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Facebook (FB) Partners With Three Music Labels From India

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Reportedly, Facebook recently partnered with three Indian music labels - Yash Raj Films, T-Series Music and Zee Music Company to use their music collection. However, the financial details of the deal have not been revealed.

Following this partnership, users in India, approximately 300 million, per Hindustan Times, will be able to add music to their videos, stories and posts on both Facebook and Instagram.

Manish Chopra, director and head of partnerships at Facebook India, stated that the partnership will enable users to be more expressive and increase their participation in the Facebook community. This will eventually boost time spent on the platform.

Notably, Thailand is also one of the newest additions to Facebook’s music community.

Facebook, Inc. Revenue (TTM)

Facebook, Inc. Revenue (TTM) | Facebook, Inc. Quote

Facebook Boosts Music Adoption

Facebook is likely encouraging its users, more than 2.7 billion, to use music across its family of services. This is evident from its partnerships with global music communities in more than 40 countries.

The company recently introduced a feature that allows users to listen to the full song on Spotify (SPOT - Free Report) after it is posted on their Facebook profile. Moreover, Facebook stated that it will soon add more partners.

Earlier, the company had signed a deal with Universal Music Group (UMG), allowing users to post videos with music from the record label on its platform as well as on Instagram and Oculus.

We believe that the use of music-based products may boost user engagement and Stories user base. Notably, Instagram had more than 500 million daily active users on Stories in fourth-quarter 2018.

Ads Drive Revenue Growth

Increase in user engagement and user base is expected to drive demand for ad slots thereby attracting advertisers. This may help Facebook at a time when Alphabet’s (GOOGL - Free Report) Google, YouTube and Twitter are increasingly trying to dominate the digital ad space.

Advertising revenues (98.4% of total revenues), which increased 30.2% year over year to $16.64 billion in the last reported quarter, are expected to be the main driver of top-line growth.

Notably, Facebook has more than 7 million active advertisers across its services. Moreover, 2 million advertisers use Stories to reach customers across the company’s family of apps. The company also launched ads in Messenger Stories.

Facebook currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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