The acquisition of Loudwire is another step in the growing trend of acquisitions in the music publishing industry.
The company announced this week that it had signed a multi-year deal to purchase Loudwire.
Under the deal, the company will now be led by a board of directors consisting of Loudawolf CEO, CEO Mark Thompson and Chief Creative Officer, David A. Brown, who will work closely with Loudwire founder and CEO, Paul Rizzuto.
The purchase of LoudWire comes as the music industry continues to grapple with the fallout from the massive copyright settlement with Apple, which will end up costing the company $2.5 billion in legal fees and royalties, as well as a host of other lost revenue.
The settlement was reached with Apple agreeing to pay $3 billion to the Recording Industry Association of America, and others, for a catalogue of songs illegally downloaded by users of the iPhone and iPad devices.
The terms of the deal are still being negotiated, but it is likely to be significantly more favorable than the one struck with Apple in 2015.
Under that deal, Apple had to pay damages of $2 billion and a fine of $1.5 million for copyright infringement.
However, the $2,500 fine was not offset by any other payments.
The deal also included an additional $1 million payment in respect of loss of earnings due to litigation.
The $1,000 payment in the first year is expected to cover the initial legal fees, which were estimated at between $300,000 and $600,000 per infringed song.
The additional payment is expected over the course of the agreement, which could be $1 to $2 million.
In addition to the purchase of the company, Loudwire also announced a strategic partnership with Spotify.
In addition to its distribution services, LoudWire will also be publishing the band’s catalog, and Loudwire will also continue to provide content to the streaming service.
The Loudwire board, which is composed of Thompson, Brown and Rizzulo, has already made a number of significant acquisitions in recent years, including acquiring a controlling stake in Spotify and the music streaming platform, Apple Music, as part of its acquisition of Beats Electronics in 2013.
The deal with Loudawild will mark the second acquisition of a major music publisher in recent months.
The acquisition by Warner Music Group of the online music publisher Rhapsody in 2015 was a major step in increasing the quality of content available on the service.