Spotify Buys Licensing Firm Loudr to Help Track and Pay Royalties to Publishers

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Spotify has acquired music licensing firm Loudr to help simplify and streamline its ability to track and pay royalties to music publishers. The newly-public streaming service said the Loudr team will work out of its NYC offices and help in its "continued efforts towards a more transparent and efficient music publishing industry for songwriters and rights holders."

Loudr originally launched in 2009 as A Capella Records. The licensing service catered to a capella groups and offered mechanical rights and a direct-to-fan storefront for cover songs. The company then rebranded in 2013 and opened itself up to other genres. In 2015, it launched a product called Loudr Licensing so that artists and labels can acquire -- for a small fee -- the requisite mechanical license needed to monetize a cover song on Spotify, Apple Music and other digital channels.

In addition to integrating with Spotify to further its pressing publishing interests, Loudr's team of specialists and technologists will continue to provide select services to its publishing and aggregator partners, the company said.

"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," said Adam Parness, ‎global head of publishing at Spotify. "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."

The acquisition of Loudr could potentially help smooth Spotify's historically rocky relationship with songwriters and publishers, just as Congress moves forward in reforming the royalty system as part of the Music Modernization Act. Joe Conyers III, GM and co-founder of Songtrust, which manages a million-plus songs and represents over 100,000 songwriters, gave the acqui-hire a tentative thumbs up.

"For over ten years Spotify seemingly neglected to invest in a platform to best manage the song copyrights powering their service," Conyers said in a statement to Billboard. "This has resulted in an extremely challenging relationship for Spotify with songwriters and their music publishing partners. While it doesn't address inequitable royalty rates, the acquisition of Loudr puts Spotify on the right path towards accounting to songwriters and publishers in a more timely and accurate fashion."