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Why Spotify Acquired Licensing Startup Loudr

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Spotify announces it has acquired Loudr

On April 12, music streaming company Spotify (SPOT) announced that it had acquired music licensing platform Loudr. The startup builds products and services that help identify, track, and pay royalties to music labels.

The Swedish company has faced criticism in the past over licensing and royalty payments. Spotify recently faced a $1.6 billion lawsuit launched by Wixen Music Publishing, which accused the company of using “thousands of songs” without a proper license, according to Variety. In May 2017, Spotify proposed a $43 million class-action settlement to resolve a suit launched by songwriters David Lowery, Melissa Ferrick, and others.

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Loudr could help reduce lawsuits against Spotify

Music rights are now subject to new legislation, the Music Modernization Act, which focuses on developing a new system to compensate artists in the digital age. Loudr’s platform could help Spotify avoid lawsuits like those it has faced over the years.

Loudr is Spotify’s first acquisition this year, though it is not likely to be its last. Spotify has been on an acquiring spree in the last couple of years. The company acquired five companies in 2017, and four in 2016. Spotify, which went public earlier this month, has seen its stock steadily rise.

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