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Spotify attempts to solve royalty riddle with blockchain technology

The service lost $20 million settling a dispute last year.


Phillip Tracy


Posted on Apr 26, 2017   Updated on May 24, 2021, 4:21 pm CDT

Spotify is teaming up with a blockchain startup to help attribute the songs it hosts to its respective artists. Mediachain Labs, a young company out of Brookyln, New York, will attempt to use a number of blockchain-inspired technologies it launched last year to keep Spotify from running into the same controversies it has faced in the past.

Last year Mediachain announced its “Attribution Engine,” which is originally meant to pick out the best openly licensed images from a database of millions using machine learning. Those images would have appropriate attribution baked in so creators wouldn’t get left behind as the internet began spreading their work.

If the user didn’t know where an image came from, they could upload it and initiate a reverse lookup to figure out the source. If the engine didn’t know, it would recommend visually similar images that are licensed for reuse. The company’s goal was to reach 1 billion images in “the coming months” by reaching out to creators directly and speaking with organizations that support artist attribution.

Mediachain started using its technology for online images, but did mention music in a post last June: “Imagine being able to connect with the artist of a viral GIF you see in your feed, learn the history or origin of any image, or automatically reward a musician whenever you press play.”

Attribution can often be difficult to keep track of—a problem Spotify found out the hard way. Last year, the popular music streaming service settled a dispute with the National Music Publishers’ Association regarding royalty payments, according to the New York Times. It ended up paying more than $20 million to publishers to account for unpaid royalties. As it turns out, Spotify failed to gain the licenses for a large number of songs it hosts. The publishers’ association estimated 25 percent of the songs on Spotify were unlicensed.

Spotify’s response illustrates the complexity of the situation. It said there wasn’t enough data to figure out which publishers had legitimate claims over songs because no database exists on the matter.

That’s where it seems Mediachain Labs comes in. With its decentralized approach, Mediachain will look for ways to add names to songs so artists receive appropriate attribution and compensation.

“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,” Spotify wrote in a now-deleted press release.

The terms of the deal were not disclosed.

H/T TechCrunch

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*First Published: Apr 26, 2017, 6:52 pm CDT