Spotify has bought Loudr, a company that has provided various services to DIY artists over the years, but which is of interest to the market-leading streaming platform for what became its primary business, sorting out mechanical licensing. Yeah, that old thing.
In the US, companies providing digital distribution to self-releasing artists have had to worry about mechanical licensing, because when downloads are sold Stateside it’s the job of the label to pay any mechanical royalties that are due to songwriters and music publishers.
Whereas in most other places the relevant music publishers and collecting societies have their own deals with the download stores – mainly iTunes – and collect the song right royalties from the digital music platform directly.
As a result DIY distributors in America usually offer their artist clients tools to help with mechanical rights licensing. And in many cases those distributors – including the likes of CD Baby, Distrokid, Zebralution and the new Soundrop – utilise Loudr’s mechanical rights licensing platform to do just that.
Spotify, of course, has had its own mechanical right woes. When it comes to streaming, in the US, as elsewhere, it’s the digital platform that has to sort out paying mechanical royalties to publishers and songwriters, rather than the label or artist.
Everywhere else there is a collecting society to help with that process, but not in the US, where music publishers forgot to set one up. Hence all the shouting about publishers and songwriters going unpaid by streaming services, and all the multi-million dollar lawsuits.
It’s actually hoped that the in development Music Modernization Act will set up a mechanical rights collecting society in the US for the first time, addressing much of this problem. Though Spotify presumably reckons that having extra expertise in house for paying publishers and songwriters can’t hurt.
Says Spotify’s Global Head Of Publishing: “What Loudr has built is more than just a smart and easy way for artists to obtain mechanical licenses; it’s true music industry innovation. The Loudr team perfectly complements Spotify’s music publishing operation and, together, we believe we can continue to foster a more open, streamlined, and modern music publishing landscape”.
Despite now being part of Spotify and based out of its New York offices, Loudr will still “provide select services to its publishing and aggregator partners”, while also contributing to the streaming giant’s “continued efforts towards a more transparent and efficient music publishing industry for songwriters and rights holders”.