Facebook today took its latest step towards making good on paying out royalties to music rightsholders around tracks that are used across its multiple platforms and networks. The company has signed a deal with ICE Services — a licensing group and copyright database of some 31 million works that represents PRS in the UK, STIM in Sweden and GEMA in Germany — to provide music licensing and royalty collection for works and artists represented by the group, when their music is used on Facebook, Instagram, Oculus and Messenger.
WhatsApp is not included because “We understand that WhatsApp is currently used as a pure communication tool akin to private email / messaging,” a spokesperson for ICE told TechCrunch. “This will be kept under review.”
The deal is significant because, as ICE describes it, it’s the first multi-territorial license Facebook has signed with an online licensing hub: it will cover 160 territories and 290,000 rightsholders.
So what will this be used for? Facebook has moved into a lot of different services over the years, but a streaming music operation to compete with the likes of (soon-to-be public) Spotify, Pandora and Apple Music has not been one of them.
However, in recent times it has been laying the groundwork to do more in music. And specifically, it has been signing deals with record labels and others to make sure that the music that is used in videos and other items posted to its sites is legit and paid for to avoid lawsuits, takedown requests, and — yes — potentially the creation of new music-based services down the road, as it starts to tap into the opportunities that music affords it.
These days, music is particularly an interesting turn for Facebook. The social network has run into a lot of controversy for its prominent role in aggregating and distributing news to the world — with a significant part of that news turning out to be misleading and potentially damaging to public opinions and larger issues like the democratic process. Facebook, in turn, is looking for new and alternative content to continue driving people to its platform, and music could help it strike the right note, so to speak.
There are no financial terms being announced today by ICE and Facebook — we’ve asked Facebook, and an ICE spokesperson tells us that “ICE is one of a number of licensors of publishing rights and therefore the commercial terms associated with the deal must remain confidential. There is a robust and detailed governance process which operates to assess the detail of major ICE licence deals and includes representation from writers and publishers of ICE’s customers.”
For some context, a report in September alleged that the social network is cutting deals in the hundreds of millions of dollars to set its licensing and royalty agreements right.
Other deals that Facebook has cut in the past several months have included an agreement with Universal Music Group over user-generated videos; another with Sony/ATV; and a third with Kobalt, HFA/Rumblefish and Global Music Rights. Facebook also has also pursued a secondary route of giving creators access to “no-name” music via a new service it’s launched called Sound Collection. ICE represents a number of artists and labels who would fall outside of those agreements either because of territorial coverage and/or label and licensing ties.
The deal will not only cover videos and the like that are uploaded by its 2.1 billion registered users (1.4 billion daily users) to Facebook, Instagram, Oculus and Messenger, but will also be added in a catalogue that people can tap into when they are creating and adding them to those platforms from scratch.
Sound Collection isn’t cited by name in the press release from ICE, and Facebook’s spokespeople have so far declined to comment on this aspect, or any specific application of how it will use the fruits of this deal (we are still trying to get more anyway). In any case, Sound Collection was created for access to music that Facebook owns the rights to outright.
But from the description in the ICE press release — “Facebook users will be able to add music from a catalogue containing millions of works to videos they create and share with their audiences,” notes the release — it sounds like ICE will at least be used for video creation.
“We are delighted to continue deepening our relationship with music by partnering with ICE in a first-of-its-kind licensing deal,” said Anjali Southward, Head of International Music Publishing Business Development at Facebook, in a statement. “Facebook’s journey with music is just beginning and we look forward to working with ICE and songwriters to build a community together around music.”
ICE says that it will provide will be working with Facebook to build a royalties reporting system as part of the deal. The company already has similar arrangements in place with 40 other streaming platforms and has distributed 300 million euros in royalties to its members since it was established in 2016. (Why only 2016? Previously the three organizations worked independently and saw they could get much better bargaining power if they worked collectively).
Indeed, royalty collecting is a potentially lucrative business as streaming services continue to grow and overtake other formats for music consumption, with startups like Kobalt building services that it claims are better and faster at tracking even the smallest samples to make sure that those who are making their music are getting their due.
“We are excited to work with Facebook to ensure we are delivering value back to creators for the use of their works on Facebook platforms. The future of music depends on our industries working together to enable the development of new models for music consumption in the digital age, to ensure a healthy future for songwriters and composers.” said Ben McEwen, Commercial Director at ICE Services, in a statement.
Updated with further comment from ICE and Facebook.