotly pursued, we could say ‘OK, if that’s the path you choose then great, what about publishing?’ And we now publish Sam, it’s win-win. When we don’t sign the publishing, there’s neighbouring rights or AWAL and we’re still able to be involved.”

PH: “Being known as the place where new artists can grow and break, that’s what we want, that attracts more artists.”

Do artists need to be more open to modernity to work with you?

AD: “It’s the most transformative time I’ve ever seen in music and I was doing it when we went from analogue to digital. The power has shifted to the artist and they have a choice to be able to have a sustainable career and make a living and that’s an incredible thing. Music will only be better for that, it’s broader, there’s more opportunity, the niche is back. The amount of music a few years ago was much narrower, you had to fit a certain criteria.”

LO: “What’s amazing about this industry is people see income from day one, they get streaming and they have an audience and they have choice, because they have money flowing in. Before you had to do a deal because you couldn’t survive if you didn’t. Artists have to progress, they have power that couldn’t have existed before and that changes the way they think about everything they do. It’s completely transformed the way every artist thinks about the market.”

How does your technology help artists?

PH: “We’re giving the artists the power to understand their music to make informed decisions and develop their career with tools and support that have never existed before, really. You always had to rely on someone else to understand or even access the market. Now artists can develop their careers on their own terms.”

How does AWAL approach streaming?

PH: “First of all, you have to be careful not to think of streaming in isolation. You have to think about how it fits into your broader marketing drivers and campaign. It’s about how you build an audience and an expectation about new music through touring, press… that then builds your audience on streaming.”

LO: “It’s about having value to bring into streaming providers, the reason we have great relationships is because we go in with amazing music with a story to tell that audiences can benefit from. We want artists who have careers, not songs, streaming is a critical part of that, but not the only part.”

You had success with The Wombats in 2018. What’s your policy towards more established acts?

PH: “To me, The Wombats are at the top of their game. You can talk about established or whatever the terminology is, but you’re talking about an artist that’s very relevant to an audience. They know what they want, where they’re going and their audience, and they needed to plug into a partner that could translate that into marketing and global support. It’s amazing the change that happens, we’ve seen it with Nick Cave, You Me At Six, Pet Shop Boys, once they realise they actually own their record, a subtle transformation happens where they realise they’re a partner

How do you balance tech skills with a human touch?

LO: “You don’t ever convince anyone to sign with you based on numbers. It’s important to be a music fan, to understand, relate and care. The process Alison and her team go through is about getting to know the person and the music, it’s nothing to do with the data.”

AD: “Music for the most part is still made by humans [laughs] and it’s about making that emotional connection. We’re deep into artist development on new projects like Millie Turner and Jordan Mackampa. We’re doing a lot of artist development, it’s basically what we do here! It’s lovely to be able to do it from a very ground level upwards without the intense, ‘Where’s the hit?’ question.”

LO: “We do have a larger platform part of the business where we use data, but we still have our A&R team looking at everything that comes in. We say no to 90% of what comes in because it doesn’t meet the standards we’ve set. As those artists grow, it becomes about the human connection.”

So, you’re building understanding with artists?

PH: “It takes a while to understand what an artist is about sometimes. The more you build trust and understanding, that puts you in a good position to really help them. Rather than try and impose some idea around having a hit, you begin to build trust and understanding that you can then move forward.”

LO: “The greatest artist success stories are overnight successes that were built over the course of a number of years. We’ve tried to change the signing being the event, we are supporting all along the way, giving more and more as the music and audience dictate. There isn’t this huge jump that has to happen where an artist goes from being nothing to something overnight, instead we’re helping artists step by step. If you go to radio and a song doesn’t work, you still have people that care about your music, we just really approach it as an artist development company. We don’t just put our money or people into these projects, we put our souls into them, we really do.”

PH: “There’s clearly a challenge with technology, to maximise opportunities and collect every last penny transparently and that’s why Kobalt invests so much money into technology. We are, you could say, uniquely equipped to be the modern music company, which is music and technology combined for the benefit of artists.”

Finally, what does the future hold financially?

LO: “We have really healthy ambitions, so I would be surprised if we didn’t continue to really push the envelope. We’re building the best team in the business. We could be profitable today if we wanted to, we choose to invest in our growth. Being in the position where you could be profitable today is enviable. We could prioritise it today but we don’t because we see such enormous opportunities ahead to be the most important independent company in the business.”

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