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Spotify has acquired<\/a> the Brooklyn-based blockchain startup\u00a0Mediachain Labs<\/a>, whose team\u00a0will join the company\u2019s office in New York where they will work on developing better technology for connecting artists and other rights holders with the tracks hosted on Spotify\u2019s service. Prior to its acquisition, the startup had developed several technologies<\/a> that could aid in these efforts, including a\u00a0decentralized, peer-to-peer database to\u00a0connect applications with\u00a0media and the information about it, as well as\u00a0an attribution engine for creators<\/a>, and\u00a0a cryptocurrency<\/a> that\u00a0rewards creators for their work.<\/p>\n In short, the startup was working to leverage blockchain technology in order to help solve problems with attribution.<\/p>\n This is an area where Spotify can use some help, as it turns out. Last year, Spotify settled a licensing dispute with\u00a0the National Music Publishers Association (NMPA) in the U.S. over unpaid royalties.<\/p>\n According to the NMPA, Spotify had failed to obtain mechanical licenses \u2013 which refer to a copyright holder\u2019s control over the ability to reproduce a musical work \u2013 for a large number of songs on its service, The New York Times had reported<\/a>. The issue could impact other streaming services as well, the NMPA said, estimating that as much of 25 percent of the activity on streaming platforms is today unlicensed.<\/p>\n Spotify at the time agreed to pay over $20 million to music publishers as a result of this settlement, in addition to a\u00a0$5 million penalty. While the company likely avoided several class action lawsuits as a result of the settlement, it spoke to a larger problem in the industry.<\/p>\n Spotify\u00a0had claimed that it didn\u2019t pay out the\u00a0royalties because it simply didn\u2019t have the necessary data to\u00a0help it figure out whose claims were legitimate, or even how to locate the parties. It\u00a0said it lacked an authoritative database that covered all existing music rights. This opens it up to litigation, which is obviously not the ideal way of managing these payments.<\/p>\n With Mediachain, Spotify potentially has a solution on its hands \u2013 but instead of building out a centralized database with music rights information, it looks like it will build a decentralized one.<\/p>\n As Mediachain explains in a blog post, its vision for the problem with attribution is\u00a0a shared data layer<\/a>, which is says\u00a0\u201cis key to solving attribution, empowering creators and rights owners, and enabling a more efficient and sustainable model for creativity online.\u201d<\/p>\n It also helps that the team at Mediachain has music industry experience. The company noted in the post that its CTO Arkadiy Kukarkin was the first engineering hire at the music curation aggregator\u00a0Hype Machine<\/a>, and before starting Mediachain Labs, co-founder Jesse Walden had co-founded and run\u00a0an artist management firm<\/a>\u00a0that worked with artists including\u00a0Solange Knowles, Blood Orange and Majical Cloudz.<\/p>\n Mediachain says it will turn over the\u00a0technology it had already built to the open source community as it moves to Spotify.<\/p>\n Deal terms were not revealed, but Mediachain had raised $1.5 million according to CrunchBase<\/a>, from investors including<\/a> Andreessen Horowitz, Union Square Ventures, and others.<\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/04\/1-ufjrrwprub3snetp1c5d3a.png?w=680&h=114\")
<\/p>\n![\"spotify\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2015\/05\/spotify.jpg?w=680\")
Spotify has acquired the Brooklyn-based blockchain startup\u00a0Mediachain Labs, whose team\u00a0will join the company’s office in New York where they will work on developing better technology for connecting artists and other rights holders with the tracks hosted on Spotify’s service. Prior to its acquisition, the startup had developed several technologies that could aid in these… Read More<\/a><\/p>\n\n<\/img><\/a>
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