- WorldMags.net"36 56 fnancial statement for the year ended June 30, 2012, Kobalt’s gross proft percentage is 11.6%, Antonio “L.A.”4 Reid . which can be translated as its average admin- CHAIRMAN/CEO, EPIC RECORDS istration fee. ; -13,1, Kobalt’s core strength is its fexibility in of- His rebuilding year caught fire with A Great fering various publishing models in an evolv- p Big World, Tamar Braxton and ing music business, from established artists Sara Bareilles who own their catalogs to those looking to handle their own recordings. No longer juggling dual roles as Epic chair- Its acquisition of AWAL also allows the Antonio “L.A.” Reid man and “X Factor” judge, Antonio “L.A.” company to provide digital distribution, for, Reid presided over a year of rebuilding that in- as the acronym implies, artists without a label. cluded artist breakthroughs, notable releases The bottom line is, if you’re an artist or man- by established acts and key Grammy Award ager who doesn’t want to be signed to a label nominations. or a publisher, Kobalt has a division ..... _ that can On the breakthrough front, Epic formally provide whatever services you require. 1 introduced girl group Fifth Harmony. Discov- So, as Ahdritz points out, Kobalt- , - is build- ered through Fox’s “The X Factor,” the act re- ing “diferent tiers” of services for artists, and i leased its Better Together EP, which debuted at expanding its operations globallyk i on k a market- No. 6 on the Billboard 200. Then A Great Big by-market basis. “We - are rolling out our dis- ......,:z World scored a platinum Billboard Hot 100 top tribution service to Australia and expanding.,... s 10 hit with “Say Something” (featuring Chris- AWAL into the U.S.,” he says. In other words, ., tina Aguilera). “I love working with established just as Kobalt’s music publishing operation was Simon Cowell artists,” Reid says, “but I’m also thrilled by and designed for direct integration into the global live for the idea of breaking new artists.” marketplace, look for the company to build out Epic additionally rolled out notable releas- its other capabilities in the same way. es by such established acts as Avril Lavigne, But that’s not all that Kobalt is planning. Ciara, Yo Gotti and Sara Bareilles. Bareilles’ Afliate company Kobalt Capital launched re- The Blessed Unrest brought Epic a year-end cently to begin buying music publishing, while highlight: a Grammy nod for album of the year. parent Kobalt Music Group serves as adviser That joined Tamar Braxton’s three Grammy on the acquisitions and manages the assets. In nominations for best R&B performance, best the last year, that arrangement has acquired R&B song and best urban contemporary al- the publishing or a stake in the catalogs of bum. The nods stemmed from her Stream- Steve Winwood, Lindsey Buckingham and Tim line/Epic debut Love and War, which bowed the B-52s. —Ed Christman Westergren photographed at No. 2 on the Billboard 200 and No. 1 on Top at the Pandora R&B/Hip-Hop Albums. offices in Looking back on the past year, Reid says, Oakland. Calif. “We’re redefning ourselves as an industry in 58 the digital era and haven’t fgured ourselves out yet. But the streaming business, with the Simon Cowell debut of Beats Music, will be a great fxture and CO-OWNER, SYCO ENTERTAINMENT help to our business. Another 2013 standout for Tim Westergren me was the overall improvement of music and Guided Alex & Sierra to victory on the third artistry. Macklemore & Ryan Lewis and Kend- season of the U.S. “X Factor” CO-FOUNDER/CHIEF STRATEGY OFFICER, PANDORA rick Lamar stood out, as did Lorde, who prob- ably had the song of the year. This was a year of Mr. Internet Radio has built a company now valued at more than $6 billion Simon Cowell’s recent visibility in the United great music that will continue into 2014.” States has sat squarely with “The X Factor”— Epic—which closed 2013 with a market the label head’s reality singing competition Tim Westergren’s most memorable moment of 2013 came when share of 2.5% in albums plus track-equivalent that airs on Fox and has yet to command the the name of the 8-year-old Internet radio service he co-founded albums, according to Nielsen SoundScan—re- audience he once predicted. Out of public went up on the building that houses its ofces in Oakland, Ca- mains focused on breaking new and develop- view, though, his Syco Entertainment had a lif. “I was really moved,” says Pandora’s chief strategy ofcer ing acts. Its 2014 slate includes projects by signifcant year thanks to One Direction. 