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Do musicians really need record companies? Do musicians really need record companies?  Kobalt founder Willard Ahdritz has never been one to excessively boast about his company, but the shy Swedish entrepreneur believes that the future of the music business lies in KOBALT’s model, …

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Do musicians really need record companies? 

Kobalt founder Willard Ahdritz has never been one to excessively boast about his company, but the shy Swedish entrepreneur believes that the future of the music business lies in KOBALT’s model, which lets artists and songwriters retain their copyrights.

“The old model is on the way out, so I’m building the new music industry structure.”

Advancements in science and technology have fundamentally altered the music industry’s modes of production; creators now need the proper platform to upload their works to so that audiences all around the world, and this also reduces the influence of traditional models. So the question then is, do musicians really need traditional record contracts?

Since Ahdritz founded it in 2000, Kobalt has committed itself to establishing a fair and transparent data tracking and royalty payment system. It also helps creators by offering convenient services for copyright, processing, distribution, music promotion, and authorization. According to Kobalt’s 2015 earnings, they currently manage 500 copyrights for over 8000 songwriters, 6000 record industry customers, and a total of two million songs. 

However, even though in comparison to the music industry as a whole, the kind of cooperation between Kobalt and music creators is an exception to the rule, independent music is on a steady rise, and more people are choosing to sign with independent labels.

On this, Sam Winwood, senior vice president of Kobalt, said “we’ve said to people, ‘you can be the masters of your own destiny, you don’t need to give away your rights to earn your money; in fact, you’ll earn more money if you don’t give away your rights.’”

But is this really true? The Economist’s documentary “The Music Industry and the Digital Revolution” discusses the pros and cons of musicians opting out of signing with record companies. 

Nick Raphael, a traditional music industry executive and president of Capital Records, is skeptical of Kobalt’s model and believes that Kobalt doesn’t have the capability to develop a global superstar. He says, “We invest millions upon millions to finding the next superstar, trying to find the next brilliant artist, trying to find your wedding song…and ultimately the songs that will make the soundtrack to your lives.”

He continues, “What Kobalt, in my opinion offer, is for artists/writers that do not need advances, that do not need development; that’s great for the privileged few that can afford to do that, but actually, if a new writer comes along that needs developing and needs time and needs money and nurture, that’s not their strongest point.”

Of course, just as there are those who believe that the advantages of signing with a record company outweigh the disadvantages, there are also plenty who maintain that record companies hamper artists. Radiohead guitarist Ed O’Brien believes the mainstream record company’s contract is unfair. He says, “Artists’ contracts were so heavily weighted in favor of the record companies. It was just hugely unfair, and I don’t think anyone, anyone in the record companies would dispute that. They might put their head on and say, ‘well you know what we’ve put lots of investment’. Yeah, you have, but let’s talk about something that’s truly fair, let’s see it for what it is.” 

Many people viewed Kobalt favorably when it emerged, since it didn’t require artists giving away their copyrights, and they also included a fair and transparent data tracking and royalty payment system. Artists gained access to platforms like Spotify and Deezer, as well as having their music played for radio, TV, film, and nightclubs. With Kobalt, artists also have real-time tracking of their songs’ copyright usage data via the Kobalt company website.

Thus, since musicians are often reluctant to sign with record companies from previous, unfair experiences, Kobalt offers a solution to this unfortunate problem.

Moby DJ, a well-known music producer, said, “Major labels thought they were more important than the artists, and they never were. And now as the artists leave, they clearly see that in the world of music, nothing is bigger than the music itself.” 

Jacob Whitesides is a YouTube star with two million fans on Twitter, 1.5 million Instagram followers, and 1.6 million Facebook fans. Last year, he signed a contract with BMG, but maintained ownership of his copyrights. He said, “I have 100% creative control, which is the one thing I wanted, and that’s not a popular thing in most deals now… they saw the leverage I had and they knew I didn’t necessarily need them, it was more of a partnership type thing.”

“In fact, many musicians don’t need contracts; if they can plan their own tours, fans will pay their bill,” Whitesides said, “I think many artists miss opportunities when they choose to sign with a major record company.”

In fact, regardless of the contract itself, for musicians, the most important question is if the traditional or the new model can bring their music to the most people. On this, Sam Winwood said, “Ten years ago if you were a new artist or new band the first step on the ladder was to get a record deal, now that’s just an option that you don’t have to take.”

Kobalt, like many science and technology startups, is gradually replacing many functions of a traditional record company, but it’s difficult for them to provide education and investment for musicians. Thus, there’s no easy answer to whether or not an artist should sign for a record company. However, what’s certain is that whoever develops more transparent and reasonable methods to meet the needs of musicians, is who will find the favor of musicians themselves. 

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