Facebook challenges music streaming giants with Universal Music deal

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"We look forward to Facebook becoming a significant contributor to a healthy ecosystem' for music that will benefit artists, fans and all those who invest in bringing great music to the world". Based on the partnership announced between the music group and YouTube, it sounds as though this agreement is a method to curb financial losses and the new products are a byproduct.

Facebook said Thursday it has struck a deal with Universal Music Group that will allow users on its properties including Facebook, Instagram and Oculus to legally add songs from the record label to their videos.

Facebook (NASDAQ:FB) and Universal Music Group (OTCPK:VIVHY) have signed a license agreement to bring the former's music to the social networking site and its properties.

Many industry insiders believe that Facebook's brand new venture with Universal Music Group may present a challenge for one of its biggest competitors.

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That deal promised to give "recording artists songwriters improved content flexibility and growing compensation from YouTube's ad-supported and paid-subscription tiers, while also furthering YouTube's commitment to manage music rights on its platform".

A spokesperson for Universal Music had not responded to a request for clarification, as of publishing. The other major record labels are close to cutting similar deals with Facebook, sources told Billboard. The series will start airing in January. For context, music streaming leader Spotify has converted around 40% of its active users into paying subscribers. Zuckerberg defended his organization to the President and stated that Facebook helped the country engage in dialogue during the 2016 Presidential Campaign.

On Oculus, meanwhile, it gets potentially even more interesting. Messenger, Instagram, and Facebook all made the Top 6 of the 2017 Top Apps Charts.