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Kobalt pulls songs from Meta platforms in US after failing to agree new licensing deal

By | Published on Monday 25 July 2022


Kobalt is pulling its songs repertoire from the Meta services in the US after it failed to agree terms for a new licensing deal with the social media giant, the music publisher informed its writers and clients in a memo this weekend.

That memo reads: “We’re writing this morning to let you know that as of last night at midnight PDT, Kobalt’s licence with Meta expired in the United States”.

“Over the course of several months”, it goes on, “we’ve worked diligently and in good faith to come to an agreement covering a new licence for Kobalt’s repertoire”.

“Unfortunately”, it adds, “fundamental differences remained that we were not able to resolve in your best interests, and as a result Kobalt’s repertoire is in the process of being removed from Meta’s services, including Facebook and Instagram, in the United States”.

“We’ve always stood for songwriters first”, the memo concludes, “and we’re proud to continue to do so. We remain fully committed to reaching an agreement with Meta”.

Although premium streaming remains by far the biggest digital revenue stream for the music industry, the royalties paid by ad-funded streaming services have seen significant growth in recent years too, and a big part of that growth has come from the deals done with social media platforms.

The music industry’s licensing deals with the likes of Meta and TikTok work differently than those negotiated with Spotify and Apple Music, and often involve each social media platform paying each licensing partner a set upfront fee to cover a set period of time, rather than having a month-to-month revenue share arrangement.

That’s partly because when these platforms do their initial deals to cover user-uploaded videos that contain music, they are often still working out their own business models in relation to that content. Plus, any revenue share arrangements would need to be more complex than with Spotify et al, as music is part of rather than the entirety of the service.

With something like YouTube, you can have a set up whereby a music company claims the creator’s share of any income from ads directly linked to a video containing its music.

Though where the creator of the actual video is also looking to monetise their content, that means they will probably stop using commercially released music, meaning the music industry doesn’t benefit at all from the output of the biggest creators. Which is what happened with YouTube, creating a massive opportunity for savvy production music libraries.

And once you have feed-centric social media platforms – where content is pushed to users, rather than them selecting specific content, and where advertising isn’t always directly connected to any one video – things get all the more complicated.

And then, of course, there’s also the issue of identifying what music any one uploader has used. Audio recognition technology helps, but that is generally much better for identifying recordings than songs. Throw in user-upload services and social media companies exploiting the pesky copyright safe harbour to reduce their liabilities for unlicensed music on their platforms, and simpler lump-sum licensing deals do seem more attractive.

That said, in more recent years, most social media platforms have started adding audio-clip libraries to make it easier for users to integrate music in their videos, which removes any claims of safe harbour protection, makes its easier to track what music is being used, and – arguably – makes music a much more crucial part of the proposition. All of which might make music companies want a different kind of licensing deal – or at least more money.

Of course, we don’t know if any of this has factored into Kobalt’s unsuccessful talks regarding its new licensing deal with Meta. But we do know that Kobalt’s memo this weekend quickly followed Epidemic Sound’s new copyright infringement lawsuit against the social media giant.

And that possibly means that Meta – which, after it finally got round to licensing music in 2017 and 2018, managed to shut up most of its critics in the music industry with some sufficiently large advance cheques – might be in for some highly public dissing from some parts of the music community in the months ahead.