Facebook ready to pay for music rights on videos
Facebook is offering major record labels and music publishers hundreds of millions of dollars so the users of its social network can legally include songs in videos they upload, according to people familiar with the matter.
The use 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 current law, rights holders must ask Facebook to take down those videos.
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 violates copyrights. Yet such a setup could take two years to complete, which is too long for both sides to wait, said the sources, who asked not to be named discussing details that aren’t public.
Facebook is eager to make a deal now so that it doesn’t frustrate users by taking down videos; partners by hosting infringing material; or advertisers, with the prospect of legal headaches.
The latest discussions will ensure that Facebook members can post video with songs just as it’s introducing Watch, a hub for video, and funding the production of original series. Facebook is attempting to attract additional advertising revenue and challenge YouTube as the largest site for advertising-supported video.
Facebook CEO Mark Zuckerberg said on the recent second-quarter earnings call that for the next few years, video will drive the business and determine how well the company performs.
While Facebook can still pursue professional music videos, it wants to make a priority of clearing user-generated material. Most of the videos being uploaded to Facebook are by individuals, not media companies. Tamara Hrivnak, a former YouTube executive, has been leading negotiations for Facebook since joining the company 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. Global music sales grew 5.9 percent in 2016, according to the International Federation of the Phonographic Industry. The Universal Music Group, owner of the world’s largest record label, reported a 15.5 percent increases in sales in the most recent fiscal quarter, while Warner Music Group, owner of the third-largest label, reported a 13 percent increases in sales.
Most of the growth is attributable to paid services from Spotify and Apple, though sales from advertising on YouTube are growing as well. The industry has rebuked YouTube time and again for not respecting intellectual property and paying too little to musicians.