Spotify announced this morning it has acquired the music licensing platform Loudr, which offers products and services that allow content creators, aggregators, and digital music services to identify, track and pay royalties to music publishers. Proper licensing and royalty payments have been a difficult issue for Spotify over the years. The company has faced multiple copyright infringement lawsuits from music rights holders – including, most recently, a $1.6 billion dollar suit from Wixen Music Publishing, which represents artists like Tom Petty, Missy Elliot, Stevie Nicks and Neil Young.
The suit claims that Spotify has been using thousands of songs without a proper license, and a followed a proposed $43 million settlement involving music rights holders claims against Spotify in a class-action lawsuit, Ferrick v. Spotify.
The problems surrounding music rights are also subject of new legislation – the Music Modernization Act – which is supported by both music and technology companies. It focuses, in part, on the development of a new system to compensate songwriters in the age of online services.
Loudr’s technology can help Spotify be better prepared for the technical challenges that come with tracking rights, and specifically mechanical licenses – a holdover from an era when music was pressed onto physical media, like a CD or record, for example. Spotify, like other digital services, didn’t follow the procedures for these mechanical licenses, which led to the class action lawsuit and settlement.
“What Loudr has built is more than just a smart and easy way for artists to obtain mechanical licenses; it’s true music industry innovation,” said Adam Parness, Global Head of Publishing at Spotify, in a statement. “The Loudr team perfectly complements Spotify’s music publishing operation and, together, we believe we can continue to foster a more open, streamlined, and modern music publishing landscape.”
Spotify declined to share the deal terms.
Loudr was founded in 2013, and has raised under a million in funding, according to Crunchbase. The company’s team of publishing nine specialists and technologists will join Spotify’s team in New York, the company says.
