Spotify tackles copyright infringement risks by buying ‘cover song’ licensing firm

Apr 13, 2018, 6:00 am

Shweta B.

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Spotify, which is currently the world’s largest music streaming service, announced on Thursday, April 12 that it wishes to buy is a San Francisco-based licensing technology firm which helps locate songwriters and pay due royalties for cover songs, which are currently a raging internet sensation.

Built in 2013,’s three co-founders wanted to simplify the process of royalty payments for performing musicians. They take on the task of identifying, tracking and paying royalties for the “mechanical licenses” owned by music publishers for the public or internet-based performances of song covers, samples, remixes or medleys.

The Spotify Loudr acquisition helps to recover a major folly existing in Spotify’s business model, which has also got it into previous lawsuits. Its previous inability to locate and ensure that the right artists get paid for copyrighted work, led California-based Wixen Publishing, representing big names in the music industry such as Tom Petty, Neil Young, Rage Against the Machine and Missy Elliott to sue Spotify for a whopping damage of $1.6 billion last year.

As for the financial terms of the deal, which will mark Spotify’s first, since it began trading on the New York Stock Exchange earlier in April, are not yet disclosed.

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