The hiring of Tamara Hrivnak by Facebook as its global head of music strategy has left many in the business feeling upbeat.
The respected licensing expert brings a weight of expertise from Warner Music Group and Google to the social media giant, which to date has hardly been a paragon of virtue when it comes to paying for music copyright.
Yesterday, in an earnings call with investors, Mark Zuckerberg gave the music business yet more reason for optimism.
The Facebook founder once again confirmed his company’s increasing focus on video – while making specific reference to ‘premium content’.
Much of this centered on the launch of a video ‘tab’, which will be dedicated to serving video to users in an environment which sounds very much like YouTube.
“creators need to get paid a good amount in order to support the creation of premium content.”
Although Zuckerberg didn’t specifically mention music (literally, didn’t even say the word once), he hinted that Facebook could soon be ready to start sharing its advertising revenues with rights-holders of all kind.
“We want people to think of Facebook as a place for interesting and relevant video content from professional creators as well as their friends,” he said.
He later added: “We’re focusing more on shorter-form content to start… There is the type of content that people will produce socially for friends. There’s promotional content that businesses and celebrities and folks will produce.
“But there’s also a whole class of premium content. The creators need to get paid a good amount in order to support the creation of that content, and we need to be able to support that with a business model, which we’re working on through ads to fund that.
“So the biggest change that I think that we’re going to see on the consumption in News Feed and in the tab over the next year or two is going to be much more video inventory and content coming in as we work through and make that business model start to really click for a lot of folks.”
Short-form premium content which Facebook is willing to pay for?
Words to get the labels licking their lips – especially because Facebook has confirmed that its monthly active user count rose yet again in the three months to end of December, up to 1.86 billion.
Facebook CFO David Wehner brought yet more reason for cheer, confirming that alongside R&D, sales and marketing, Facebook expected to “increase investments” in content in the medium and long-term.
One snag: Zuckerberg and Wehner were then asked by Brian Nowak of Morgan Stanley whether Facebook’s content investment would be “more driven on revenue share – or do you see yourselves going out and writing and doing licensing deals?”.
Wehner replied: “Our goal really is to kick-start an ecosystem of partner content in the video tab… and our model is really oriented towards revenue share with creators. We are funding some feed content to get the ecosystem going, but the focus is on rev share.”
“Our goal really is to kick-start an ecosystem of partner content in the video tab… and our model is really oriented towards revenue share with creators.”
David Wehner, Facebook
You wonder if ‘creators’ here also includes the rights-owners behind music copyrights. And if so, what kind of revenue share they can expect.
Zuckerberg gave more color on the prospect of Facebook’s video ‘tab’, and how it would differ from the social network’s traditional offering.
“For the video tab, the goal that we have for the product experience is to make it so that when people want to watch videos or they want to keep up to date on what’s going on with their favorite show or what’s going on with the public figure that they want to follow, that they can come to Facebook and go to a place knowing that that’s going to show them all the content that they’re interested in,” he said.
Zuckerberg added: “Today, for the most part, people pull Facebook out when they have a few minutes, when they want to catch up and see what’s going on in the world with their friends and in the news and everything that’s going on. That’s very different from saying, hey, I want to watch video content now. And that’s what I think we’re going to unlock with this tab.”
Zuckerberg showed a particular fondness for episodic content which users would watch “week-over-week”.
“I do think that it’s going to get a lot stronger once the business model really starts to click here,” he said. “Because a lot of the best episodic content is professionally created, and those folks need to make a good amount of money in order to support their business model.
“So having mid-roll ads, we’re committed to doing this in a way that’s very good on the user experience, but that is going to [fund] the kind of content that I think is going to take us to the next level.”
“a lot of the best episodic content is professionally created, and those folks need to make a good amount of money in order to support their business model.”
Mark Zuckerberg, Facebook
Wehner was also asked the inevitable question of Facebook potentially acquiring content in the future.
“Our focus is on kick-starting the ecosystem here for the video tab,” he replied. “We’re looking at a wide range of content, and we’re really working towards a revenue share model with creators.
“We’re certainly going to be seeding content to get the ecosystem going, but that’s not about doing big deals. We’re looking at a variety of different types of content.”Music Business Worldwide