When the Platform Sells, Who Gets Paid?
DistroKid is reportedly in acquisition talks valued at approximately two billion dollars. Goldman Sachs and the Raine Group are advising on the sale, according to reports from Music Business Worldwide and RAIN News citing anonymous industry sources. No deal has closed. No regulatory filing has been triggered. Insight Partners holds a substantial stake following a 2021 investment that valued the company at $1.3 billion. Silversmith Capital Partners retains a meaningful ownership position and board representation.
While those reported talks continue, a federal breach of contract lawsuit filed against DistroKid in the Southern District of New York is proceeding toward discovery.
The case is Albert v. DistroKid LLC et al, case number 1:25-cv-01705-KPF, filed February 27, 2025 (docket opened February 28, 2025). The plaintiff is Marcel Albert, professionally known as Marc Mysterio. The defendants are DistroKid LLC and Amazon.com Services LLC.
What the Complaint Alleges
Albert entered the DistroKid Distribution Agreement on or about June 8, 2021 through his agent. Under that agreement, according to the complaint, DistroKid received all royalties for exploitation of Albert’s music catalog and was required to remit 100% of those royalties to Albert, minus only actual third party fees for currency transfers or exchanges.
Between August 1, 2023 and September 30, 2024, Albert opted through DistroKid’s portal to submit his music catalog exclusively to Amazon Music.
According to the complaint, between December 1, 2023 and July 31, 2024, DistroKid received hundreds of thousands of dollars in royalties from Amazon for recordings from Albert’s catalog and failed to remit them in full. The complaint further alleges that DistroKid added a currency exchange markup of 3.7% when the actual cost to DistroKid was 0.5% or less above mid-market spot rate, and that the contract prohibited any such markup. DistroKid has not addressed the markup allegations on the merits in public filings.
For the accounting period of August 1, 2024 through September 30, 2024, the complaint alleges DistroKid received at least $245,000 in royalties from Amazon and remitted none of it to Albert. No royalty account statement was issued for that period.
Albert gave written notice of breach to DistroKid on October 13, 2024 and again on November 12, 2024. According to the complaint, DistroKid failed to remedy the breach.
What the Court Record Shows
On March 13, 2026, Judge Katherine Polk Failla issued an opinion and order on motions to dismiss filed by both defendants. DistroKid did not contest the breach of contract and accounting claims. The court noted that “DistroKid has not disputed the adequacy” of those two counts. Both claims are proceeding.
In her opinion, Judge Failla described the royalty obligation directly, writing that “DistroKid agreed to remit to Plaintiff 100% of the royalties that it collected in connection with the exploitation of his recordings.”
The court also made a specific observation about DistroKid’s financial position under the agreement, writing that “given the terms of the Albert-DistroKid Agreement, DistroKid stands to lose nothing if Amazon does not pay royalties that it owes under the DistroKid-Amazon Agreement.” The court used this finding to establish Albert as a third party beneficiary of the contract between DistroKid and Amazon, writing that “by offloading to Plaintiff its incentive to induce Amazon’s performance of the DistroKid-Amazon Agreement, DistroKid has indicated its intent to make Plaintiff a third-party beneficiary.”
The court dismissed the negligence claim against DistroKid, finding that the process DistroKid allegedly performed negligently “is outlined in the Albert-DistroKid Agreement and does not exist independently.”
Both DistroKid and Amazon filed their answers on April 24, 2026. The parties are due to submit a joint case management plan by May 8, 2026.
The Streaming Record
Albert’s Amazon Music for Artists account, attached as exhibits to the complaint, documents the following. Between September 15, 2023 and September 14, 2024, Albert recorded 81,360,010 total streams from 14,761,747 listeners. On August 23, 2024, he recorded 748,233 streams in a single day. On September 12, 2024, that number was 2,354. On April 6, 2025, it was 40.
The Terms of Service
DistroKid’s Distribution Agreement, quoted in Judge Failla’s March 13, 2026 opinion, states the company reserves the right to decline to provide distribution services “for any reason in its business judgment.” The agreement also states that digital stores “may choose not to carry one or more of those Recordings at all” or remove them “at any time per their policies and practices,” and that DistroKid “couldn’t make any guarantees.”
The Acquisition Context
No acquisition of DistroKid has been confirmed. The reported sale discussions, if completed, would result in a financial event for Insight Partners and Silversmith Capital. DistroKid’s publicly available distribution agreement does not address what happens to artist royalty obligations in the event of a change of ownership.
Room Reports will continue covering the documented record as it develops.
The documentation is public. The sources are held and available upon request.
Room Reports is an independent publication covering the industries and systems that determine whether creators own what they make.