After years of negotiations with music companies, Facebook has signed a spate of licensing deals in the past three months, including agreements with Universal Music Group, the world’s largest label, and Sony/ATV, the sector’s biggest publisher.
These deals allow Facebook’s users to share videos with music in the background — such as a fan’s cover version of a hit song, wedding dances or online karaoke. Facebook wants to encourage video on the site and not slap users with takedown notices, or worse, face legal action from record labels.
The deals mark Facebook’s major step into music, pitting the company more directly up against YouTube, and could potentially bring billions of dollars in payouts for the big music companies.