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Features March 27, 2017

Facebook’s music strategy raises some major red flags

Lars Brandle
Facebook’s music strategy raises some major red flags

Facebook is going to face the music. Though some mighty big “whats” and “whys” remain.

What we know right now is that Facebook has a music strategy, and it’s gearing up. Though the end-product is as mysterious as its algorithms.  The Silicon Valley tech titan is assembling a team of music industry professionals, led by Tamara Hrivnak, who is charged with “global music strategy and business development” at Facebook.  A lawyer who worked as director of music partnerships for Google Play and YouTube and earlier served as VP of digital strategy & business affairs for Warner/Chappell Music Publishing, Hrivnak came on board in January.

The recruitment process is also underway for a Legal Director of Music Licensing, based at its HQ in Menlo Park, California, MBW reports, and the company is on the hunt to fill three new senior music-focused roles, including a pro with “digital music negotiation experience” and a Label Music Business Development Lead, with duties for “leading Facebook’s strategy and negotiations with music labels throughout the world.”

What’s telling about these job specs is the absence of a call-out for A&R talent. Facebook isn’t building a fourth “major” record company. And why would it? The social media giant has never been in the business of content creation; it’s not about to mess with the formula and launch a rival to Universal, Warner Music and Sony Music.

A streaming music service is clearly on the cards, but why is Facebook going there when the big beasts on the block already include Google Play Music, the affiliated Google-owned video-sharing goliath YouTube, and market-leading streaming service Spotify which boasts more than 50 million paid subscribers. And then there’s Apple Music.

Well, why wouldn’t it? What it does have is an unprecedented user base (Facebook reportedly had 1.86 billion monthly active users as of the fourth quarter of 2016) with instant access to all them, all the time; plus deep pockets, brand awareness and a super-smart team (oh, and those algorithms – it’s been said Facebook knows its users better than they know themselves). This is a company that posted US$27.64 billion in revenue in 2016 and paid $19 billion for WhatsApp two-and-a-half years ago.

Whoever supports Hrivnak in building its music strategy will need a special touch in the art of deal-brokering. Facebook will need to overcome its uneasy relationship with content providers to unlock those tens of millions of tracks already licensed to its rivals’ platforms.

According to a Bloomberg report, Facebook execs have held talks with music publishers and trade associations as it looks to strengthen its ties with the biz. The company has quietly been at work mending those bridges for some months now. With the launch of its Rights Manager admin tool, Facebook announced it was getting tough on “freebooting,” the dodgy practice where some businesses and celebs rip copyright-protected videos, repost them on its platform and grow their brands while robbing the content creators of views.

Video is clearly popular on Facebook. In November 2015, Facebook hit 8 billion average daily video views, double the figure reported just seven months earlier. And a little over a year ago, Zuckerberg told analysts that Facebook users watched an average of 100 million hours of video on the platform every day, though it has struggled to monetize that traffic.

Time will tell if Facebook’s path to music is more than a vanity project in the computer age or a golden opportunity to connect hundreds of millions of people with tunes.

If history is anything to go by, Facebook won’t stick around if its music proposition fails to gain traction, fast. Remember LiveRail? Perhaps not. Facebook bought the video ad exchange for a reported $400 million to $500 million in July 2014 but shut it down two years later when it didn’t pan out as hoped.

This article originally appeared on The Industry Observer, which is now part of The Music Network.


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