Facebook and Universal Music strike huge agreement

Nettie James
December 22, 2017

With this deal, the companies hope to "advance the interests of recording artists and songwriters while enhancing the social experience of music for their fans", says Michael Nash, UMG's Executive Vice President of Digital Strategy, in a statement.

Facebook (NASDAQ:FB) and Universal Music Group (OTCPK:VIVHY) have signed a license agreement to bring the former's music to the social networking site and its properties. The new deal, however, will allow users to post videos and 'facilitate deeper engagement between artists and fans, empowering users to express themselves through music, share the songs they love and build communities around music-fuelled culture, ' according to Facebook.

Facebook said users will eventually have access to a vast library from Universal, allowing them to upload licensed music or share it through Messenger. Users can easily opt to watch music videos on YouTube for free, potentially making it more hard to convert some of its users into paying Remix subscribers.

"This partnership is an important first step demonstrating that innovation and fair compensation for music creators are mutually reinforcing - they thrive together". Financial terms weren't disclosed. In the pipeline, it also paves the way for a potential Facebook Music service, which could rival Spotify and Apple Music for on-demand streaming playback. There is also speculation that this could bolster Facebook's attempts to get further into the video market with high-end video content.

Many industry insiders believe that Facebook's brand new venture with Universal Music Group may present a challenge for one of its biggest competitors.

The deal comes just two days after Universal signed a a similar partnership with YouTube.

Neither Facebook nor UMG are saying how much today's deal is worth, only describing it as a "global, multi-year agreement".

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