Kobalt Reports Strong 2018 Earnings, Revenues Grow 25%
Gross collections increased 30 percent to $494 million, with that number expected to top $600 million this year.
Kobalt Music Group is reporting strong results for the fiscal year ending June 30, 2018. The the independent rights management and publishing company's revenues increased by 25.3 percent year-over-year to $402.1 million, while its gross collections were up 30 percent to $494 million during the same time period. Gross profit increased 23.6 percent to $52.5 million and Kobalt's global employee headcount grew from 376 to 515.
Kobalt reported after-tax losses of $42.7 million, an increase of 29 percent over the previous year. Those come as a result of what the company terms “a conscious decision to prioritise growth through making strategic investments over short-term profitability.”
“We’re outpacing the industry in terms of growth,” said Kobalt founder and CEO Willard Ahdritz in a statement. “We’ve been laser-focused on building out the global team to support the rapidly growing music industry and setting up creators for success. We’ve established ourselves as the technology leader in the industry, and we are deeply investing in building innovative new products and services across the music ecosystem to super-serve our roster, across publishing, recordings, collections, neighbouring rights and synch. We are very excited by the rapid growth of AWAL, our recordings business, which achieved growth of over 50% in the last fiscal year and is anticipated to continue a similar growth rate this year. Through its unique multi-tiered model, AWAL is designed to serve artists at all stages of their careers on a scalable platform.”
AWAL was acquired by Kobalt in 2011 and offers independent artists label services to build their careers while retaining total ownership of their work. Some of the company’s most significant AWAL success stories last year included American singer-songwriter Lauv (2.2 billion global streams), Dutch DJ R3HAB (700 million streams), British singer-songwriter Rex Orange County (700 million streams) and musician-producer Tom Misch (400 million streams). Kobalt also signed several new label clients, including Danger Mouse’s 30th Century Records, and entered a strategic partnership with Glassnote Records, whose catalog includes Mumford & Sons and Childish Gambino.
Another growth area came with Kobalt's expansion of its Neighbouring Riots division to new territories, including first-ever payments from South Africa. That resulted in a 24 percent growth in revenue for the division year-over-year. The company also saw a boost from its AMRA digital music royalty-collection service, which grew overall revenue by 30 percent.
Kobalt also added a number of bold-faced artists to its publishing roster over the past year, including Childish Gambino, Enrique Iglesias, Marshmello and raggaeton singer Ozuna. Other publishing clients include Beck, Courtney Barnett, Zayn, Lorde and The Weeknd, while they boast legacy catalogues from the likes of Elvis Presley, Muddy Waters, Bob Marley, George Thorogood, and Lindsey Buckingham.
In December 2017, Kobalt purchased the SONGS Music Publishing catalog, with acquired songs such as Major Lazer’s “Lean On,” Mark Ronson’s “Uptown Funk” and The Weeknd's "Starboy" helping boost the company's revenue on the year.
“Our growth over the past couple years is largely attributed to this focus on the creators,” Ahdritz added. “No one is making more investments in building services and products to help creators, and we don’t see any end in sight for our growth. The next year will be even better and we look forward to further building out the new music industry structure creators and rights holders deserve.”
Kobalt was founded in 2000 and now serves over 25,000 songwriters, 600 publishers and 20,000 independent artists.