Yesterday at the Web Summit in Dublin, founder and CEO of Kolbat Music, Willard Ahdritz announced that revenues their roster of writers have received from Spotify have now surpassed those from iTunes by 13%. These figures are based on royalties collected during Q1 of 2014. It’s all happened pretty fast, really fast in fact. In 2013’s 3rd quarter iTunes were 32% ahead of Spotify and that gap shrunk to 8% in Q4; but this is the jump that actually shows Spotify taking the lead.
For some context, Kolbat Music Group are dinosaurs of the independent music publishing world. At any one time they are representing on average around 40% of the top 100 songs and albums in the UK and US. They collect royalties for the likes of Bon Iver, Alt J, Skrillex and Pearl Jam. In terms of writers’ royalties, they are handling the cash flow of juggernauts like Drake’s puppeteer Noah ’40’ Shebib, Shake It Off and Baby One More Time writer Max Martin and college dropout hoarder Dr Luke. They hold the copyrighting keys to hit-makers old and new, which is why these figures might have Apple running scared into another haphazard streaming alternative.
These figures are just based on European publishing, but on the world stage streaming revenues for Kobalt writers have tripled over the past two years. In Q2 of 2014, streaming revenues (everything from YouTube to radio sessions) made up 10% of overall publishing income. This might not seem like a lot but it’s tripled since 2011 which both mirrors the indomitable rise of the stream and basically suggests people don't hugely care about owning stuff anymore. There are two basic models of music consumption; access and ownership. What this announcement shows is that the former is making serious headway to overtake the latter. On this conclusion alone, it should be record stores (digital or physical) who are having the worst day.
Not necessarily- what Kolbat have also managed to show is that if you monitor and and collect royalties from streaming services carefully then the green-stream-machine might not actually be the industry’s worst enemy. At the summit, Ahdritz explained that by honing in on technology, and remodelling the business to one that is more focused on results, Kobalt is able to collect more royalties and ultimately get more money. Averagely, they are cashing in 30% higher revenues than their rivals. That can’t just be because they’ve got LMFAO on their books now can it?
As with any data analysis in music, this is mostly a fuss about one quarter in one continent but it’d be foolish not to see this as an indicative milestone for streaming. Not just because Spotify is in the lead, but because publishers are actually cashing in on it. Ahdritz said, “What Kobalt offers to artists, songwriters, and publishers has become more important than ever as the music industry's infrastructure is failing them, unable to efficiently account for the enormous volumes of data from digital transactions. We are fixing those clogged pipes and, for Kobalt clients, the money is flowing. And happy music creators means the whole ecosystem will flourish.”
Words: Duncan Harrison