How the new deal between Facebook and Universal Music is a game-changer
On Thursday, Facebook Inc and Universal Music Group announced a global agreement that will enable users to upload videos featuring music from Universal’s library across the social media network as well as Instagram and Oculus.
Through the agreement, which is Facebook’s first with a major record label, the social media company will no longer have to require users to take down videos featuring music from Universal’s catalogue due to copyright infringement. Terms of the deal were not disclosed.
Facebook’s deal with Universal Music Group comes as the world’s largest social media site is making a big push into video to keep users on its site and attract advertisers.
Earlier this year it launched its Watch video service, which features shows from the likes of Buzzfeed, Discovery Communications as well as some sports like Major League Baseball.
The partnership comes days after Bloomberg reported that YouTube had signed a long-term agreement with Universal Music Group and Sony Music Entertainment.
The licensing deal could help Facebook better compete with Alphabet Inc’s YouTube since music videos are the most popular category on the site, said Brian Wieser, an analyst at Pivotal Research.
“With this deal, Facebook has licensed content from the biggest player in the biggest genre of video on YouTube,” he said.
The multi-year agreement with Universal will be expanded to include Facebook Messenger, Universal said.
According to Billboard, UMG’s chairman and CEO Lucian Grainge issued an internal memo on the matter on Thursday.
“As with our deal with Spotify earlier this year and our license renewal with YouTube, our deal with Facebook leverages the experience we’ve gained and the wealth of data we’ve amassed to win both greater flexibility as to how our music is offered to the public as well as fairer compensation for our artists — as we continually refine the balance between direct promotion and monetization,” he told staff.
The companies explained that the partnership will give Facebook and Instagram users the ability to upload and share videos that contain licensed music. “In time,” a press release on the partnership noted, “functionality will expand to enable access to a vast library of music across a series of social features.”
Additional reporting by Reuters
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