WHAT IS META'S NEW MUSIC REVENUE SHARING PROGRAM?

Photo: Brett Jordan

Last week, Epidemic Sound, a company that provides a royalty-free music library for content creators, filed a lawsuit against Facebook and Instagram's parent company contending that it "has actively infringed, as well, as participated in, encouraged and enabled" the unauthorized use of unlicensed music on its platforms, resulting in over $142 million in damages to the Swedish music company due to infringement. Then, Kobalt, the 5th biggest music publishing company in the world, pulled its catalog of more than 700,000 songs from Facebook and Instagram in the U.S. But just 24 hours ago, Meta proudly announced their Music Revenue Sharing Program, a feature 'first of its kind within the music industry’ that will allow creators to use licensed music from specific artists in their Facebook videos and generate profit for content creators, the music rights holders, and, of course, Meta.

But what does it all mean? Is this Meta's answer to YouTube's Content ID? Or is it a response to Epidemic Sound and Kobalt's threats? Well, we first need to understand that each company's issues with Meta come from different angles. Kobalt's licensing deal with Meta expired on July 23rd, and, in an email sent to clients over the weekend, the publisher administrator for names such as Paul McCartney, Burna Boy, FINNEAS, and Childish Gambino, announced that, despite efforts from the company to reach a new agreement for Kobalt's repertoire with Meta, 'fundamental differences remained' that did not benefit songwriters, and, as a result, the publisher's catalog is in process of being removed from the tech companies services in the United States. It is unclear what exactly the problem is, could be the way Meta reports data back to songwriters, or maybe the monetary expectations were not met. This decision by the publisher will cause huge shockwaves through the industry, affecting independent labels and distributors as well as music attached to any of the three major record companies. However, with companies this big, it's only a matter of time until new terms are settled and everything goes back to normal, especially as Meta continues to compete with TikTok and YouTube. Or so I hope because otherwise, this move by Kobalt could be detrimental to songwriters and a huge loss of money for its clients. Or, maybe, just maybe, other publishers will follow and the music business' message to Meta will be louder and clearer.

The new feature by Meta could be an indirect response to Epidemic Sound's lawsuit. Epidemic Sound, with its value estimated to be $1.2 billion, offers more than 35,000 music soundtracks to its subscribers for as little as 9 euros per month, which allows creators to use Epidemic's music and monetize any content created with it on YouTube, Facebook, Instagram, and Twitch. They have blatantly accused Meta of knowingly committing copyright infringement by “offering Epidemic’s works through its ‘music library’ for any users to use, including to download, stream, or incorporate into video content, for free, without license or other authorization.” In other words, Epidemic inculpates Meta for using Epidemic's music library as their own without a license that allows them to do so. That’s a pretty big deal.

At the time of writing, Meta has not issued any statement regarding either Kobalt or Epidemic Sound. Instead, it launched a feature that will allow video creators on Facebook that use licensed tracks from the Facebook song library for their publications with ads to generate - and split - revenue: “Video creators will receive 20% revenue share on eligible videos, with a separate share going to music rights holders and to Meta.” However, to do this, the video content must meet specific criteria and satisfy Facebook’s monetization policies. Unlicensed videos will be muted or taken down from the site. And how does this affect Epidemic Sound? Well, they provide royalty-free, generic background music. Facebook’s licensed song library includes popular artists like Post Malone, Tove Lo, Grupo La Cumbia, and a couple more. If I understand correctly, Facebook will pay you and Post Malone to create content using Posty’s music. To be honest, I don't think this will be received as warmly as Facebook hopes, but I do have to say that it's a good sign that they've finally started doing something about their royalty payout model, because it was a long-time coming. This change in Meta's payment methods comes after the music business started calling out TikTok, Meta, and other platforms for exclusively 'paying publishers and record labels via lump-sum licensing advances (or so-called 'buy-out' deals) – rather than sharing an agreed proportion of revenue for every monetized play/use of music on their platforms'.

We will have to wait a couple of weeks to see how the lawsuit against Meta’s copyright infringement evolves and if Kobalt’s decision was ultimately the most beneficial for songwriters. Whenever the news break, you know you will get the breakdown here, on Click Track.

Until next time!

Musically,

Nicole for Click Track