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Spotify has announced its acquisition of blockchain technology company Mediachain Labs to help it reward online content owners with royalty payments.

The news, first reported by VentureBeat on Wednesday, was relayed via a Spotify press release which has since been removed from its website, explaining that the purchase of the New York-based startup was aimed at facilitating Spotify's "journey toward a more fair, transparent and rewarding music industry for creators and rights owners".

Mediachain is responsible for the creation of an open source peer-to-peer database and protocol for registering, identifying, and tracking creative works online. The blockchain component aims to help creators and rights holders prove they are the owner of a piece of work and receive due payment.

Spotify has faced legal trouble in the past over its failure to pay artists and publishers, which is said to be down to difficulties it has had in working out who to pay, a problem which relates especially to smaller artists and labels.

Last month, Spotify reached a $30 million settlement with a publishing group over unpaid royalties and agreed to put in place a system that guaranteed a "reasonable effort" would be made to match all music streams with creators and rights owners.

Spotify recently passed 50 million paid subscribers. The Mediachain acquisition deal - the terms of which were not disclosed - appears to be part of the company's plan to gain wider support from the creative community as it gears up to become an initial public offering on the stock market sometime next year.

Article Link: Spotify Turns to Blockchain Technology to Pay More Royalties to Artists
 

Shirasaki

macrumors P6
May 16, 2015
15,502
10,728
How fair Spotify could pay those content owners? Same level as Apple Music? Or just bare minimum?
Personally don't really like Spotify but if it is gone, I will have no free streaming service to use.
 

sudo1996

Suspended
Aug 21, 2015
1,496
1,182
Berkeley, CA, USA
I didn't realize that you need special startup technology to figure out who wrote the song your service is streaming. Other streaming services must really be struggling to figure out who wrote what. I just assumed Spotify just wasn't paying fairly. Silly me.
Yeah, it doesn't add up, so something is probably missing from the story. Usually these cryptocurrency systems are designed to let many individuals contribute arbitrarily small amounts of money to things easily, securely, for cheap/free, and sometimes anonymously. It's a neat concept that I'd like to see implemented if they can get rid of the anonymity, but I've only ever heard of criminals and ultra-geeks using it, and I don't see why Spotify needs it.
 

A MacBook lover

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May 22, 2009
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Yeah, it doesn't add up, so something is probably missing from the story. Usually these cryptocurrency systems are designed to let many individuals contribute arbitrarily small amounts of money to things easily, securely, for cheap/free, and sometimes anonymously. It's a neat concept that I'd like to see implemented if they can get rid of the anonymity, but I've only ever heard of criminals and ultra-geeks using it, and I don't see why Spotify needs it.
Blockchain is ground breaking technology that forms a distributed ledger, every company will be using some form of it in the future. Read up.
 

Canubis

macrumors 6502
Oct 22, 2008
425
524
Vienna, Austria
I didn't realize that you need special startup technology to figure out who wrote the song your service is streaming. Other streaming services must really be struggling to figure out who wrote what. I just assumed Spotify just wasn't paying fairly. Silly me.

One needs to see the much bigger picture here. Blockchain technology has the potential to cut away big parts of the licensing jobs the labels, distribution companies, royalty collection agencies etc. are doing now and will eventually bring artists a bigger piece of the revenue cake since there will be less other parties involved in between the artists and their audiences.
 

kstotlani

macrumors 6502a
Oct 27, 2006
774
1,234
Blockchain does two things - increased transparency and speed of transfer. In this case it would probably be implemented for increased transparency. This is not a stunt as some people are suggesting. Blockchain is quite powerful and has several use cases apart from crypto-currency.
 

thisisnotmyname

macrumors 68020
Oct 22, 2014
2,438
5,248
known but velocity indeterminate
It's spin. I haven't looked into the lawsuit so I'm speculating a bit but it's unlikely it was about Spotify's inability to determine ownership of samples any better than the remainder of the industry. Blockchain could certainly create a record of "first to register" particular sounds and samples so in an increasing musical culture of borrowing and building upon others it would provide a record of who did something first. You still need technology to match all of those millions (billions?) of samples against every new song created though. And none of this is dealing with anyone that's asserted an existing right but not being paid the royalty, this is trying to identify previously unknown samples.

