Meta unveils new Facebook music revenue sharing feature to better compete with TikTok

When Bytedance bought Musical.ly and rebranded it as TikTok, it allowed content creators to use licensed music in their videos and still be able to monetize their content.

Since the holy grail of short films aka Vine, content creators have flocked to Youtube, TikTok and Meta Platforms Inc META continue to create content for their subscribers.

What happened: In a bid to better compete with TikTok, Meta has introduced a new monetization feature that allows creators to use licensed music from popular artists in their Facebook videos and earn a share of in-stream ad revenue, according to a Meta press release.

This will allow video creators to receive a 20% revenue share on eligible videos, with a share going to Meta and the music rights holder. These videos must be at least sixty seconds long and contain a video component.

Music revenue sharing rolled out worldwide on Monday, and eligible videos in the US will be the first to monetize in-app ads.

Also read: How Mark Zuckerberg ‘turns up the heat’ to get rid of employees who ‘shouldn’t be’ at Meta

Why it matters: The Music Revenue Share feature is the first of its kind in the music industry, giving creators and music rights holders a new way to earn money from videos on Facebook.

In 2021, TikTok became the most installed app among young users overtaking Meta’s Instagram, forcing Meta to switch to shorter videos, according to the Wall Street Journal.

CEO of Meta Mark Zuckerberg said on a conference call, “What’s somewhat unique here is that TikTok is already such a big competitor and also continues to grow at a pretty rapid rate from a very large base,” as reported The Motley Fool.

And after: Zuckerberg also noted that Facebook and Instagram “Reels” have the highest growth potential as it has become the trend in content creation over the past few years.

In an interview on CNBC’s Mad Money, Zuckerberg said user feeds will now be geared towards AI recommendations instead of the ones you follow.

If Meta wants to better compete with TikTok, the transition to “Reels” and shorter content will be key to generating monthly active users and ad revenue.

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