Face­book makes bid for la­bels’ mu­sic rights

Irish Independent - Business Week - - BUSINESSWEEK - Erich Zann

FACE­BOOK is of­fer­ing ma­jor record la­bels and mu­sic pub­lish­ers hun­dreds of mil­lions of euro so the users of its so­cial net­work can legally in­clude songs in videos they up­load, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

The post­ing and view­ing of video on Face­book has ex­ploded in re­cent years, and many of the videos fea­ture mu­sic to which Face­book doesn’t have the rights. Un­der law, rights hold­ers must ask Face­book to take down videos with in­fring­ing ma­te­rial.

Mu­sic own­ers have been ne­go­ti­at­ing with Face­book for months in search of a so­lu­tion, and Face­book has promised to build a sys­tem to iden­tify and tag mu­sic that in­fringes copy­rights. Yet such a setup will take as long as two years to com­plete, which is too long for both sides to wait, said the peo­ple, who asked not to be named as they are dis­cussing de­tails that aren’t pub­lic.

Face­book is eager to make a deal now so that it no longer frus­trates users, by tak­ing down their videos; part­ners, by host­ing in­fring­ing ma­te­rial; or ad­ver­tis­ers, with the prospect of le­gal headaches.

The lat­est dis­cus­sions will en­sure Face­book mem­bers can up­load video with songs just as it’s rolling out Watch, a new hub for video, and fund­ing the pro­duc­tion of orig­i­nal se­ries. Face­book is at­tempt­ing to at­tract bil­lions of dol­lars in ad­di­tional advertising rev­enue and chal­lenge YouTube as the largest site for advertising-sup­ported video on the web.

Face­book CEO Mark Zucker­berg said on the com­pany’s sec­ond-quar­ter earn­ings call that for the next few years video will drive Face­book’s busi­ness and de­ter­mine how well the com­pany per­forms.

He told in­vestors to ex­pect the com­pany to con­tinue to in­crease its in­vest­ment in the for­mat, as it sees video shar­ing over­tak­ing text and photo shar­ing in the fu­ture.

While Face­book can still pur­sue pro­fes­sional mu­sic videos, the com­pany chose to pri­or­i­tize clear­ing user-gen­er­ated ma­te­rial.

Most of the videos be­ing up­loaded to Face­book are by in­di­vid­u­als (as op­posed to me­dia com­pa­nies).

Ta­mara Hriv­nak, a for­mer YouTube ex­ec­u­tive, has been lead­ing ne­go­ti­a­tions for Face­book since join­ing the com­pany ear­lier this year.

The money from Face­book is the lat­est wind­fall for a mu­sic in­dus­try surg­ing from the growth of on-de­mand stream­ing ser­vices Spo­tify and Ap­ple Mu­sic.

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