Facebook Likes Music to the Tune of Multi-Million Dollar Licensing

Facebook music video steaming

Facebook has undertaken a music licensing initiative that could double song owners’ video streaming revenues to roughly $1 billion.

Facebook is offering song rights-holders “hundreds of millions of dollars” so it can legally use songs in videos uploaded to the service. The arrangement, negotiated over the past few months, according to Bloomberg, which was the first to report the news, seeks to avoid frustrating users by having to remove videos they upload, as well as sparing partners and advertisers music headaches.

It could also potentially benefit Facebook’s push into original content. In August, the company began a limited rollout of the Watch video hub. The YouTube challenger is designed to help Facebook get a meaningful share of media adverting dollars. Watch features original programming financed by Facebook, along with videos from other creators, in a tab that can remember and personalize user interests over time.

Facebook is developing a system to identify and tag music so as to identify copyright particulars — a process that the company estimates will take two years to complete. In the meantime, the Menlo Park-based company is trying to work out blanket license agreements. The immediate priority is clearing music for user-generated content, currently by far the most prevalent form of music on the service.

Facebook CEO Mark Zuckerberg predicted video sharing will soon surpass that of text and photo-sharing, and he emphasized to investors on his  second-quarter earnings call that video will be an important revenue-driver in which he plans increased investment.  Facebook this year hired former YouTube and Warner/Chappell Music Publishing executive Tamara Hrivnak to handle its music licensing negotiations. 

Global music sales grew 5.9 percent last year, according to worldwide trade group the International Federation of the Phonographic Industry, which attributed the increase to thriving digital and streaming activity. The IFPI said video streaming services including YouTube generated $553 million for music rights-holders. With its 1.94 billion monthly users and $27.6 billion in revenue for 2016, the company could potentially double that. 

Music Business Worldwide reported that Facebook recently advertised for three additional music licensing positions to work under Hrivnak.

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