October 12, 2017 monokrome

Goliath vs Goliath: Facebook taking on YouTube

It’s a strange time to be a human being right now. We’re living on a planet that we’ve already damaged irreparably, that could either be torn apart by historic hurricanes or blown to blighty by maniacal men with hilarious hair. I am hoping that this won’t happen. Like most men, I’m increasingly scared of going bald but want to live long enough to find out if I do. If we’re lucky and the humanity does survive the current onslaught of idiocy, the question is what happens next? With corporate entities like Amazon, Google, Apple and Facebook all vying for digital domination, who will emerge, like a glistening scalp, as the true titan of the age?

Recently it’s been Facebook making the most obvious efforts. With their clear dominance of the social media and messaging markets, Facebook is now turning its head towards the cool business – the music business. Reputedly, the social media giant has been offering music rights-holders hundreds of millions of dollars to allow their more than 2 billion users to start using music in their videos without infringing copyright. While any solid details are hard to come by, allegedly Facebook is aiming to have a blanket music licensing deal in place for the launch of its new video hub, ‘Watch’.

Considering this is the same company that recently posted 3 new music licensing job positions on its site, it’s clear that Facebook is making music a central part of its bid to compete as a major video platform. They even sent their VP EMEA, Nicola Mendelsohn, to the annual general meeting of the BPI. There, Mendelsohn highlighted the opportunities that Facebook gives artists to reach their audience and made the bold statement that they “understand and respect the value of all artists“. Facebook’s acquisition of copyright identification platform Source3 in July implies that they intend to take music copyright seriously.

There are some who think that these recent rumblings at Facebook are also part of an effort to supersede Spotify. If they are able to secure large licensing deals, what’s to stop them integrating their own streaming service into Facebook’s platform? The distinction at the moment is that Facebook is entirely free where as access to Spotify’s ad-free, offline-compatible service requires a monthly subscription. However, a look at the numbers shows Facebook has potential here. Facebook has over 2 billion active users to Spotify’s 140 million. Over a third of Spotify users are now paying subscribers. If Facebook was able to match that conversion rate, they’d have over 600 million paying subscribers – something the music industry would no doubt embrace with open arms.

Spotify may not be in immediate danger though. A recent article in Variety claims that Facebook is limbering up to enter the original content arena, competing with the likes of Apple, Amazon and YouTube. They have also been bidding on sports programming deals which can bring in huge revenues. Whilst Spotify has managed to increase revenues for rights-holders and established itself as the clear front-runner in streaming, it is still yet to turn a profit. This means streaming is still a risky area for Facebook to try and dominate.

Video hosting, on the other hand, is already a very lucrative market and Facebook is one of the few companies with the resources and know-how to present a legitimate challenge to YouTube. The music business, in general, is no fan of YouTube as they refuse to get around the table and have a serious discussion about the “value gap” – what they pay verses what they make – which makes this the opportune moment for Facebook to align itself with the industry by promising to be a better partner than their Google-owned competitors.

This could be a good thing for the music industry. If Facebook paid more to rights-holders than YouTube then a seismic user-base shift from the former to the latter could be a positive. But, ultimately both platforms are beholden to shareholders. It may be naive to believe that Facebook’s genuine intention is to give the music industry a better deal long-term. Music may simply serve as the weapon Facebook uses to strike YouTube in the windpipe, to be cast aside when the fight is won.

What we have here is a digital story of Goliath vs Goliath. What we need is a David. Perhaps instead of relying on one corporation to offer a slightly better deal than another, the music industry needs to present its own alternative. One where the aim isn’t digital domination but copyright conservation. That way, artists, writers and rights-holders can stop cowering in the shadows of Goliaths and take control of their own digital destiny.


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