Users can easily opt to watch music videos on YouTube for free, potentially making it more hard to convert some of its users into paying Remix subscribers. Until now, Facebook removed any user-posted videos containing copyright music. Bloomberg reports that the video site also signed an new agreement with Sony Music Entertainment, while it reached a deal with Warner Music Group in May.
But the bigger picture is just as fascinating: "a foundation for a strategic partnership roadmap that will deliver new music-based experiences online", as the pair describe it. UMG's announcement mentions that newer music-based products will be built out between the two companies.
Crucially, the deal does not give Facebook the right to create its own version of Vevo, the music video service owned by the music labels that generates most of its views on YouTube.
Terms of the deal weren't disclosed.
This comes at the end of a year when Facebook hired a series of industry veterans for its music team, including former WMG and YouTube executive Tamara Hrivnak, who is now Facebook's head of music business development and partnerships.More news: Damian Green resigns: Theresa May's deputy quits after pornography claims
"There is a magnetic relationship between music and community".
Google's YouTube recently signed a new agreement with all three major record labels ahead of the rollout of a new music streaming service in 2018.
"This partnership is an important first step demonstrating that innovation and fair compensation for music creators are mutually reinforcing - they thrive together". Being able to add a digital music experience - akin, maybe, to a virtual concert that could be enjoyed on a smartphone or a VR headset like Oculus Rift - might represent a valuable new revenue stream. We are excited to bring that to life on Facebook, Instagram, Oculus and Messenger in partnership with UMG.
Earlier this month, Facebook released its own collections of songs and song effects.
The agreement could prove especially beneficial for Universal Music Group who's catalog includes top musical artists in today's pop culture like Taylor Swift, Lady Gaga, Kanye West, and Lana Del Rey.