Spotify has a solution for paying artists faster: blockchain.
Last year, Mediachain Labs introduced its ‘Attribution Engine.’ The engine would select the best openly-licensed images using machine learning. It would then automatically add the proper attribution to the images so creators would get “the credit they need and deserve.”
Now, Spotify wants to use the same technology to better attribute songs on their platform.
Spotify acquired Mediachain Labs yesterday. Mediachain operates on blockchain technology. In a blog post, Spotify wrote,
“Brooklyn-based Mediachain Labs has been the driving force behind the Mediachain project, a world-class blockchain research agenda and open source protocol to better manage data that is critical to the health of the music industry. The Mediachain team will join our New York City offices and help further Spotify’s journey towards a more fair, transparent and rewarding music industry for creators and rights owners.”
By acquiring Mediachain, Spotify hopes to fix attribution problems that has widely plagued its service. Last year, Spotify paid the National Music Publishers’ Association (NMPA) over $30 million to settle unpaid royalties. The NMPA estimated that 25% of Spotify’s songs weren’t licensed.
The acquisition may also help the streamer gain wider support from the creative community ahead of their long-rumored IPO.
Before starting Mediachain Labs, co-founder Jesse Walden also helped co-found Cool Managers, an artist management firm. He represented independent musicians including Solange Knowles, Blood Orange, and Majical Cloudz. In a blog post, he wrote that he became “entangled with a host of problems” with music data.
“The problem is simply that no central database exists to keep track of information about music.”
There it is! But what’s the solution? Walden viewed blockchain technology as the way to solve the problem with metadata and help artists get paid.
“If we want to enable maximum value flow and creation, we’ve got to solve the data problem first. Given that context, we should view a blockchain solution as a simple metaphor for shared, networked, media metadata.”
Speaking on their acquisition, the blockchain solution company praised Spotify. They named the streamer “a champion of transparency and open data for artists.” (Separately, Ivanka Trump also hailed her father as a ‘champion of families,’ but back to the story…)
Mediachain explained how Spotify’s acquisition will enable their long-term vision.
“This experience, as well as the rest of the team’s personal pursuits as creatives, has driven our conviction about the future of media metadata: a shared data layer is key to solving attribution, empowering creators and rights owners, and enabling a more efficient and sustainable model for creativity online. The opportunity to join an organization that shares this vision comes at a crucial time, when the relatively nascent blockchain community has few bridges to mainstream consumers, creators or the platforms they use to interact.”
Mediachain and Spotify didn’t disclose the terms of the deal. The blockchain solution company counts with under 10 employees, who will all move into Spotify’s lavish Manhattan digs.
The company previously raised $2 million from investors.