There's a reason they took down the PR.
 

4jasontv

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Jul 31, 2011
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Blockchain does two things - increased transparency and speed of transfer. In this case it would probably be implemented for increased transparency. This is not a stunt as some people are suggesting. Blockchain is quite powerful and has several use cases apart from crypto-currency.

Huh? Increased transparency and speed of tranfer of what? I hope it isn't payroll. The only person who should be getting licencing fees from art are the content creators. I'd even be so bold as to say most members of a band don't deserve royalties either. There is no other industry that does this crap. The company that made Vanna White' s fillings doesn't get paid every time she smiles.
 
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sinsin07

macrumors 68040
Mar 28, 2009
3,606
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How fair Spotify could pay those content owners? Same level as Apple Music? Or just bare minimum?
Personally don't really like Spotify but if it is gone, I will have no free streaming service to use.

Search and you shall find:
"For instance, the latest RIAA report showed that while Apple pays between $12 and $15 per 1,000 streams, Spotify pays around $7. YouTube, however, remains the worst at around $1 per 1,000 streams."
Spotify aiming to solve its unpaid royalties problem with acquisition of Mediachain startup
 

69Mustang

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Jan 7, 2014
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Huh? Increased transparency and speed of tranfer of what? I hope it isn't payroll. The only person who should be getting licencing fees from art are the content creators. I'd even be so bold as to say most members of a band don't deserve royalties either. There is no other industry that does this crap. The company that made Vanna White' s fillings doesn't get paid every time she smiles.
This is a horribly bad take, and the Vanna analogy is even worse since White doesn't get paid every time she smiles. It completely ignores the realities of the industry. The record companies take the majority of the royalties. In general, for artist to get more they need better deals with the labels first. That's not on Spotify. Even if Spotify pays more royalties, that's no guarantee the artists are going to get more since the labels don't have to pass that windfall down to the artists. Trickle down economics never worked anywhere else, no reason to think it would work here.

Band members don't deserve royalties? Uh, I got nothin'.
 

Kaibelf

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Apr 29, 2009
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Silicon Valley, CA
Blockchain is ground breaking technology that forms a distributed ledger, every company will be using some form of it in the future. Read up.

And the only reason Spotify did this is because of a legal settlement for non-payment, and this move was part of it. Even the ones they WERE paying were being paid less than others were paying, so this will be little more than a distributed record of how cheap Spotify is going to be.
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This is a horribly bad take, and the Vanna analogy is even worse since White doesn't get paid every time she smiles. It completely ignores the realities of the industry. The record companies take the majority of the royalties. In general, for artist to get more they need better deals with the labels first. That's not on Spotify. Even if Spotify pays more royalties, that's no guarantee the artists are going to get more since the labels don't have to pass that windfall down to the artists. Trickle down economics never worked anywhere else, no reason to think it would work here.

Band members don't deserve royalties? Uh, I got nothin'.

He said MOST members of a band, which I assume applies to those bands where it's really one or two people doing everything and the others are just there for touring personnel. Nine Inch Nails, for example. Or Smashing Pumpkins. If Billy Corgan wrote the songs on an album, and even played the instruments on the commercial recording, do the others in the band deserve an equal share?
 

ArtOfWarfare

macrumors G3
Nov 26, 2007
9,541
6,026
It's a neat concept that I'd like to see implemented if they can get rid of the anonymity, but I've only ever heard of criminals and ultra-geeks using it, and I don't see why Spotify needs it.

You've got it backwards. Blockchain isn't anonymous at all. If you want to do money laundering, you do it with cash or gift cards. Those are completely anonymous and untrackable. Blockchain is easy to track - every unit is clearly labeled with every person who has ever had possession of it.
 