55 Future, R&B newcomer Kesington Kross, Kat Syco produced the concert-biography flm and public face of the country’s largest Internet radio service. Dahlia (on Sylvia Rhone’s Epic-distributed “One Direction: This Is Us,” grossing $28.9 mil- “There’s something about a physical manifestation of what’s es- Vested in Culture), Karmin’s full-length debut lion stateside, according to Box Ofce Mojo. sentially a virtual business.” Pulses and Paloma Faith’s forthcoming third The band of U.K. “X Factor” contestants had Pandora’s name was certainly visible in 2013. Its monthly listener hours grew set A Perfect Contradiction. their third consecutive No. 1 debut on the Bill- 13.7% to 1.6 billion in December. Monthly listeners grew 13.6% to 76.2 million—in “For whatever reason, things began com- board Top 200 last year with Midnight Memo- spite of iTunes Radio, Apple’s foray into Internet radio, as well as improved prod- ing together in the last few months of 2013,” ries, which has sold 1.2 million copies, accord- ucts from Spotify and Slacker. Investors have taken note of its growth and improve- Reid says. “I’m very excited about the music ing to Nielsen SoundScan. ments in mobile advertising. Shares of Pandora rose 189.7% and now value the that’s coming. Folks better watch out. We’re His empire continues to expand in the company at more than $6.3 billion—more than three times the price that Universal cooking.” —Gail Mitchell United Kingdom with scripted flms and a Music Group paid for EMI Music. stage production in addition to his “X Factor” and “Got Talent” franchises that air in more Westergren’s name is basically synonymous with Internet radio. He has than 70 countries. In March, Syco joined with hosted town-hall meetings around the country to hear from listeners. His name 57 YouTube to launch the You Generation chan- is attached to emails asking listeners to support its eforts to change its statutory nel, described as “the world’s frst global audi- royalty structure—and is also attached to much of the criticism aimed at the com- Willard Ahdritz tion,” which is available in 26 countries. pany. The last two years have been flled with public rancor over Pandora’s payments FOUNDER/CEO, KOBALT MUSIC GROUP With Columbia Records, Syco hopes to to rights holders, artists and songwriters. Last year, Pandora’s purchase of a small break recent U.K. “X Factor” winner Matt Car- broadcast radio station, ostensibly to pay lower ASCAP and BMI fees, attracted con- A key buyer for publishing assets looks to dle in both the United Kingdom and the States. troversy from rights holders. The year ended with Pandora in court over the fees it build out label services on a global scale The test for the U.S. version of the show, which pays songwriters and publishers through BMI and ASCAP. “It was not a pretty year has yet to be picked up for a fourth season, for communication,” he says. As a disruptor of the traditional music pub- will be whether season three winners Alex & lishing business model, Kobalt Music Group Sierra can spur sales when they release their Westergren hopes for better discourse in 2014. Upcoming features will let artists and its leader Willard Ahdritz still get on the debut album. control their identity and connect with fans on the platform. Westergren hopes these nerves of the old-guard industry players. They “The most important thing is that I believe functions, collectively called Pandora for Artists, will change the conversation about like to complain that Kobalt picks up clients by in the ‘X Factor’ brand,” Cowell told Billboard the fees paid by streaming services. “Artists will get a window into the value of the giving away services and by charging a below- prior to last season’s fnale, “what it stands for platform,” he says, “and the discussion will be about growing the platform.” market-rate 5% administration fee. But ac- and what it has done for artists’ careers.” —Glenn Peoples cording to the company’s most recent annual —Phil Gallo WorldMags.net 38 BILLBOARD | FEBRUARY 1, 2014 PHOTOGRAPH BY DAMIEN MALONEY.