Just weeks after signing a large licensing deal with leading indy label representative ICE, Facebook has continued its march into the world of music with the news that it has now added Warner Music Group into the mix, the last major label that was not yet working with the social network.
Facebook has signed a wide-ranging licensing deal that covers all of Warner Music’s recorded and published music catalogs. Music from these can now be used in “social experiences” on Facebook, Instagram, Messenger and Occulus. (WhatsApp for now is not included.)
The list of artists in the Warner stable is massive: it includes iconic names like the Eagles and early Madonna (pre 2010) through to Ed Sheeran, Nina Simone and Jay-Z.
Facebook has been working on a more comprehensive music licensing policy for months, some believe as it gears up to take a bigger step into music services itself.
But before anything like that can even be considered, though, it has had to sort out royalties around music that appears on Facebook already. A Warner spokesperson confirmed to me that it’s not disclosing any terms. But reports have estimated that the prices of these deals are in the hundreds of millions of dollars to cover Facebook’s 2.1 billion registered users.
Warner was the last big hold-out among the world’s “big three” biggest labels, alongside Sony and Universal Music, which had yet to sign on to working with Facebook, something it highlighted when commenting on today’s deal.
“The team at Facebook is creating a truly innovative product and is showing real commitment to its participation in the growth of the music business,” said Eric Mackay, EVP, Global Digital Strategy, Warner/Chappell, in a statement. “We’ve taken our time to arrive at the best possible deal, one that recognises the value that music creates on social networks, while empowering our songwriters to reach audiences around the world, in a way that will spark creativity and conversation among their fans. Our incredible catalogue of songs will be represented throughout Facebook’s platforms and we’re excited to work together to create new opportunities for both our songwriters and Facebook’s users.”
In addition to Warner/Chappell, labels associated with WMG include Asylum, Atlantic, Big Beat, Canvasback, East West, Elektra, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, Warner Bros., Warner Classics and Warner Music Nashville.
This is a very significant deal: it will mean that Warner Music will now be able to collect royalties on tracks that are used in videos and messages; and those posting content on Facebook and its network of social sites will be doing so in the legal clear.
For now, this covers just organic content from consumer users, but it sounds like the two will also be exploring how to bring this into advertising and other paid posts as well.
“Under the partnership, WMG and Facebook will continue to work together to develop new products that enable users to personalize their music experiences across Facebook, Messenger, Instagram and Oculus,” Warner said in a statement, with the commercial aspect highlighted specifically by Ole Obermann, Warner Music Group’s Chief Digital Officer.
“Our partnership with Facebook will help expand the universe of music streaming and create supplementary revenue for artists,” he said. “Fan-created video is one of the most personal, social and often viral ways that music is enjoyed, but its commercial potential is largely untapped. This collaboration will lead to new possibilities for our artists, while enhancing the user experience across Facebook, Instagram and Oculus, and enabling people to communicate and express themselves using the music they love.”
This is the latest in a string of music partnerships that Facebook has signed in recent months. Others include an agreement with Universal Music Group over user-generated videos; a deal with Sony/ATV; and a licensing deal with Kobalt, HFA/Rumblefish and Global Music Rights.
Separately, Facebook also has also pursued a secondary route of giving creators access to “no-name” music via a new service it’s launched called Sound Collection.
Facebook has so far declined to comment on its longer-term ambitions in the world of music, but it has long been rumored to be interested in building its own streaming service, along the lines of Spotify, Pandora, and Apple Music.
More generally, as Facebook has faced a drop-off in user growth in mature markets, it’s been looking for more ways to engage those users it already has, in competition with a plethora of rival social media services and dozens of other digital distractions, from Netflix to games to fiddling with your smart home appliances.
As Spotify — which is now preparing to go public — has shown, there is a lot of potential customer loyalty and scale in building successful standalone streaming services. It could be that Facebook is taking a page from that playbook and sees music as one potential way of helping to strengthen its own community efforts — community being the keyword at Facebook these days
“When Facebook and music come together, we have the power to bring people closer together,” said Tamara Hrivnak, Head of Music Business Development and Partnerships, Facebook, in a statement. “Music brings to life the happy, the sad, the throwback and the funny in all the moments and messages we share with friends. We are delighted to partner with Warner, its artists and songwriters, and welcome them to our platforms.”
We’ll update this post as we learn more.