Direct Investments in Rights-Tech Companies Hit $95 Million in First Half of 2017

RightsTech companies have raised nearly $95 million in direct investment so far in 2017, according to data compiled by the RightsTech Project, kicked off by Dubset Media’s $4 million Series A round in February.

That figure does not include outright acquisitions, such as Blackstone Capital’s acquisition of performance rights organization SESAC in January, which included the rights management technology platform Rumblefish along with the Harry Fox Agency.

The bulk of the rights-tech investments this year is accounted for by Kobalt Music’s $75 million Series D raise in May, led by Hearst Entertainment, bringing its total capitalization to more than $100 million to date. As with Blackstone’s acquisition of SESAC, much of the investment in Kobalt is premised on the perceived asset value of the rights it controls. But part of the valuation reflects Kobalt’s ability to monetize those rights using its technology platform.

Growing investor interest in the direct monetization of rights is also reflected in Royalty Exchange’s $6.4 million convertible note offering, which more than doubled the company’s original target of $3 million. Denver-based Royalty Exchange allows artists to offer interest in their future royalty stream to investors through the sale of royalty-backed assets.

Other notable raises this year include blockchain-based rights registry Binded (formerly Blockai), which raised $950,000 in June, bringing its total to date to $1.5 million, and music rights payment platform Stem, which raised $8 million.

Company Description Amount raised Investors
Kobalt Music rights and publishing platform $75 million Hearst Entertainment, Balderton Capital, MSD Capital
Dubset DJ remix rights clearance platform $  4 million Cue Ball Capital
Stem Music rights payment platform $  8 million Evolution Media, Aspect Ventures, Upfront Ventures.
Binded Blockchain-based rights registry for visual arts $950,000  Mistletoe, Asahi Shimbun, and Vectr Ventures
Royalty Exchange Music-royalty based asset exchange $ 6.4 million Convertible debt offering

Notable rights-tech direct investments in 2016, included visual arts registry and authentication platform ascribe, which raised $6 million, rights registration and marketplace platform Monegraph, which raised about $4 million, music rights management platform Revelator, which took in about $3.5 million artCOA, which raised $5 million.

Kobalt rethinks the ‘greatest hits’ album with dynamic David Gray ‘Best Of’ 

David Emery, VP Global Marketing Strategy, Kobalt Label Services, told MBW that the format would give Kobalt and Gray the opportunity to keep the artist’s 850,000-plus monthly listeners on Spotify engaged.

“We didn’t just want to make a static playlist – Kobalt has the technology to create something special that changes and adapts with David Gray as an artist,” he said. “We have noticed that the tracks that are most popular for [David Gray] change over time on Spotify, and a lot of that is driven by playlists.

Source: Kobalt rethinks the ‘greatest hits’ album with dynamic David Gray ‘Best Of’ – Music Business Worldwide

This Kobalt-managed fund has spent $200m on music rights in 5 years

Kobalt Music Group, the company that’s relentlessly disrupted the music industry since launching at the turn of the Millennium, is still very much based on the principle that its clients – across publishing, label services and neighbouring rights – get to retain their own copyrights.

“Kobalt’s mission has always been to take the music industry into the digital age as a service provider to rights-owners,” Kobalt CEO Ahdritz (pictured) tells MBW. “That’s what we are and what we always have been.”

Source: This Kobalt-managed fund has spent $200m on music rights in 5 years – Music Business Worldwide

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.

Source: Nettwerk sells 30-year-old publishing catalogue to Kobalt investment fund – Music Business Worldwide

So… do new artists really need to sign to a record label? 

Kobalt boss Willard Ahdritz has never been shy about proclaiming his company’s model – that of artists and writers holding onto their own copyrights – as the future of the music business.

Now a new film from The Economist delves into the pros and cons of musicians disregarding the traditional label deal – ie. receiving advance money in exchange for a lifelong portion of their royalties.

Source: So… do new artists really need to sign to a record label? – Music Business Worldwide

Kobalt’s AWAL joins forces with Music Glue for independent artists 

Kobalt’s digital music services platform, AWAL has signed a partnership with Music Glue, the direct-to-fan platform for selling tickets, music, merchandise, experiences and more. Both companies say they will ‘explore ways in which they can continue adding value to artists they work with by building out supplemental services for clients’.

“Our goal at Kobalt is always to provide our clients with services they need in the most transparent way,” said Richard Sanders, President of Kobalt.

Source: Kobalt’s AWAL joins forces with Music Glue for independent artists – Music Business Worldwide

Kobalt: New app is a ‘giant step’ towards transparency for songwriters 

Kobalt has today launched a new app for publishing clients which allows them to view their income in real time, broken down by individual works, type of rights or country. The launch translates Kobalt’s celebrated online portal to a mobile-friendly format, launching on iOS with an Android version set to arrive in the near future.

Kobalt founder and CEO Willard Ahdritz calls the new tech a “giant step” towards “the same transparent, on-demand access to their data that most other industries already have”.

Source: Kobalt: New app is a ‘giant step’ towards transparency for songwriters – Music Business Worldwide

Medianet, SOCAN, YouTube And The Kobalt Effect 

Sinscreen-shot-2016-03-22-at-16-56-17ce the demise of the long-running-but-never-launched Global Repertoire Database (GRD) there has been a lot of debate over what comes next for digital rights reporting. The songwriter class action suits in the US against Spotify are the natural outcome of more than one and a half decades of failing to deal with the forsaken mess that is compositional rights in the digital era.

The music industry needs a solution and now just like busses that never come, two arrive at once: Google’s Open Source Validation Tool for DDEX Standard (doesn’t sound too sexy I know, but bear with me on this one) and Canadian PRO (Performing Rights Organization) SOCAN has acquired Medianet essentially as a digital rights reporting play. So just what is going on in the world of digital rights reporting?

Source: Medianet, SOCAN, YouTube And The Kobalt Effect | Music Industry Blog

Kobalt’s AMRA increases YouTube publishing payouts by 34% in EU 

During the first three months of administering Kobalt’s digital catalogue in Europe – in Q3 2015 and compared to the previous quarter – AMRA delivered a 26% increase in earnings from Spotify and a 34% increase in earnings from YouTube for Kobalt Music Publishing clients.

Combined, AMRA collected 28% more money from Spotify and YouTube in Europe during the period.

Source: Kobalt’s AMRA increases YouTube publishing payouts by 34% in EU – Music Business Worldwide

Blue Raincoat Songs Inks Kobalt Deal

KOBALT-logoThe long-term worldwide administration deal will mean that Kobalt will provide a variety of publishing services to Blue Raincoat including copyright administration and royalty tracking.

Jeremy Lascelles said “Blue Raincoat Songs will be a very creatively driven operation, but we know how important it is to have really efficient registration and collection systems in place.

“Kobalt’s reputation in this area is second to none and they will provide a global resource and infrastructure that should be a perfect complement to our creative endeavours. Plus it will be nice having them on our team rather than as a competitor!

Source: MBW

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