Published On: Tue, Mar 11th, 2014

Michael Dell To Invest About $25 Million In Kobalt Music Technology

Dell, through his  private investment firm, MSD Capital, will be taking a 9.9% stake in Kobalt who  have developed technology that allows a collection of musical royalties a much more  efficient operation.

Michael Dell, through  his  private investment firm, MSD Capital, has once again showed his willingness to invest in the non-hardware sector. This time Dell has picked up  a 9.9% stake in Kobalt Music , a company formed in 2000 who have succeeded in developing a form of advanced technology, which makes the problematic issue of collecting royalties much more straightforward and therefore an attractive proposition for songwriters.

According to market reports MSD paid around $25 million for their  stake in Kobalt.

Kobalt, who can boast an impressive list of songwriting clients headed up by former Beatle , Sir Paul McCartney along with Prince, Stevie Nicks of Fleetwood Mac as well as well-known Swedish pop artists Max Martin to name but a few, have made a niche in the market increasingly over the years through charging smaller commissions than most of their competitors, ranging from between   6% to 15%, although they do pop up their profit margins by charging higher advanced fees.

The Kobalt formula appears to be working with their  revenue rising by 40% in the 2013 financial year  to $175 million

The issue of has become an increasing bone of contention for songwriters, largely due to ever increasing instances of copying. For the top players in the songwriting industry the necessity to use the services of companies that are not only capable of providing security but also to provide  sophisticated micropayment tracking systems makes a company of Kobalt’s caliber increasingly attractive.

kobalt music/ Michael Dell

According to Willard Ahdritz, Kobalt’s CEO, the company’s technology platform, which is integrated with Google’s YouTube, allows for making the potentially problematic issue of royalty collections a simpler task all together. Despite the fact that YouTube can currently be accessed free of charge, for Kobalt its advantage is that it  can be used as a source of revenue for both musical artists and songwriters to the fact that Google are prepared to share any advertising revenue it brings them with the registered rights holders to any piece of music.

Kobalt  has plans in place that will allow them to collect royalties from of a total 1.5 billion people within the coming year, the five fold increase the 300 million listeners it currently gallop income from. The company is scheduled to begin to collect royalties not only from  YouTube but also from a number of other similar digital platforms in based in Southeast Asia, Russia and Latin America, where licensing agreements are only now being legislated.

For the time being Kobalt formed a working association with a number of collection societies in some of these territories.

Kobalt’s original funding was provided by venture capitalists Spark Ventures, who have sold their stake in the company to MSD.

Among Kobalt’s existing investors are Balderton Capital, a European technology-focused venture capital firm.

Announcing his decision to invest in Kobalt, Michael Dell praised their “innovative technology” was going on to add that Dell Computers would be both ready and willing to place any of the considerable technology services that they have at their disposal available to the publisher.

 

Michael Dell was born and raised in Houston, where he began to show exceptional intelligence as well as a keen head for business at an early age. Even while he was still on his early teens, Dell already had established an investment portfolio dealing in stocks and precious metals.

When he was just 15, Dell invested some of his earnings in an Apple II, which he promptly took apart and re-assembled to learn and understand how it operated.

Dell completed high school in Houston, whilst spending a lot of his spare time promoting various business ventures while studying the world of computers and their increasingly growing place in society of the early nineteen eighties, turning the knowledge he gained into lucrative enterprises that saw Dell gradually build up considerable capital, even before he completed high school.

During his freshman year at the University of Texas at Austin, Dell began to take advantage of his practical knowledge of computers by selling upgrade kits for computers to his fellow students. His enterprise became so successful that Michael applied for a vendor license that enabled him to bid on contracts for the State of Texas, where he succeeded in considerably undercutting the competition, by cutting out the traditional overhead that a computer store had to contend with.

In 1984, when aged just nineteen, Michael Dell began to market upgraded PCs, kits, and add-on components on a full time basis, recording sales of around $65, 000 recorded for that year, having the vision to incorporate his company under the name of “Dell Computer Corporation” and began operating out of a business center in North Austin.

Just eight years later, Dell had grown his company to such an extent that he earned the distinction of being named as the youngest CEO to have his company mentioned in Fortune magazine’s list of the top 500 US corporations.

In 1996, Dell began marketing his company’s computers through the internet, which proved to be highly successful, with annual sales of around $350 million being recorded in the first year. By 2001, Dell Inc. had achieved a world market share of 12.8 percent, to become the world’s largest PC maker, eventually reaching as high as seventeen percent worldwide and sixteen percent in the United States, during a gradually shrinking market.

During most of 2013, Michael Dell fought and won a bitter battle to take Dell Computer back into private hands.

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