Kobalt revenues up 35% to £440m

Kobalt revenues up 35% to £440m

Kobalt has reported soaring revenues of $543 million (£439.7m) for the 12 months to June 2019 – an increase of 35.1% year-on-year.

The company’s gross collections across its label, publishing rights representation businesses totalled $616.4m (£499.3m) over the same period, an increase of 25% year-on-year.

Total losses widened from $39m (£31.5m) to $56.7m (£45.8m). Gross profit was up 34.1% year-on-year to $70.4m (£56.8m).

Kobalt is forecasting $700m (£567.1m) in gross collections for the fiscal period ending June 30, 2020.

The company expanded significantly in the previous fiscal year, increasing staff headcount from 515 to 652. Kobalt recently opened up in France to further support its global roster.

“This past year was another banner year of growth,” said Willard Ahdritz, founder & chairman of Kobalt. “In addition, we successfully scaled our business to support our clients in the next phase of Kobalt.

“For the past 20 years, Kobalt has worked to create a better music industry for artists and songwriters. Our pace and focus on more transparency, less confusion, and being tech and talent-friendly has had a major impact on the industry. Kobalt’s mission is stronger than ever and we are aiming for future growth and profitability. I’m very excited to continue to serve our clients with the global strength of our staff, systems, technology and partners.”

“In the past three years, Kobalt has grown significantly and succeeded in many areas,” said Laurent Hubert, CEO of Kobalt. “With any company that grows at our pace to compete with highly entrenched competitors, it’s remarkable what we’ve been able to achieve. As an agent of change in the publishing industry to help songwriters and help take artists to the top of the charts via our recordings arm, AWAL, we still know there’s more to do. There’s opportunities to be more efficient and provide more value. I’m excited about this next phase of profitable growth, while continuing to offer the best global services to talent and partners.”

Kobalt has taken many proactive steps to ensure our staff’s safety and well-being in this uncertain time

Laurent Hubert

In the last fiscal year, AWAL revenue grew 86% to $111.5m (£90.3m) off the back of streaming and physical consumption for artists including Kim Petras, Steve Lacy, Cold War Kids, Girl in Red, Nick Cave & The Bad Seeds, Gerry Cinnamon and Little Simz. In addition, the company has since helped Lauv achieve five billion streams – Kobalt describes the hitmaker as the world’s biggest independent artist. 

Kobalt was consistently a top three music publisher in terms of chart share in the US marketplace for four consecutive quarters. The division grew revenue over 28% to $405.3m (£328.1m) in the past fiscal year.

The publishing division represents Childish Gambino, Dave Grohl, Enrique Iglesias, Finneas, Lorde, Zayn Malik, Bob Marley, Marshmello, Max Martin, Paul McCartney, Elvis Presley, The Weeknd, and many more. Last year, Kobalt signed Gunna, Will.i.am, Norah Jones, Slowthai, Tim James, Lil Pump, Anuel AA, among others.

Kobalt’s leadership also discussed measures to protect artists, songwriters and staff during the Covid-19 epidemic.

Ahdritz said: “The music industry is entering some uncertain times as a result of the coronavirus crisis, which is being felt around the industry, especially in live music. As much as I believed large parts of the industry would transform into digital 20 years ago, I’m confident that our company - and others that have truly invested in tech, systems and global remote workforces - are well-prepared to continue to support artists, songwriters and partners during this time of crisis. Our hearts go out to the songwriters, artists and all those hard-working people behind the scenes whose livelihoods are severely disrupted right now especially in the live music industry and we all hope for a swift recovery.”

Hubert added: “Kobalt has taken many proactive steps to ensure our staff’s safety and well-being in this uncertain time. I’m pleased to say that we transitioned smoothly to an all remote workforce back on March 10. While not intentional for this exact scenario, our unique global setup that allows our teams and creatives to leverage tech remotely has us well-prepared. It did not take us long to get our operations up and running to support all of our clients. Kobalt is well-capitalized and we will continue to invest in staff’s well-being and our client services to achieve our long-term business goals.”

The Kobalt Neighbouring Rights (KNR) division continues to grow its roster, which includes Ariana Grande, A$AP Rocky, The Chainsmokers, Dua Lipa, Lewis Capaldi, Lil Wayne, Sia and Young Thug. Last year, KNR represented 70% of the UK’s most played artists. The division continued to grow its roster with Cardi B, Rag 'n' Bone Man, Lauv, Dean Lewis, Yungblud, among others, joining as clients.

The two music royalty funds managed by Kobalt Capital Limied, owned by institutional and private investors and administered by Kobalt, delivered “solid returns on historic acquisitions, advances, and new investments”, according to the company. The first fund (launched in 2011) and the second fund (launched 2017) have made investments totaling $1.1 billion (£891m) to date.

Global digital collection society AMRA grew overall revenue by 46% in the past fiscal year to $65.6m (£53.1m).

AMRA ingested and processed 15.3 billion pieces of usage data, which is up 42% over 2018, and automatically matched 5.2 million, which is a 97% increase year-on-year.

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