As Facebook continues to grapple with its role in proliferating "fake news" amidst the heated U.S. election this year, it has another showdown looming on the horizon -- this one with the music industry. In the wake of NMPA president/CEO David Israelite's op-ed in Billboard in October, in which he called out the social media giant for hosting videos with copyrighted music without securing licensing deals or paying creators, Facebook is working to develop a copyright identification system -- similar to YouTube's Content ID -- that would find and remove videos containing copyrighted music, a source tells Billboard. The story was first reported by the Financial Times.
"In a recent snapshot search of 33 of today's top songs, NMPA identified 887 videos using those songs with over 619 million views, which amounts to an average of nearly 700,000 views per video," Israelite wrote in his op-ed, noting that many of the videos are fan-created cover songs -- and that none have been licensed by the publishing industry. "In reality, the scope of the problem is likely much greater because, due to privacy settings on Facebook, it's almost impossible to gauge the true scale."
That scale is important for creators who, in a streaming world, generally get paid on a per-stream basis when their music is properly licensed to services like Spotify or Apple Music, and it adds up quickly. YouTube, despite coming under fire for almost the entire year due to what recording industry trade groups call the value gap and low royalty rates, announced earlier this month that it paid $1 billion to the music industry through advertising alone in 2016 (though one recording industry executive questioned the figure). And from Content ID's launch in 2007 through July 2016, the company claims it has paid $2 billion to copyright owners through that system alone. With some 170 million users in the U.S. alone and 1.79 billion monthly users worldwide, Facebook outstrips even YouTube's billion-plus users in scale.
One music industry source, confirming Facebook's plans to develop a copyright ID system, says the company has a massive infringement problem in regards to music on the site. "They see the huge amount of traffic music content is responsible for on their platform and don’t want to be on the wrong end of an artist fight," the person says. "They also see that there’s a potential opportunity to position themselves as friendly to content creators as opposed to YouTube, so they are working fast to get this right."
Facebook has worked with the music industry in the past, test-driving a content partnership with Warner Music Group in Australia this past May, for instance, and has even ventured into this type of copyright system before with its Rights Manager tool launched this April, though that had a video focus. But as the company continues to push its video offerings and boost Facebook Live, the music industry is turning its attention toward the social media-turned-maybe-media company.
Talks between Facebook and the major labels are underway to license content moving forward, Billboard has learned, though they are still in the preliminary stages. In its report, the Financial Times referenced a source saying a deal would not be done before the spring.
A rep for Facebook did not return a request for comment as of press time, but it stands to reason that the company would like to avoid a showdown with the music industry, particularly as artist compensation continues to be a recurring theme from songwriters, producers, publishers and the rest.
"The reality for Facebook and YouTube is that more and more they are transitioning from tech platforms to media companies," the source says. "And the more they look like media companies, the more they are going to have to act like them and respect creators and pay for content."