UMG said in a press release on Monday (August 12) that the new deal will “further evolve the creative and commercial opportunities” for UMG artists and Universal Music Publishing Group songwriters across Meta’s global network of platforms, including Facebook, Instagram, Messenger, Horizon, Threads and, for the first time, WhatsApp.
The inclusion of Meta’s instant messaging service, WhatsApp, means that its users can now share licensed music from UMG within the app.
UMG said on Monday that its partnership with Meta to license music for WhatsApp unlocks “new value for UMG artists and songwriters in the future”.
Plus, as part of their new partnership, Meta and UMG said that they will work together “to address, among other things, unauthorized AI-generated content that could affect artists and songwriters”.
Today’s announcement comes two weeks after UMG specifically referenced Meta in the music company’s calendar Q2 earnings results (covering the three months to the end of June).
Within those quarterly results, which saw UMG’s overall revenues up 9.6% YoY, UMG announced that its ad-funded streaming revenues had declined slightly, down 3.9% YoY.
Part of the reason for that decline, explained UMG’s CFO, Boyd Muir, was that Meta stopped licensing premium videos for Facebook from UMG in May. That decision from Meta, he said, was due to these high-end music videos proving “less popular with Facebook’s user base than other music products”.
Muir added on UMG’s Q2 earnings call in July: “Meta is now focusing instead on other areas involving music content, and we are working together to expand these areas as part of a multifaceted renewal.”
That “multifaceted renewal” is now signed and sealed, with UMG and Facebook jointly stating today in a media release: “The new agreement expands monetization opportunities for UMG, and its artists and songwriters, even further with short form video, building on Meta and UMG’s joint track record of innovation and collaboration.”
To sum that up: UMG has lost some potential revenue from Meta due to the latter company’s decision to stop licensing premium videos on Facebook… but the fresh agreement announced today appears to have created new revenue opportunities for Universal in the short-form video space (and, very possibly, from the additional licensing of UMG’s catalog to Whatsapp).
(Sidenote: UMG rival Warner Music Group last week estimated that, in its current deal with Meta, the removal of licensed premium music videos from Facebook will have a $10 million-per-quarternegative impact on WMG’s revenues going forward.)
According to Monday’s announcement, UMG’s new agreement with Meta builds upon the “strategic framework” established with 2017’s “landmark agreement” with the company then known as Facebook.
Under the 2017 agreement, UMG became the first major music company to license its recorded music and music publishing catalogs across Facebook’s platforms. UMG said on Monday that Facebook “took a pioneering role as music’s first fully licensed partner among the major social media platforms”.
Meta and Universal previously signed a deal two years ago in 2022.
UMG Chairman & CEO Sir Lucian Graingeconfirmed on UMG’s Q2 2022 earnings call that his company had inked a licensing agreement with Meta that “expands revenue sharing and enhances [the] Meta community’s engagement with our catalog”.
That agreement included the use of UMG’s music within Meta’s UGC video payout model for the music business. Meta announced in July 2022 that it would start directly sharing a proportion of advertising revenue with music rightsholders for certain user-generated video content on Facebook that is 60 seconds or longer.
“We are thrilled to announce our renewal with Universal Music Group, and Universal Music Publishing Group, both of whom are innovators for music on social media, especially with regard to Meta’s family of apps.”
Tamara Hrivnak, Meta
Tamara Hrivnak, VP Music and Content Business Development at Meta, added: “We are thrilled to announce our renewal with Universal Music Group, and Universal Music Publishing Group, both of whom are innovators for music on social media, especially with regard to Meta’s family of apps.
“This partnership builds on the recognition that music can help connect us and bring fans, artists, and songwriters closer together, not only on established platforms such as Instagram and Facebook, but also in new ways on WhatsApp, and more.
“We’re extremely grateful to the Universal team, and look forward to growing our partnership in the future.”
“We are delighted that Meta shares our artist-centric vision for respecting human creativity and compensating artists and songwriters fairly.”
Michael Nash, Chief Digital Officer & EVP, Universal Music Group, said: “Since our landmark 2017 agreement, Meta has consistently demonstrated its commitment to artists and songwriters by helping to amplify the importance music holds across its global network of engaged communities and platforms, creating new opportunities and applications where music amplifies and leads engagement and conversations.
“We are delighted that Meta shares our artist-centric vision for respecting human creativity and compensating artists and songwriters fairly.
“We look forward to continuing to work together to address unauthorized AI-generated content that could affect artists and songwriters, so that UMG can continue to protect their rights both now and in the future.”
In recent months, Universal and Meta have collaborated on campaigns across Meta’s platforms for UMG-affiliated artists, including Billie Eilish, Karol G, Taylor Swift, and others.Music Business Worldwide
