Kobalt Music Publishing experienced a major revenue uptick during the 2019 fiscal year, but the earnings boost was accompanied by substantial losses.
Update: The following report specifically pertains to UK-based Kobalt subsidiary, Kobalt Music Publishing Worldwide Limited, as noted in the report, for which the company submitted detailed earnings with the UK Companies House on March 27th, 2020 (which were later shared with Digital Music News). After the publication of this article, Kobalt VP of PR & Communications Sean Stevens forwarded a broader financial statement for the global, over-arching Kobalt entity, while demanding corrections to this story as the year-over-year losses for the UK-based entity are more severe than the broader report. We did not retroactively change this report to reflect the new financial filing, which was delivered after this article was published, but you can find it here.
According to an earnings report for Kobalt’s 2019 fiscal year, which specifically pertains to UK-based subsidiary Kobalt Music Publishing Worldwide Limited for the period ending on June 30th, revenue increased by 64 percent from the 2018 fiscal year. Additionally, Kobalt Music Publishing Worldwide’s gross profit declined by 82 percent from 2018, to an after-tax loss of approximately $917,000 (£742,000). Notably, the global, over-arching rights management and publishing company posted stellar numbers in 2018’s fiscal year, including a more than 25 percent revenue jump; on the heels of these results, as in the past, executives pursued long-term investments.
Based upon this point, Kobalt Music Publishing Worldwide’s 2019 earnings analysis struck a generally optimistic tone while also acknowledging several “risks and uncertainties” that may impact future operations.
Demand for “the music administered” by Kobalt Music Publishing Worldwide is subject to change, and to counteract the risk, the company is making its music library “as wide-ranging as possible.” Moreover, Kobalt Music Publishing Worldwide cited client-retention and signing variability, global economic trends, and evolving music distribution technology as operational elements that will require a measured, strategic response moving forward.
Finally, addressing the monetary side of operational risks, the 2019 earnings report identified currency fluctuation as a cause for some concern (Kobalt Music Publishing Worldwide collects payments from companies across the globe). The report deemed the UK-based Kobalt subsidiary’s credit and liquidity risks to be minimal.
It’s worth noting that the over-arching, global Kobalt brand has become progressively larger since its 2000 debut. The brand boasts approximately 25,000 songwriters and 20,000 artists, including the catalogs of Bob Dylan, Prince, and Paul McCartney, in its ranks. Even so, earnings have typically been invested in additional employees and resources. (During the 2019 fiscal year, Kobalt’s employee total grew by an average of 40, and an average of approximately 137 new team members came aboard in 2018, factoring also for departures.)
To be sure, Kobalt hasn’t turned a profit—technically, that is—since it began reporting earnings publicly in the early 2000s. However, sizable revenue upticks over the past few years attest to a continued increase in volume, scope, and reach.