Is Facebook planning to enter the streaming music market?
Goldman Sachs Music in the Air report highlights that music is going the way of other entertainment forms: online. Streaming music services could account for $14.1 billion by 2030 – up from $1.4 billion in 2015. By that point, just twelve years away, streaming revenue will account for a full third of the entire music industry’s value. That’s an impressive pie – is Facebook going to want a part of it?
Facebook’s share price is up by 35% over the last 12 months
SOURCE: Yahoo Finance
Facebook might not be an obvious choice for the next streaming music market leader. Spotify, Apple Music, Pandora Media…. these are the recognizable names in the field. But why shouldn’t Facebook compete with them? It’s amongst the world’s biggest and most innovative tech companies, after all. What’s more, it is a tried and tested media juggernaut: it’s looking to challenge YouTube as a video on demand service, and is one of the world’s most important publishers. Perhaps best of all, the company has more than 2 billion dedicated users.
Facebook has already got some experience with the music industry. It apparently paid “hundreds of millions” of dollars to record labels last September so that users could add copyrighted songs to the videos they uploaded. It’s continued to make similar features available through licensing deals with Universal Music Group, Sony / ATV Music, Global Music Rights, HFA / Rumblefish, and Kobalt Music Group.
With this conflagration of factors taken into account, and thinking about the company’s success with streaming video (according to Morgan Stanley, 40% of Facebook’s U.S. users already watch videos on Facebook weekly), is a move into streaming music on the cards?
Dominion holds Facebook in its Global Trends Ecommerce Fund.
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