Facebook Strikes a Major Licensing Deal with APRA AMCOS

Facebook scores yet another major licensing deal.

Australian performance and mechanical rights society APRA AMCOS has signed a major licensing agreement with Facebook.

Under terms of the agreement, Facebook has licensed millions of songs from APRA AMCOS’ 95,000 songwriter and publisher members.  This includes Australian, New Zealand, and international songwriters, composers, and publishers.  The deal covers use of their works on Facebook, Oculus, Instagram, and Messenger.

In a statement, APRA AMCOS CEO Dean Ormston praised the deal.

“We are delighted to be working with Facebook to ensure the creative content of our members and affiliates that is used on the platform is fairly remunerated.”

He added music rights holders “will be compensated for the use of their works on Facebook.”

The deal follows long-term licensing agreements signed with the major labels – Sony Music, Universal Music Group, and Warner Music.  Facebook has also signed a deal with Merlin, which represents over 20,000 indie record labels and distributors.

But what does this deal mean for the future of Facebook?

Multiple controversies in the past few years have shaken Facebook to the core.

During its Q2 2018 earnings call, company executives revealed the social media platform had its slowest growth ever.  The European Union’s GDPR privacy implementation, along with Mark Zuckerberg’s testimony over the Cambridge Analytica scandal, took an active toll on the company.

The social media platform still reached an impressive 2.23 billion users, but grew only 1.5% over the previous quarter.  The company also missed revenue expectations.  And, Facebook’s monthly active users (MAUs) – a key metric for advertisers – flatlined at 241 million in the US and Canada.

In Europe, the platform lost a million users, down to 376 million in Q2 2018.

Investors swiftly punished the social media platform in after-hours trading.  The company lost $120 billion.

In addition, a study published in June revealed that the social media platform has been shedding a core audience – teens.  The Pew Research Center found just 51% of US teens aged 13 to 17 use Facebook, down 20% from a previous study three years ago.  More teens now use YouTube (85%) and Snapchat (69%) over Facebook.

Then, online market research firm SimilarWeb revealed YouTube could overtake Facebook as the second-largest website in the United States.  In two years, monthly visits to Facebook have fallen from 8.5 billion to 4.7 billion.  On the other hand, thanks to ‘growing openness among consumers’ to online video, YouTube has grown to 4.5 billion.  Google, of course, remains in first place with 15.2 billion monthly visits.

So, can Facebook get its groove back?

Despite the bad press, the social media platform continues to grow.  During its Q2 2018 call, the company revealed 2.5 billion people – a third of the world’s population – use one of its products a month.

And while fewer US teens use the popular social media platform, Pew found 72% use Instagram.  According to SimilarWeb, more people have started using Facebook’s network of apps – WhatsApp, Instagram, Messenger, and Facebook Mobile.

The company has also launched new platforms and features to take on the competition.

With IGTV, Facebook hopes to erode YouTube’s dominance in the video space.  The strategy appears to have worked.  Clearly frightened YouTube executives have signed 7-figure checks to top content creators to post content first on YouTube, according to industry rumors.

Plus, to tackle the emerging dominance of Snapchat and Musical.ly (now TikTok), Instagram has recently revealed a new Music Stickers feature.  Users can now add select songs to photos and videos on the social media platform.

So, Facebook’s deal with APRA AMCOS makes perfect sense.  In fact, as Ormston explains,

“Whether it’s live music or digital, the sustainability of Australian and New Zealand music relies on our industry working in partnership with platforms like Facebook to support new developments in music consumption, ensure the public has access to great music and that music creators have a sustainable industry that supports their careers.”

In addition, APRA AMCOS will work with the popular social media platform to further develop its rights reporting system.

Speaking with The Music Network, Richard Mallett, Head of Revenue at APRA AMCOS, confirmed songwriters can expect the first payment “shortly.”