Facebook is reportedly looking to get in to the music business, but it’s not gunning for Spotify.
The New York Times reports that rather than joining the crowded streaming landscape, Facebook has its sights set on music videos, a territory dominated for years by YouTube. The social-networking giant has held licensing talks in recent weeks with major recording labels to insert music videos directly into users’ feeds, the newspaper reports, citing anonymous sources described as being briefed on the talks.
Facebook is proposing revenue-sharing deals that would be more lucrative than YouTube’s and has also promised to do a better job of preventing unauthorized videos from appearing on the site, sources told the Times.
The talks, first reported by The Information in June, are described as still being in the early stage but suggest that Facebook is looking to ramp up its competition with YouTube, the Web’s de facto home for video. With 1.4 billion monthly users, Facebook would appear to be the best platform to mount an assault on YouTube, which claims more than 1 billion monthly users.
The report differs from an earlier story by music business news site Music Ally that held that Facebook was planning to develop a music-streaming service that would compete directly with Spotify, Rdio and newcomer Apple Music. But Facebook denied the report, telling various news outlets that it had “no plans to go into music streaming.”
Following on Facebook’s success with Instagram and WhatsApp, the talks with record labels would be the latest effort by the company to expand beyond its core social network into a one-stop destination for sharing and consuming content such as photos and videos.
The social network has made its video ambitions quite clear.
“Video is a big opportunity for us,” Facebook COO Sheryl Sandberg said during an April earnings call with analysts.
During the same call, Facebook CEO Mark Zuckerberg proudly declared that Facebook was serving up 4 billion video views daily, an increase of about 30 percent since January, when 3 billion videos were viewed daily on the site. More than 75 percent of those views were by people using mobile devices.
The trend has drawn in advertisers as large as movie makers, fast food chains and consumer electronics chains to small-and-medium sized businesses, 1 million of which Facebook said have created videos and bought ads on the service.
That interest seems to be paying off for Facebook. Of Facebook’s $3.32 billion in revenue derived from advertising for its first quarter, ended March 31, the company said that 73 percent came from ads shown on mobile devices. That figure was 59 percent a year ago.