Spotify buys Mediachain Labs to track, manage music royalties

PanARMENIAN.Net - Spotify on Wednesday, April 26 announced the purchase of Brooklyn-based startup Mediachain Labs, a company which developed technology that can help the streaming music giant better track online content and reward owners with royalty payments, AppleInsider says.

In a press release posted to Spotify's webpage —and later removed —the firm plans to leverage Mediachain's technology to help further its "journey toward a more fair, transparent and rewarding music industry for creators and rights owners," VentureBeat reported earlier today. Terms of the deal were not immediately available, though the startup had raised some $1.5 million from a variety of investors including Andreessen Horowitz and Union Square Ventures, according to CrunchBase.

Mediachain developed a clutch of technologies for registering, identifying, tracking and managing creative works across the internet, valuable assets for streaming companies looking to properly mete out royalties to rightful content owners. Specifically, the firm specialized in applying blockchain technology to embed timestamps and ownership metadata in media files.

Before being purchased by Spotify, Mediachain created a decentralized, peer-to-peer protocol and database for connecting applications with media, an attribution engine and a cryptocurrency for royalties, reports TechCrunch.

Spotify is expected to use Mediachain assets to avoid potential licensing disputes, an ongoing problem for many streaming music services. Spotify itself is no stranger to lawsuits stemming from improper media attribution or a failure to pay songwriters and publishers for their work. For example, Spotify in 2015 was slapped with a $150 million suit for allegedly failing to pay license holders.

In a more recent case, Spotify reached a $30 million settlement with the National Music Publishers' Association over unpaid royalties. For its part, Spotify contends a lack of sufficient ownership data made it difficult to pay out licensing fees to the proper parties. Today's Mediachain purchase is expected to help solve some of those problems.