According to Goldman Sachs’ Music in the Air report, the music streaming market has the potential to grow from $1.4 billion in 2015 to $14.1 billion in 2030. That amount would speak of a third of the whole music industry’s revenues at the end of 2030.
The companies usually under spotlight during music streaming service discussions are Spotify, Apple Music, Pandora and Gaana. But Facebook’s recent deal with ICE services, a music licensing group and copyright database hints that it might also want to join the party.
ICE represents 3 copyright groups and takes care of the copyright of 31 million works of music from 290,000 copyrights holders. Their deal, which covers 160 territories Facebook will have to pay royalties to ICE every time its music it streamed on Facebook, Messenger or Instagram.
For those of you wondering, this is not the first time that Facebook has paid for music rights. In September 2017, they have paid huge sums to prominent record labels and publishers to let the Facebook users include copyrighted songs to their video uploads. Apart from this Facebook has taken multiple steps which show that they are ready to venture into the music streaming industry. Facebook has announced licensing deals with Sony Music, Universal Music Group, Global Music Rights, HFA and Kobalt Music Group. It has also introduced the Facebook Sound Collection feature, which lets users add sound effects/music to their videos.
Currently Facebook is challenging YouTube in the video streaming market with its Facebook Watch feature. Facebook finished last quarter with 2.1 billion monthly active users and as per reports from Morgan Stanley, 40% of its American users watch videos in Facebook every week.
From time to time, Facebook likes to enter new non-core markets. But, entering into music streaming isn’t going to be as easy as it was entering the video streaming. Alphabet’s YouTube Red and Google Play Music are struggling to compete against the incumbents with a meager combined subscriber base of 7 million users.
How will Facebook venture into this industry? Will it integrate the music streaming into the existing app? (which will make it shell out a lot of money in the form of royalties) or will it go for a new streaming platform? (which has tight competition form the existing market leaders) Only time will tell. However, it’s quite hazy as to whether Facebook plans to enter this market or not.
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