Kobalt investment fund bought Nettwerk's 30-year-old publishing catalogue

KMC - an independent investment fund established in 2011, advised and managed by Kobalt Capital Ltd, and operating as a separate entity to Kobalt Music Group - just acquired more than 18,000 songs developed and acquired by Nettwerk’s publishing division over the past 30 years- so the vast majority of copyrights owned by Nettwerk’s publishing company will now switch to KMC, and be administered by Kobalt.

According to "Music Busines Worldwide", developing songwriters signed by Nettwerk Publishing in the past 12-18 months will remain outside the deal – but these clients, plus all future publishing signings, will also be administered by Kobalt.

Johan Ahlstrom, CEO of KMC, stated:

[This] is a perfect example of the caliber of talent we are investing in here at KMC and we are thrilled to be working with this impressive catalogue.

Nettwerk CEO Terry McBride explained that the cash flow from the KMC deal would allow his company to invest more in recorded music, at a time when the race to acquire publishing rights is getting increasingly competitive:

In a digital world where streaming has become the predominant way we consume music, it is important that our artists are partnered with the best technology company in the publishing space to see the full value of their creations. Kobalt simply is the best, and also the most transparent.

He then added:

This is purely a smart strategic move. We’re still a very active publisher – we’ve signed maybe four different artists in the past month for masters and publishing. We’re keeping our whole TV and film division. We’re a great publisher creatively and on the film & TV [sync] side of things, but we’re not so great at administration. That’s a tech business.
I don’t want 25 programmers here figuring that out, collecting those billions of pennies – especially when Kobalt is so great at it. This is just a realisation of where the market’s going and who the best tech player is.
Simply put, the majority of the revenues within the streaming space come from the masters. Now, with a very healthy bank account, Nettwerk can sign more masters and acquire more [recorded] catalogue. Strategically for us, there’s more of an obvious upside on the masters than there is on publishing. But I also think publishing will see an uplift, just not to the same extent.