Google Inc (NASDAQ:GOOGL) is teaming up with Kobalt to wipe out the agony, pain and frustration that usually engulfs songwriters in their pursuit for royalty payments for their creations. Songwriters have over the years seen payment for their works take ages to be fulfilled leaving most of them wondering whether they will ever get what they deserve.
Google Inc (NASDAQ:GOOGL)’s capital venture Google Venture has teamed up with Dell founder Michael Dell to invest $60 million in Kobalt. A New York company that owns a computer system that can scour payment systems around the world and ensure royalty payments end up where they ought to.
Kobalt is already making gains in the collection of royalties that have been growing two to three years faster with a 30% higher cash return than traditional methods. Its roster of artists includes the likes of Beck, Foo Fighters and Kelly Clarkson. The privately held company has also seen its revenues grow at an annual rate of 40%.
Unlike traditional music publishing companies, Kobalt operates on a service model with artists, paying a flat rate to collect their royalties. Artists can report where their music are selling and how much they are owed via a computer or smartphone. Kobalt reiterates that Google Inc (NASDAQ:GOOGL)’s investments will be used to develop further and scale its technology team worldwide.
Kobalt was initially a fee-for-service operation that accorded artist and songwriter’s with full ownership for their works a rare scenario according to music industry analyst at Midia Research, Mark Mulligan. Kobalt also offers label services where independent artists can pay to have their works as an alternative to signing long-term contracts with music labels.
Using computers to track royalty payments will however not be an easy task for Kobalt according to some industry analysts as business interests in different countries get in the way of data access and transparency. However, the push clearly shows music and technology should not always be at loggerheads according to Kobalt CEO Willard Ahdritz.
