[Editor Charlie sez: More on royalty deadbeat Facebook’s charm offensive, this time from Jim Cramer’s The Street featuring quotes from David Lowery. And notice–no mention of takers for the hillbilly deal offer.]
For years, Facebook chose not to pay licensing fees to music labels or songwriters despite the site’s billions of hours of uploaded music. The world’s most popular social media platform argued that because the site didn’t make it possible for users to search for a particular song, in the manner of Alphabet Inc.’s (GOOGL) YouTube, it wasn’t using music to drive sales….
Yet as Facebook’s priorities have evolved, so has its view on music. As CEO Mark Zuckerberg has repeatedly said of late, Facebook is focused on becoming a hub for premium video content, both from advertisers and users as well as original content for its Watch and other platforms.
As a result, Facebook has begun to negotiate licensing deals with the industry’s three major music labels as well as Merlin BV, which represents hundreds of independent distributors, according to a person familiar with the talks. A deal is likely to take place within months rather than years, the source said. News that Facebook had offered the labels hundreds of millions of dollars so that its users might legally upload music to the site was initially reported by Bloomberg on Tuesday, Sept. 5.
“It’s a major win for songwriters in that Facebook is actually admitting they need licenses,” said David Lowery, a lecturer in the music business program at the University of Georgia and frontman for the bands Cracker and Camper Van Beethoven. “If you expect to get major brands to spend big money on video advertising that’s professionally produced, you absolutely need licenses. That’s what’s driving this.”