Warner Music Group became the latest major music company to announce a new licensing agreement with Meta. The agreement will allow WMG and its artists to receive a portion of the revenue from the use of licensed music on Facebook Articles by the creator.
The deal has been confirmed by Warner Music Group CEO Steve Cooper on an earnings call on Tuesday (August 9), almost two weeks after the competitor Universal Music Group revealed that they had formed a similar partnership with the Facebook owner.
Looks like UMG’s deal with Meta was done in the second calendar quarter; Warner quickly followed in early Q3.
Recent Meta announced that it will begin sharing a percentage of ad revenue directly with music rights holders for certain user-generated video assets on Facebook that are 60 seconds or more in length.
Meta’s decision follows years of controversy over how social media platforms like Facebook and TikTok pay publishers and record labels to use their music in videos, and how these platforms protect copyrights. rights of licensed songs.
On July 25, Meta confirmed that it will provide 20% of the ad revenue from eligible videos on Facebook to content creators in the US; the rest will be split between the music rights holder and Meta itself. The program is limited to Facebook only at this time; Meta has yet to announce whether the service will also be available on Instagram.
“This feature is the first of its kind in the music industry. No other platform offers creators this kind of revenue model at this scale,” Meta said when announcing the move.
UMG boss, Sir Lucian Graingeon July 27 described the program as “an exciting opportunity”, adding that it would further boost the income Universal generated from its previous licensing agreement with Facebook/Meta that it had signed in 2017.
Speaking on Tuesday, Warner Music’s Steve Cooper confirmed that the company has also signed a similar deal with Meta.
“We recently signed new deals with Meta that will bring in additional revenue in Q4. Our new deals include an expanded revenue sharing model that will open additional opportunities for both front and catalog artists,” Cooper told analysts on the earnings call. the company’s financial third quarter.
The agreement means for each use of songs by Warner Music-backed artists – including Madonna, Joni Mitchell, Fleetwood Mac, Ed Sheeran, Cardi B, Lizzo, Dua Lipa and Bruno Mars – on For eligible UGC Facebook videos, the music company will earn a share of the revenue from advertising, although Meta did not explicitly detail the percentage of earnings that the music companies are expected to receive.
“Our new deals include an expanded revenue sharing model that will open up additional opportunities for both frontline and catalog artists.”
Steve Cooper, Warner Music
Warner Music CFO Eric Levin said the Meta deal and other business models WMG is exploring in the digital age – including Web3, which combines blockchain and crypto, and NFT – will help the group increase its revenue stream.
inside financial quarter 3 (on a calendar for the second quarter ended June 30), Warner Music Group revenue grew 12.1% year-over-year in constant currency, while net income doubled to 125 million dollars from $61 million in the same period last year. However, the company said that while streaming revenue continued to grow, it was “affected by a market-related decline in ad-supported revenue”.
Still, Cooper told analysts that WMG remains optimistic about streaming and the opportunities that arise on social media.
“Streaming, our biggest source of revenue, has a long way to go and has significant headroom for both subscriber growth and increased subscription fees. We continue to see an explosion of new opportunities in sync, social, gaming, and NFT,” said Cooper.
While Warner Music and Universal are optimistic about the deal with Meta, Kobalt Music Publisher, which owns the rights to about 700,000 songs, recently drag its entire catalog from Facebook and Instagram in the US after failing to reach a licensing agreement with Meta, citing “fundamental differences… that we couldn’t resolve”.
Kobalt’s roster of artists includes Beck, Childish Gambino, Diplo, Father John Misty, Finneas, Foo Fighters, Lorde, Panic! At The Disco, Paul McCartney, Phoebe Bridges, Skrillex, Stevie Nicks, Thirty Seconds to Mars and The Weeknd.
That decision comes amid growing use of copyrighted music on social media platforms – sometimes without the consent of the rights holders.
Based in Sweden Translation audio recently Event Metaseeking $142 million in damages for allegedly using his works on Facebook and Instagram without signing a license agreement.
“Meta has refused to engage in licensing with Epidemic, although Meta has done so with many other rights holders,” the company stated in its lawsuit.
As MBW put in a story two weeks ago, a lot of money is at stake from Kobalt’s decision to remove copyrighted music from Facebook (and Epidemic’s lawsuit): Facebook is estimated to have contributed 29%, equivalent to more than $400 million, of all ’emerging platforms’ ad revenue paid to the music industry recorded in 2021.Worldwide music business
