Meta Unveils New Facebook Music Revenue Sharing Feature To Better Compete With TikTok

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

Ever since the holy grail of shorts aka Vine, content creators flocked to Youtube, TikTok and Meta Platforms Inc META to continue making content for their followers.

What Happened: In an attempt 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 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 with a video component in them.

Music Revenue Sharing rolled out on Monday globally, and eligible videos within the U.S. will be the first to monetize in-stream ads.

Also Read: How Mark Zuckerberg Is 'Turning Up the Heat' To Get Rid of Employees Who 'Shouldn't Be' At Meta

Why This Is Important: The Music Revenue Sharing feature is the first of its kind within the music industry, giving both 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 transition to shorter-form videos, according to the Wall Street Journal.

CEO of Meta Mark Zuckerberg said in a conference call, "The thing that is somewhat unique here is that TikTok is so big as a competitor already and also continues to grow at quite a faster rate off of a very large base," as reported by The Motley Fool.

What’s Next: Zuckerberg also noted that Facebook and Instagram “Reels” have the highest potential for growth, as this has become the trend in content creation over the past few years.

In an interview on CNBC’s Mad Money, Zuckerberg said that users' feeds will now be shifted towards artificial intelligence recommendations instead of who you follow.

If Meta wants to better compete with TikTok, transitioning to “Reels” and shorter-form based content will be essential in driving monthly active users and ad revenue.