Universal Music Group and Facebook sign multi-year licensing agreement

Music giant Universal Music Group has today announced a new “multi-year” licensing agreement with Facebook that will expand across the social company’s product line. The move will soon bring UMG’s music catalog to Facebook, Instagram, and Oculus. The news follows a similar agreement made between UMG and YouTube earlier this week.

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With Facebook’s ever-growing video platform, getting licensing agreements in place sets the groundwork for appropriate compensation when using artist content.

“This partnership is an important first step demonstrating that innovation and fair compensation for music creators are mutually reinforcing – they thrive together. We look forward to Facebook becoming a significant contributor to a healthy ecosystem` for music that will benefit artists, fans and all those who invest in bringing great music to the world.”

– Michael Nash, Executive Vice President of Digital Strategy, Universal Music Group

The emphasis in Nash’s statement seems to be on “fair compensation”. This partnership appears to be one out of necessity. Having proper licensing agreements in place will help assuage artists and companies that don’t feel they are getting their rightful share. The licensing agreement is also a natural fit for Instagram where ephemeral content is being uploaded daily through Instagram Stories.

How exactly this partnership will be handled in Facebook’s ecosystem is yet to be seen. UMG’s announcement mentions that newer music-based products will be built out between the two companies. Based on the partnership announced between the music group and YouTube, it sounds as though this agreement is a method to curb financial losses and the new products are a byproduct.

By moving to appropriately license music on its platform, Facebook is also opening the door for further control on user-generated content. Instead of allowing any song, licensed or unlicensed, to be added to a video, appropriate steps by the creator may need to be taken.

Over the past few years, Facebook has been more aggressive with removing videos with copy-written music, but this could allow the rules to be slightly more lax while having UMG taking a cut of ad revenue.

The agreement could prove especially beneficial for Universal Music Group who’s catalog includes top musical artists in today’s pop culture like Taylor Swift, Lady Gaga, Kanye West, and Lana Del Rey.

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