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Music publishing and Meta’s revenue sharing
September 19, 2022

Music publishing and Meta’s revenue sharing

It’s no secret that music publishing has been in high demand for a long time when it comes to social media platforms. Monetizing music has been one key element of all strategies for the music industry.

Recently, Facebook (Meta, for the parent group) has been taking new measures with a revenue sharing program. This has been a response after Kobalt not renewing their deal with the platform or Epidemic Sound filing a complaint for copyright infringement. So what is that program and what does it imply for the future of music publishing and user-generated content?

The ever-growing demand for music publishing

As has been seen with the advent of wildly popular platforms and tools like TikTok and Instagram's Reels, the creation and consumption of user-generated content (UGC), especially video, is on the rise. This trend is not only being followed by creative individuals, but also by brands and businesses who are using UGC as a way to engage with their target audiences.

Increasing the volume of content on these platforms means a lot more demand for tracks to add to them. After all, what's a video without an awesome soundtrack to go along with it? While some platforms provide users with access to royalty-free music, the reality is that the quality and selection of these tracks can be quite limited. And of course, users would rather use Harry Styles’ “As it was” on their new content to fit the trends and go up in the platforms’ algorithms. This has led to a growing demand for licensed music, which surely offers a much wider range of options to choose from but also raises the point of how to monetize music in this case.

Platforms like Meta and TikTok have made it easy for anyone to find and use licensed music in their videos. Through back end deals with music publishing companies, these platforms provide their users with millions of tracks to choose from, all of which are cleared for use. But while the ability to use popular tunes in online content without fear of legal implications has been great for creators, the reality is that the system behind it isn't without its flaws.

How did we monetize music so far?

Up until now, the way that social networks like Facebook (Meta’s platforms really) have paid publishers for the use of their music in UGC has been via a lump-sum system. This means that music publishing companies and platforms have been working out deals in advance, where rights-holders are paid a set amount of money for usage of their content over a fixed time period. Right, is everybody still with us?

Here’s the problem though. Industry leaders have long seen this dynamic as unfair, citing that the size of compensation received in these arrangements are often disproportionately unfair in relation to usage rates. They've called on platforms like Meta to institute a consumption-based pay model, which is exactly what they're doing with the rollout of this new revenue share program.

How the Meta Revenue Share Program works

Facebook (Meta) revenue share program is set to be the first of its kind among major social media networks. It will be happening only on Facebook for now.

It applies to content creators on its proprietary platform, Facebook, who make videos that are 60 seconds in length or longer and pays rights-holders for every creation featuring their licensed music. Advertising revenue generated from any of this content is then split between the parties involved - 20% for creators and 80% between Facebook (Meta) and music publishing companies.

What's particularly interesting about this arrangement is the new way towards how to monetize music. Creators would be able to receive a piece of the profit made from the music in their content. It opens up a new door to those who make content online, essentially incentivizing them to use licensed music in their videos while also fairly compensating publishers and songwriters for their work.

A new precedent for music publishing?

Meta's revenue sharing program launched in late July, rolling out to users around the world. It's been made possible by the company's new Rights Manager tool, which it uses to identify and track the use of copyrighted content across its platform.

This tool has been in development for some time, but it's only now that it's become sophisticated enough to be used on a large scale. And while other social media networks have been using similar technologies to detect and remove infringing content, Meta is the first to use it for the purpose of compensating rights-holders who are looking to monetize music.

This move by Meta is a big deal, not just because it's the first consumption-based pay model for user-generated content on a major social media platform, but also because it could set a precedent for other networks to follow suit.

As the world's largest social media company, Meta has a lot of influence. And if this revenue share program is successful, it's very possible that other platforms will begin to introduce similar initiatives in order to keep up with the competition created by it.

This would be a game-changer for the music industry, especially music publishing, which has long been struggling to find ways to fairly monetize music while also keeping up with consumer demand. If other social media platforms were to adopt similar revenue share models, it would mean a much more sustainable future for the industry as a whole. And as the program continues to roll out and more content creators begin to take advantage of it, we can only hope that other networks will follow suit and introduce similar initiatives of their own.

How Reprtoir can help

And as music industry professionals, we know how difficult it is to keep track of all streams of revenue, especially when all platforms are setting up their own way of doing, their splits etc. Well, we can help you through your process to monetize music.

Reprtoir is a software suite for record labels and music publishing companies. One of our features is focused on the Royalty Accounting side of your business, that you can manage with a dedicated software in a workspace. Ingest thousands of statements, the software will take out the errors for you to take a look at and will keep track of your business operations so you’ll never miss a thing. Optimized and secured, discover Reprtoir today with your personalized free demo with us!

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