Why Facebook Just Signed a Deal With Universal Music


YouTube and the record labels have had to overcome disagreements over the sharing of advertising revenue, the features and music available to free users and viewers outside the US. Under the accord, Facebook users will be able to upload Universal's songs and share music through Facebook, Instagram and Oculus virtual-reality technology, the firms said Thursday in a statement.

The move comes as Facebook's 2 billion plus users post and view more videos than ever before. While Universal was first, according to Variety, Warner Music may be next to sign on.

With this deal, the companies hope to "advance the interests of recording artists and songwriters while enhancing the social experience of music for their fans", says Michael Nash, UMG's Executive Vice President of Digital Strategy, in a statement. "Going forward, the companies will experiment hand-in-hand to introduce new music-based products to these Facebook platforms, including Messenger".

A successful music streaming service would strengthen YouTube's relationships with music rights holders.

"This partnership is an important first step demonstrating that innovation and fair compensation for music creators are mutually reinforcing - they thrive together". The deal sets Facebook up as a more direct competitor to Google's YouTube, the most popular destination online for listening to music.

It was not immediately clear, however, how Universal and its artists would be compensated for the use of their music. "Music lovers, artists and writers will all be right at home as we open up creativity, connection and innovation through music and video". The other major record labels are close to cutting similar deals with Facebook, sources told Billboard. We are excited to bring that to life on Facebook, Instagram, Oculus and Messenger in partnership with UMG. The agreement works across all of Facebook's platforms, including its newsfeeds, Instagram and Oculus, according to a joint press release. For context, music streaming leader Spotify has converted around 40% of its active users into paying subscribers.