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Music Business News, February 21, 2018

Spotify indicated it may soon unveil its first physical products. And Facebook signed a licensing deal covering hundreds of thousands of rightsholders worldwide. Also, Google’s traffic to publishers increased significantly.


Spotify Unveiling New Streaming Hardware


Spotify may soon release its own streaming hardware, judging from a few recent job postings, reported Music Ally and also Billboard.


A job posting for “Operations Manager – Hardware Product” clued experts in on the idea that the Swedish company might be “on its way to creating its first physical products and setting up an operational organization for manufacturing, supply chain, sales & marketing.”


Industry insiders were not clear on how close Spotify is to completing hardware, but the job posting indicated that the company’s new hire would “define and manage” elements of a hardware division like distribution, supply chain, customer service and logistics for the project. The ad also implies that Spotify might be close to finishing the design of the hardware and is ramping up to manufacture and sell it.


Other production-related jobs, all based in Stockholm also popped up: “Senior Project Manager Hardware Production;” “Project Manager Hardware Production & Engineering.” The listing for both positions say the “positions will drive the project with a team of world-class Spotify engineers and designers, contractors, manufacturing suppliers, etc.”


Spotify is similar to a majority of other streaming services in that its catalog is streamed via third-party home devices. Two exceptions are Amazon Music, which has the Echo system and Google Play, which has Google Home. Apple recently released its HomePod speaker, which does not support direct playback through Spotify.


Facebook Signing Licensing Deal with ICE Services


Facebook signed a deal with ICE Services today, according to TechCrunch.


ICE Services is a licensing group and copyright database that houses 31 million works. It represents PRS in the UK, STIM in Sweden and GEMA in Germany and provides music licensing and royalty collection for those represented by the group when their music is used on Facebook, Instagram, Oculus and Messenger.


This deal marks a significant ramp-up of Facebook’s recent push to license music. It is the first multi-territorial license signed by Facebook with an online licensing portal. It will cover 290,000 rightsholders and 160 territories.


Facebook has been setting the stage for its own streaming music capabilities for months, signing deals with record labels and other music industry entities to ensure that the music used in videos and other content posted on its different sites does not infringe on copyrights. This latest move may indicate the social media company is preparing to create its own music service in the future.


ICE and Facebook did not release any specific financial details of the deal. An ICE spokesperson said, “ICE is one of a number of licensors of publishing rights and therefore the commercial terms associated with the deal must remain confidential. There is a robust and detailed governance process which operates to assess the detail of major ICE license deals and includes representation from writers and publishers of ICE’s customers.”


A report released in September indicated that Facebook is making deals worth hundreds of millions of dollars. In the past few months, it has inked deals with Universal Music Group for user-generated videos, with Sony/ATV and another with Kobalt, HFA/Rumblefish and Global Music Rights. Facebook has also pursued giving creators access to “no-name” music through its new service Sound Collection. ICE represents some artists that fall outside those agreements because of the territories they cover or label licensing issues.


The ICE deal covers videos that are uploaded to Facebook, Instagram, Oculus and Messenger by the platform’s 2.1 billion registered users and will also be added in a catalog that people can access when they are creating videos and adding them to Facebook “from scratch.” While Sound Collection is not mentioned by name in the ICE press release, it is likely going to be a part of the deal, which would mark the first time Facebook is adding premium music to Sound Collection.


Head of International Music Publishing Business Development at Facebook, Anjali Southward said, in a statement, “We are delighted to continue deepening our relationship with music by partnering with ICE in a first-of-its-kind licensing deal … Facebook’s journey with music is just beginning and we look forward to working with ICE and songwriters to build a community together around music.”


ICE also indicated it will work with Facebook to create a royalties reporting system. The company has arrangements with 40 other streaming platforms and has paid out 300 million euros in royalties to its members since its foundation in 2016. Before 2016, the three organizations it represents worked on their own, but eventually joined forces to strengthen their bargaining power.


Ben McEwen, Commercial Director at ICE Services said, “We are excited to work with Facebook to ensure we are delivering value back to creators for the use of their works on Facebook platforms. The future of music depends on our industries working together to enable the development of new models for music consumption in the digital age, to ensure a healthy future for songwriters and composers.”


Google Driving More Traffic to Publishers


Google’s traffic to publishers has increased to the point that it is making up for traffic lost from Facebook, indicated a set of new data from Chartbeat.


According to Recode, Facebook has been adjusting its algorithm so posts from friends and families get prioritized in the newsfeed over those from publishers and other entities. Therefore, more publishers have been signing up for Accelerated Mobile Pages (AMP), Google’s publishing format. The format was launched in 2015 and hosts content from publishers directly on Google’s servers so it can be called up more quickly for mobile users.


Google held a developer conference last week during which it was announced that 31 million websites use AMP, an increase of 25 percent since October 2017. Google said fast-loading mobile webpages help ensure people do not give up on searches, which sends more traffic to websites.


Chartbeat figures indicated that in the first week of this month, Google sent 466 million more page views to publishers. This was an increase of 40 percent over January of 2017. Page views came largely from mobile and AMP. Facebook sent 200 million fewer – 20-percent less.


Chartbeat is a publisher analytics company that works with companies including the New York Times, CNN, the Washington Post and CNN.


Similar data was published by digital analytics company Parse.ly last year and also showed that Google was the main source of referral traffic to publishers.


Referral traffic comprised 47-percent of publisher traffic thus far in 2018. Google and Facebook were responsible for a majority of it.


Experts predicted that Google’s referral traffic to publishers will go up even further. At the developer conference, Google unveiled its AMP for email and AMP Stories, Google’s version of Snapchat and Instagram stories, which will now show up in users’ search results.

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