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Universal Music Leads Royalty Deadbeat Facebook Out Of Cold with Licensing Deal [Chris Castle]

1Long known as something of a deadbeat when it comes to paying music royalties, last week social media giant Facebook signed a deal with Universal Music Group which will allows the social network to carry songs from the major label across its platforms.

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Op-ed by Chris Castle of Music Tech Policy

This is what happens when you stick to your property rights – Bloomberg reports that Facebook, aka royalty deadbeat, has signed a multiyear licensing deal with Universal Music Group:

Facebook Inc. signed a multiyear licensing deal that lets the social network carry songs and artists from the world’s biggest record label, Universal Music Group, across its platforms.

The deal announced Thursday solves a long-running dispute, with Facebook agreeing to compensate the company and artists including Taylor Swift when users post videos that include copyrighted material. The accord includes Facebook, Instagram and Oculus virtual-reality technology, with Universal saying the company would become a “significant contributor” to the industry.

The deal sets Facebook up as a more direct competitor to Google’s YouTube, the most popular destination online for listening to music. Both technology giants are battling for a bigger share of people’s time, and music rights could help Facebook give users new ways to engage with its services.

2The deal appears to cover UGC and no doubt includes both a settlement for the past (“solves a long-running dispute”) as well as a go forward license.  There may well be more settlements and licenses in the offing, but one fact is crystal clear–Universal was the only one of the rights owners that had the guts to stand up to Facebook by bearing down on sending the DMCA notices that allows Facebook to hoist their users as human shields from infringement claims.

As many have noted, Universal’s enforcement team did the thankless yeoman’s work that helped to remind Facebook that not only are there enforcable property rights online and offline, but Facebook would actually do much better for its stockholders and users by cooperating with artists, songwriters, labels and publishers.  It’s possible that Facebook is coming in from the cold and putting aside all that Lessig claptrap that is soooo 1999.   Claptrap that has only resulted in losses as far as the eye can see, not to mention endless hostility and gasoline known as Lyor Fully Leaded.

Credit where it’s due, it must be said that unlike Google or Spotify, Facebook has–so far–avoided the scorched earth litigation that is the hallmark of Silicon Valley’s relationship with artists and songwriters.  That decision had nothing to do with the negotiation team and everything to do with a corporate policy.  So we will see if Facebook is for real.

It also must be said that the Universal deal shows the importance and power of statutory damages.  The only leverage that anyone has against massive infringing by [multinational] technology companies is the power of statutory damages and attorneys fees provided in the U.S. Copyright Act.  Not everyone has Universal’s heft–class actions based on statutory damages is about the only route that many artists, songwriters, labels and publishers have against systematic and intentional knowing infringers like Facebook.

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