Thursday, July 16, 2015

Why Would Facebook Start A New Music Service?

Facebook Music image
Don't look now but Facebook has been in talks with the major labels and many believe that's because the company is seriously considering launching a music service to compete with Apple Music, Spotify, Pandora, etc.

One advantage for Facebook is that, unlike Spotify and Pandora, it wouldn't have to rely on the income from music to keep the lights on. Of course this is a strength of both Apple and Google.

That said, there's another more likely scenario at play.

Facebook has recently dedicated itself to making video a bigger part of the service, providing better engagement and ad rates than YouTube to start the ball rolling. While major brands have tried Facebook videos with some success, the platform is still having trouble getting smaller brands and page owners to post.

The most watched content on YouTube is music, so by just getting the official music videos of stars and superstars on the platform, Facebook believes it can make some giant strides in taking a chunk of viewership from YouTube, and hopefully prime the pump for more user generated content.

Reportedly a pilot program to post some music video trials will launch as soon as the licensing deals have been sewn up.

The ad revenue split is supposed to be identical to YouTube, with 45% going to the rights holder (in this case, the major labels) and 55% going to Facebook.

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