Facebook primed to enter the music streaming market
With the overwhelming activity of music streaming platforms, and the rumoured business actions in the future, it was only a matter of time until a global technology company also joined the frenzy. Entering the market with big players such as Spotify, SoundCloud and TIDAL, it is now Facebook is is double its efforts to enter the music industry in a big way.
Sourcing from Bloomberg, the social network is after “A deal [that] would govern user-generated videos that include songs and potentially pave the way for Facebook to obtain more professional videos from the labels themselves.”
Motivated to continue prioritising their video content, the medium gives them more opportunity monetise their product. Challenging their primary competition, with Google’s ownership of YouTube, its active user base of around two billion people makes the prospect of Facebook in music licencing market very lucrative.
However, there are a handful of significant implication to consider on the topic.
Threatening the $70 billion a year industry of televised advertising, the move would also have a major impact on the YouTube platform. Able to match, or even exceed the $1 billion in advertisement revenue of the market leader, Facebook’s entry would be a major shake-up of the monopoly Google currently has. Also opening the door to combine its other platforms of SnapChat and Twitter, the prospect is one that will come under great scrutiny.
With the potential of now licensing rights to a second tech company to provide free streaming could negatively impact revenue streams from paid services like Spotify and Apple Music for the respective labels. In addition, the protection of copyright on a site such as Facebook is more than a complicated matter. Bloomberg notes the concerns of the latter point:
“For Facebook to obtain professional video — both music and otherwise — it may have to alleviate concerns about how clips will be presented. At the moment, most Facebook users see videos in their newsfeed, where a clip from a TV show may be followed by a baby photo and then a friend complaining about romantic frustrations.
Facebook must also finish a system to police copyright-infringing material akin to Content ID, the system used by YouTube. Videos on the site already feature a lot of music for which artists don’t receive royalties — a major source of tension.”
Pivotal to its successful implementation and acceptance, Facebook’s relationship with major labels will be central to its success. Able to leverage to a greater effect than SoundCloud, the sheer size of the tech giant will more likely allow them to ink deals with major imprints.
In saying that, there is also a hope, and opportunity, for Facebook to begin “…licensing music for the entire site,” as David Israelite, President of the National Music Publishers Association (NMPA) stated to Bloomberg. Possibly running into difficulties due to Facebook’s deal through the Digital Millenium Copyright Act, which doesn’t hold sites like Facebook and YouTube responsible for hosting pirated material.
While much more could be mentioned, the future of music access could be vastly different in only a couple of years. In turn, demanding a full picture is taken by all stakeholders in the action.