Universal Music Group Strikes First Major Licensing Deal With Facebook
Writes Lucian Grainge, "Our deal with Facebook leverages... the wealth of data we've amassed to win both greater flexibility as to how our music is offered to the public."
Prepare to experience new ways to share music on Facebook as the social media giant has announced an unprecedented licensing deal with Universal Music Group. The global, multi-year deal makes UMG's recorded and publishing catalogs available for videos and what they're calling "other social experiences" across Facebook and its wildly popular photo-sharing service Instagram, as well as the A.I.-based Oculus brand.
In an internal memo on Thursday, UMG's chairman/CEO Lucian Grainge told staff: "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."
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."
One of those functionalities will be to experiment with music-based products to Facebook's instant messaging service, Messenger.
The other major record companies are nearing similar deals, sources tell Billboard. A joint statement from the company said the deals will "serve as a foundation for a strategic partnership roadmap that will deliver new music-based experiences online." All told, such licensing deals with the social media giant could generate roughly $1 billion for the music industry over the next two years, sources said.
"Together, Facebook and UMG are creating a dynamic new model for collaboration between music companies and social platforms to advance the interests of recording artists and songwriters while enhancing the social experience of music for their fans," said Michael Nash, UMG's executive vp of digital strategy. "This partnership is an important first step demonstrating that innovation and fair compensation for music creators are mutually reinforcing -- they thrive together."
Tamar Hrivnak, head of music business development and partnerships at Facebook, said "There is a magnetic relationship between music and community building. We are excited to bring that to life on Facebook, Instagram, Oculus and Messenger in partnership with UMG. Music lovers, artists and writers will all be right at home as we open up creativity, connection and innovation through music and video."
This of course isn't UMG first major licensing deal for the week. Earlier, the company announced a multi-year agreement with YouTube, giving the video platform licenses from all three major record companies. In addition to clearing a path to YouTube's planned rollout of a reimagined music streaming service in 2018, the deal grants UMG the ability to put content behind YouTube's paywall, potentially making some music available only on the YouTube Red service and not on YouTube's free tier.
Hannah Karp contributed to this article.