Facebook’s Music Deal

by Koka Tarini Siddhartha

A few weeks ago, Facebook made one of its biggest announcements yet–it had entered into a music licensing agreement with Universal Music Group (UMG). This garnered a lot of attention from users of the social media giant, content creators, and also bred speculation about the impact of this agreement on competing entities such as YouTube.

What was this deal all about?

Facebook had been in talks with UMG about a licensing agreement since 2015 although it took over two years to finally materialise. This agreement allows Facebook and its sister ventures, Instagram and Oculus (a virtual reality platform), to use and upload music licensed by UMG.

Adele, Taylor Swift, and Lady Gaga are a few artists in UMG’s roster. There have also been rumours that Facebook is in talks with other music label biggies including Sony Music and Warner Music Group to get into similar arrangements.

Mark Zuckerberg has publicly mentioned that he intends on transforming Facebook from a media to a tech company. One of Facebook’s first steps in this direction was when it introduced Facebook Watch in August, 2017. Watch is a combination of original TV shows curated and produced by Facebook partners and it also allows users to create their own video playlists to share with their friends.

What are the implications of this deal?

The Facebook-UMG deal not only boosts Facebook’s video (and tech) efforts through Watch, but it also propagates Facebook as a music platform. In our previous post here, we have highlighted Facebook’s numerous encounters with copyright violations. By signing this multiyear and (rumoured to be) multimillion dollar deal with UMG, Facebook has considerably altered the platform for many players.

For users, it will become easier to upload and share audio or video clips that include copyrighted music. A cute dog or baby video with Justin Bieber’s ‘Sorry’ playing in the background will no longer be taken down just because it matches with a song on Facebook’s Rights Manager or Audible Magic systems.

Facebook could potentially become a music destination for music lovers to engage with each other and it may even offer live streaming of concerts in the future. Apart from its significant revenue source through Facebook, UMG will also open up to a new market and gain a larger audience.

Lastly, content creators will have the opportunity to showcase their talent on Facebook and directly reach out to their audience. Market entrants can take advantage of this agreement to demonstrate their skill in mixing or perhaps the incorporation of music in video games on Oculus – the future looks very exciting!

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