Kobalt and Meta Make Peace with a New Licensing Deal

Kobalt and Meta Make Peace with a New Licensing Deal

Published: October 03, 2022

Kobalt Music Publishing with its massive library of more than 700,000 songs has managed to strike a new licensing deal with Facebook and Instagram’s parent company, Meta. Kobalt sent out a memo to its clients on September 20, stating that the company has established a new deal with Meta and that their clients’ repertoire will soon return to the platform.

The music publishing company sent out a completely different memo to its partners just two months prior on July 23, letting them know that the US licensing deal with Meta had expired and that they were unable to reach a new agreement. At the time, this meant that Kobalt was pulling the entire repertoire from all Meta services in the US.

“We’re writing this morning to let you know that as of last night at midnight PDT, Kobalt’s license with Meta expired in the United States,” the July memo read. “Over the course of several months, we’ve worked diligently and in good faith to come to an agreement covering a new license for Kobalt’s repertoire.”

The memo goes on to state that the two companies were unable to resolve “fundamental differences” and that Kobalt couldn’t patch things up in their clients’ favor. As a company that puts its creators and songwriters first, Kobalt claimed that they were willing to keep negotiating until a more favorable deal was reached. For the time being, they decided to pull all licensed content from Meta’s services in the US, such as Facebook and Instagram.

However, the more recent September memo stated that they are “pleased to announce that Kobalt’s repertoire is once again licensed on Meta Platforms in the US.” Apparently, the two companies were finally able to resolve their differences and come to a mutually beneficial agreement.

“You should expect to see your repertoire return to Meta’s platforms shortly.”

Kobalt Music Publishing’s new deal with Meta comes in the wake of several similar licensing deals. Warner Music Group and its rival Universal Music Group formed partnerships with Meta a month before Kobalt, suggesting that the tech giant had a change of heart regarding song licensing.

It’s worth pointing out that Kobalt had been sold to a private equity firm after falling-out with Meta. The Francisco Partners (FP) firm is now the majority stakeholder of Kobalt, owning 90% of the company.

Part of the reason why such disagreements happen lies in the nature of licensing music to social media platforms. Unlike Spotify or Apple Music, social media platforms pay large sums of money in upfront fees to licensing partners, rather than relying on a month-to-month revenue share arrangement. Such deals can get overly expensive very quickly, which may have been the reason behind the failed July deal in the first place.

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