4jasontv

Suspended
Jul 31, 2011
6,272
7,548
This is a horribly bad take, and the Vanna analogy is even worse since White doesn't get paid every time she smiles. It completely ignores the realities of the industry. The record companies take the majority of the royalties. In general, for artist to get more they need better deals with the labels first. That's not on Spotify. Even if Spotify pays more royalties, that's no guarantee the artists are going to get more since the labels don't have to pass that windfall down to the artists. Trickle down economics never worked anywhere else, no reason to think it would work here.

Band members don't deserve royalties? Uh, I got nothin'.

My point is that labels shouldn't get anything. They provide a one time service and should get a one time payment. They don't have to pay more to stream a song. If Spotify simplifies payment so more parties can get royalties they are making the situation worse.

And no, I've seen plenty of artists that pay the band for their time because they provided little to no development of the music. Crafting a single track is not sufficient to be a contributor deserving lifetime royalties. I might not hold the popular opinion here, but royalties should be simplified to the individual who created the art, not the investor or associates who provided support. My oppinion. Thats all. And yeah, I look at organizations that try to decrease the revenue of the artist, or making it harder for the artist to retain their rightful earnings as shills for the industry.
 

69Mustang

macrumors 604
Jan 7, 2014
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In between a rock and a hard place
He said MOST members of a band, which I assume applies to those bands where it's really one or two people doing everything and the others are just there for touring personnel. Nine Inch Nails, for example. Or Smashing Pumpkins. If Billy Corgan wrote the songs on an album, and even played the instruments on the commercial recording, do the others in the band deserve an equal share?
You're assuming facts not in evidence. There was no distinction made between actual band members and touring personnel. The question of equal share is moot as well since there, again, is no mention of share division. Afaik, band members aren't paid equally anyway since there are multiple types of royalty payments from writing credits to producing credits and those go to the individuals who made the contribution. Also, the division of royalties is decided by the band, not the payer of said royalties.

My point is that labels shouldn't get anything. They provide a one time service and should get a one time payment. They don't have to pay more to stream a song. If Spotify simplifies payment so more parties can get royalties they are making the situation worse.

And no, I've seen plenty of artists that pay the band for their time because they provided little to no development of the music. Crafting a single track is not sufficient to be a contributor deserving lifetime royalties. I might not hold the popular opinion here, but royalties should be simplified to the individual who created the art, not the investor or associates who provided support. My opinion. Thats all. And yeah, I look at organizations that try to decrease the revenue of the artist, or making it harder for the artist to retain their rightful earnings as shills for the industry.
I understand this is your opinion. I have no qualm with that. I do think your opinion is unrealistic. Business doesn't work that way. Until the industry changes, the labels will continue to wield the power and reap the majority of the benefits. Not saying it's right or fair, just that it is what it is. As for being a significant contributor, I'm not really sure what you're referencing. Are you saying a contributor on a single track doesn't deserve lifetime royalties for that track? If so, why not? Wouldn't they deserve royalties commensurate with the success of that single? Are you saying the contribution on a single track doesn't deserve lifetime royalties for the entire album? I'd be more willing to agree with that assessment BUT the royalty split is decided by the band, not Spotify, Apple Music, Play Music, Pandora, etc.
 

4jasontv

Suspended
Jul 31, 2011
6,272
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As for being a significant contributor, I'm not really sure what you're referencing. Are you saying a contributor on a single track doesn't deserve lifetime royalties for that track? If so, why not? Wouldn't they deserve royalties commensurate with the success of that single? Are you saying the contribution on a single track doesn't deserve lifetime royalties for the entire album? I'd be more willing to agree with that assessment BUT the royalty split is decided by the band, not Spotify, Apple Music, Play Music, Pandora, etc.

Define contributor. If all someone had little to no creative input beyond playing the instrument, then no, they shouldn't get royalties. Sure the band has the right to give some money for it, but I consider it bad form as an industry to do so. Pay them for their time like any other laborer. The problem with Spotify is that they are perpetuating the system, and yes, they can be blamed for that.
 
