Spotify has acquired the Brooklyn-based blockchain startup Mediachain in an arrangement that could help the streaming giant better track online works and help pay artists what they’re owed.
In a post on the Mediachain blog, the company says Spotify will leverage its newly acquired technology to “further the streaming leader’s journey towards a more fair, transparent and rewarding music industry for creators and rights owners.”
Financial terms of the deal were not revealed, though the startup had raised some $1.5 million from a variety of investors including Andreessen Horowitz and Union Square Ventures, according to various reports.
The Mediachain team will join Spotify’s New York City offices, whereupon they’ll set about solving problems matching up and managing unpaid song royalties with their rightful owners.
It’s proven to be an expensive problem for Spotify in the past. The U.S. National Music Publishers’ Association (NMPA) last year reached settlement (said to be worth $30 million) on unmatched and unpaid royalties, an issue which had triggered a number of lawsuits against the Swedish company and other streaming services.