Should investors and songwriters join hands and sing a rousing chorus of #FuckTheZuck? 

Facebook appears to have no licenses for music.  No sync licenses, no mechanical licenses, not even public performance licenses.  Yes, the world’s 6th richest man apparently thinks he doesn’t need music licenses for the world’s largest media company.  The Zuck seems to be in utter denial that it hosts hundreds of thousands if not millions of music videos.  Is this dude only surrounded by sycophantic “yes” men/women?  How could he not know he needs to pay artists? (Ed. Note:  Maybe a habit he picked up from Sean Parker?)

We artists may complain about the rates we get from YouTube, but at least they admit they need licenses!   Look if small shops,  music venues and small webcasters can get licenses, why doesn’t the Zuck?  Tech firm exceptionalism? Arrogance?  Sheer ignorance?  Either way this is absolutely shameful.   How is this any different than a luxury hotel billionaire stiffing refusing to pay subcontractors?

But it’s not just artists that are screwed by The Zuck’s refusal to license music and pay royalties, investors and shareholders are likely to suffer as well.  Many investors and analysts are beginning to speculate that Facebook may have peaked or plateaued in value.   Here’s a quote from a Wall Street Journal article titled Have We Seen Peak Facebook? 

“To achieve its next leg of growth, it must win over ad dollars from TV. Facebook has been promoting its live-streaming capabilities and is testing a new video-ad format that would insert ads into the middle of live videos. The company is also developing a video-centric app for TV set-top boxes and is discussing licensing long-form TV-style programming from media companies, The Wall Street Journal reported. But Facebook faces stiff competition for content and viewing hours from traditional TV and more established video-streaming platforms.”

It’s simple,  in order for Facebook to justify it’s lofty stock price (as measured by forward P/E ratio) it needs to get its hands on some professionally produced video from real media companies.  And generally this content has music in it.  And when Facebook reproduces the video content that contains music, at the very minimum they will need a public performance license!   Unless Facebook wants to limit itself to “long form content” with low grade royalty free “library music” it will have to get music licenses.  It can’t pursue a serious video strategy that gets TV ad dollars without these licenses.

Until Facebook grows up and starts paying royalties to songwriters investors should be very careful.