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69Mustang

macrumors 604
Jan 7, 2014
7,895
15,043
In between a rock and a hard place
Define contributor. If all someone had little to no creative input beyond playing the instrument, then no, they shouldn't get royalties. Sure the band has the right to give some money for it, but I consider it bad form as an industry to do so. Pay them for their time like any other laborer. The problem with Spotify is that they are perpetuating the system, and yes, they can be blamed for that.
Shouldn't that definition come from you? After all, you're the one who brought up the whole idea in the first place. Regardless, this is starting to veer into rabbit hole territory. Let's agree we have differing opinions on the topic.
 

4jasontv

Suspended
Jul 31, 2011
6,272
7,548
Shouldn't that definition come from you? After all, you're the one who brought up the whole idea in the first place. Regardless, this is starting to veer into rabbit hole territory. Let's agree we have differing opinions on the topic.
LOL - what? I defined it in the very next sentence. You quoted the definition. But sure, we can have differing opinions. You think people who didn't create something deserve to get paid (potentially indefinitely) and I think its absurd to support a broken system like that. No need to reply, as your signature tells us you only care about your own opinions.
 

Kabeyun

macrumors 68040
Mar 27, 2004
3,407
6,346
Eastern USA
One needs to see the much bigger picture here. Blockchain technology has the potential to cut away big parts of the licensing jobs the labels, distribution companies, royalty collection agencies etc. are doing now and will eventually bring artists a bigger piece of the revenue cake since there will be less other parties involved in between the artists and their audiences.
I appreciate that you're explaining a bit about improving artist compensation. Can you also explain this focus of the article:

The blockchain component aims to help creators and rights holders prove they are the owner of a piece of work and receive due payment. Spotify has faced legal trouble in the past over its failure to pay artists and publishers, which is said to be down to difficulties it has had in working out who to pay...
Are other streaming services struggling to figure out who to pay for the songs they're playing? Is this information so uniquely hard for Spotify, and Spotify alone, to come by that they needed to buy startup tech to figure it out? Something just doesn't add up.
 
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69Mustang

macrumors 604
Jan 7, 2014
7,895
15,043
In between a rock and a hard place
LOL - what? I defined it in the very next sentence. You quoted the definition. But sure, we can have differing opinions. You think people who didn't create something deserve to get paid (potentially indefinitely) and I think its absurd to support a broken system like that. No need to reply, as your signature tells us you only care about your own opinions.
My signature tells you I only care about my own opinions? That takes Olympic levels of leaps in logic to come up with that statement. My personal philosophy regarding products that I buy somehow becomes an overarching theme of internet discussion. Uh... wel-... yeah, I got nothin'. I'm gonna have to google some words to come up with an appropriate response for that one. Se-... nope. Gonna have to google. Brb.
 

bennyf

macrumors regular
Mar 29, 2011
194
278
USA
Blockchain is ground breaking technology that forms a distributed ledger, every company will be using some form of it in the future. Read up.

Blockchain is not magic fairy dust that generates money out of thin air or somehow makes every business process easier. It's a tool that solves certain problems, but those problems are not ones that most businesses face. Yes, it's super cool and I'm sure we'll see more applications, but the hype surrounding it is getting unbearable.

I appreciate that you're explaining a bit about improving artist compensation. Can you also explain this focus of the article:

The blockchain component aims to help creators and rights holders prove they are the owner of a piece of work and receive due payment. Spotify has faced legal trouble in the past over its failure to pay artists and publishers, which is said to be down to difficulties it has had in working out who to pay...
Are other streaming services struggling to figure out who to pay for the songs they're playing? Is this information so uniquely hard for Spotify, and Spotify alone, to come by that they needed to buy startup tech to figure it out? Something just doesn't add up.

I don't get how a company adds music to its servers and then makes millions of copies of the songs available to its customers without knowing where that music came from. I guess better to make amends after than get permission upfront.
 
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