Spotify announced on Thursday, that it was acquiring Loudr, but did not mention how much it was paying for the company. The reasoning behind Spotify purchasing Loudr is to help the streaming music service better identify when royalties need to be paid to music publishers and artists. That’s something that Spotify has been ridiculed by in the past, and has been working to improve over the past year or so. And now with Spotify being a public company, it needs to take this seriously, or it could see its stock and market cap plummet.
Loudr is a pretty new company, being founded in 2013. It offers digital music providers services that identify, track and pay royalties to music publishers. That is something that has become much more difficult in the age of music streaming services like Spotify. Simply because every time a specific song is played, that publisher and artist should be getting a royalty payment. Songtrust’s co-founder Joe Conyers, stated on the Loudr acquisition that it is “clearly a direct response to the lawsuits and other risks Spotify is enduring.” Mentioning that Loudr is the company that is “tackling the impossible task of determining who companies like Spotify should actually pay for certain songs.” Spotify has stated that Loudr will be adding a team of publishing specialists and technologists to the company. And this is to help Spotify pay out royalties more accurately.
This acquisition comes just a day after the House Judiciary Committee had approved legislation that would change up the digital licensing rules in the country. The current regulations were made for physical music on cassettes and CD’s, so like the copyright law had to be adjusted for the Internet, so does music regulations. The House is planning on creating the Music Modernation Act, which sailed through the House on April 11. So it should be hitting the Senate soon. This act will not only affect Spotify, but also other music streaming services like Pandora, Google Play Music, Apple Music and Amazon Music Unlimited – all of which are having the same issue, but perhaps not at the same level as Spotify, seeing as Amazon, Google and Apple are all much larger companies than Spotify.