Kobalt issued a statement Monday following news of the sale, saying it will strengthen its commitment to its publishing business and AMRA. “We are both excited for the big opportunities ahead across music publishing, AMRA and Kobalt Capital,” Kobalt founder and chairman Willard Ahdritz said in a statement. “Our team and capabilities will only grow stronger and play a continued role in making the industry better for creators.”
Going forward the company says it will stick to its core mission. “Kobalt’s mission from the start has been to create transparency and fairness for creators,” Kobalt CEO Laurent Hubert said in a statement. “I could not be more excited to focus 100% of our efforts on our incredibly successful music publishing business. Through our world-class creative and synch team’s ‘one roster, one territory’ approach combined with our global tech infrastructure, Kobalt has become the destination of choice for some of the most successful music talent in the world.”
Kobalt’s publishing operation had $450 million in revenue in the year ended June 30, 2019, while AMRA had another $65 million. (The company’s financials for the year ended June 30,2020, are expected to be filed in April or May.) The company has been predicting it will finally achieve profitability when its numbers are reported, after many years of the company reporting red ink.
Meanwhile, this deal allows the three major music companies to continue to dominate the indie distribution sector. As noted earlier, the deal will give Sony an estimated $1 billion in revenue from distributing independent labels through its The Orchard and AWAL operations.
While Kobalt doesn’t break out AWAL’s operations by geography, overall the company says 45% of all of its revenue, including publishing, is derived from the U.S. marketplace. If that percentage is applied to AWAL’s $106 million in revenue, that would give its U.S. arm about $48 million. That means the deal would add another 0.7% to Sony’s U.S. market share, increasing it to about 26.4% based on 2020 figures, Billboard estimates.
Sony’s presence in the independent sector increases to about 6.5% market share, also including releases from its Orchard and RED distribution services.
