Sony Music Agrees to Acquire Kobalt’s AWAL for $430 Million
(Bloomberg) -- Sony Music Entertainment Inc. agreed to pay $430 million for a pair of businesses from Kobalt Music Group Ltd., a leader in distributing music online, adding two tools it can offer to artists and accelerating the dismantling of one of its competitors.
Sony Music said in a filing Monday that it’s buying AWAL, which distributes music for artists online without taking ownership of their copyrights. It’s also acquiring a Kobalt business that collects royalties for performers.
Kobalt previously touted AWAL, an acronym for A World Artists Love, as an example of how it was reinventing the music industry. But Kobalt hired strategy advisers to review its options and is now selling key assets. A fund related to the company sold its copyrights last year to another firm.
Kobalt, founded by Swedish entrepreneur Willard Ahdritz, long positioned itself as an independent alternative to major music companies. The idea was to offer more generous revenue splits and not take ownership of the music.
The approach didn’t succeed in knocking the major record labels off their perch, but it did change the way they work with artists. A growing chorus of musicians want the tools and funding of a major label while maintaining control over their work in the long run.
“Our investment in AWAL’s continued growth gives us another level of service to offer the independent music community,” Sony Music Group Chairman Rob Stringer said in a statement Monday. “With their flexible solutions to building artist careers, together we will offer creators more exciting choices to connect with their audience worldwide.”
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