Mediachain Labs announced earlier today that it had been acquired by popular music streaming service Spotify for an undisclosed amount. Funded by both Andreessen Horowitz and Union Square Ventures in 2016, Mediachain was working on a blockchain-based rights management platform that promised to “automate attribution, preserve history, provide creators and organizations with rich analytics about how their content is being used.”
Spotify is rumored to be building up to an IPO in 2018, and adding blockchain expertise to their talent pool will certainly reflect well on Wall Street. However, the rationale behind the acquisition actually stems from a class action lawsuit the company began fighting in 2015.
Spotify Not Paying Royalties?
The NY-based company had come under fire for its failure to pay the appropriate royalties to copyright holders in a high-profile case brought forward by artist advocate David Lowery. By 2016, the bill had reached a hefty $200 million in potential damages, but Spotify managed to stave off the litigants by agreeing to build a “dedicated matching interface for publishers and songwriters” to pair their work with their respective publishing rights.
The use case for Mediachain could not have been more obvious. In the founders’ announcement on their blog, the Brooklyn startup describes their new owner as “a champion of transparency.” One could argue that, in Spotify’s case, it was a legal imperative.
It’s unclear what will become of the “open, decentralized media blockchain” that the Mediachain team initially set out to build. They’ve indicated that they will release all their current code on Github for free, although with no project maintainer and no commitment from the team to continue working on it, it’s unlikely that anyone else will pick up the mantle.
There’s also nothing in Spotify’s agreement that require them to make their matching interface available to anyone other than partners and creators. With few incentives to make an open platform, it’s likely that we’ve seen the last of decentralized media blockchains for now.
Can we blockchain all the things? Let’s hear your thoughts.
Images via Pixabay