Facebook won’t stop the music

Before I started law school, I spoke to a lawyer at Universal Music about licensing, copyright, and other fascets of law pertaining to the music industry. Since becoming a lawyer myself, I’m even more fascinated by the ways in which commercial contracts, digital strategy, artists’ rights and expression interact with and shape each other: Facebook’s new global, multi-year agreements with Universal and Sony Music are perfect examples of such dynamism.

Facebook first inked a deal with Universal Music in late December 2017. The deal with Sony,  the largest music publisher in the world, was announced on 9 January. These deals allow Facebook and Instagram users to upload homemade video clips containing songs owned by Universal or Sony, without generating a takedown notice.

The sounds of… statute?  As more and more Facebook users share music or videos in their posts, some of the content may include copyright-protected material: for example, songs by a famous pop singer playing in the background of a makeup tutorial video.

In the context of music, the following categories of works are protected under UK copyright law:
1) Original literary or musical works which are recorded in some way (sections 1(1) and 3(2), Copyright, Designs and Patents Act 1988); and
2) Sound recordings and films (section 1(1), CDPA 1988).

Facebook offers monitoring tools that alert the owners of certain intellectual property rights (“rightsholders”) about suspected copies of their videos and songs on Facebook, or other unauthorised uses of their brand. Rightsholders can send takedown requests to a team of Facebook content analysts. In the first six months of 2017, nearly 3 million posts – including videos, ads and other forms of content – were removed from Facebook platform following complaints of intellectual property rights infringement.

Accordingly, Facebook has been attempting to enter agreements with major record labels and music publishers  — ie, music rightsholders — to allow its users to include songs in the videos they upload (Bloomberg). Universal Music Group and Sony Music are now the first two major music companies to license their recorded music and video catalogues for use across Facebook and Instagram.

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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. —Michael Nash, Executive VP of Digital Strategy, Universal Music

If Facebook or Instagram users upload a homemade video clip that has a part of a song owned by Universal or Sony playing in the background, the clip can stay up without generating a takedown notice. That has obvious benefits for Facebook, as the social media giant encourages people to make and share content on its services. As the agreements are global, creators don’t have to worry about local licensing laws either (remember, copyright laws vary from country to country).

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We are thrilled that in signing this agreement Facebook recognizes the value that music brings to their service and that our songwriters will now benefit from the use of their music on Facebook. We are looking forward to a long and prosperous relationship. —Martin Bandier, Sony/ATV Chairman

Business Implications: battle of the platforms.  For the record labels, the deals will provide significant new revenue source. While no comments have been made on the financial arrangements of the deal, Facebook likely wrote the music labels a large cheque upfront, with more money to follow over the coming years.

Perhaps most importantly for Universal and Sony is that these labels now have increased bargaining power in respect of negotiating with Google’s YouTube, the most popular online destination for listening to music.

For years, music labels and YouTube have been in a symbiotic but sometimes contentious relationship: in fact, that relationship was the focus for my masters’ thesis! Music generates a ton of views for YouTube, which translates into more advertising revenue for YouTube. In exchange, YouTube pays the labels for the license to feature songs on its platform: but labels consistently complained that YouTube doesn’t pay them nearly enough.

With the new Facebook deal, Universal and Sony can tell YouTube that unless YouTube pays more for their songs, the label will take their music off of YouTube and move it to the worlds’ biggest social network instead. Likewise, this deal also positions Facebook as a more direct competitor to YouTube.