Brief:

• Facebook announced in a blog post two new music features on its social network. People can now add music to their personal videos without running afoul of copyright rules. The second feature, called Lip Sync Live, resembles Musical.ly and lets users post videos while mouthing the words to songs.
• The social media giant inked a deal with the three major music labels in March, according to the Verge, which will give people millions of song titles to choose from when creating their videos to share. While the feature is still in testing, the company plans to make the feature available globally. The time frame, however, is unclear.
• Lip Sync Live users can turn it on when starting a Live video and selecting an available song. Users can add a description and customize the video with masks or a background. Friends will see the artist and song highlighted on the video and can tap to follow the artist on Facebook. Lip Sync Live also has a "With" option to invite friends to join into a video, per the Verge.

Insight:

Musical.ly, which was acquired by China's Bytedance for between $800 million and $1 billion last fall, was once considered an up-and-coming marketing platform given the popularity of lip syncing with younger consumers.  However, it struggled to find sponsors because of its limited reach and high ad rates. Facebook, with its wide reach and proven ad business, could move quickly to monetize the new feature if it proves appealing to users. Facebook has been in search of new content where it can place ads as the ad load in its news feed approaches saturation.

With the new music features, Facebook is giving its users more options to express themselves on the platform, while also showing richer details about their lives that improves demographic data that the social network provides to advertisers. Often those videos will include music played during events such as weddings, birthdays, anniversaries, bar/bat mitzvahs and live concerts. Facebook can analyze these videos and help advertisers identify highly specific audiences. For example, a newly wedded couple who posts a video of their first wedding dance to Ed Sheeran's "Perfect" could be targeted for ads from realtors, home furnishing companies, financial planners and life insurance carriers.

Lip Sync Live is not only a battle of friends in a singing contest but also one between Facebook and now competitors Musical.ly or Dubsmash. This is not the first time Facebook has released similar features from other social networking apps to appeal to younger audiences who are less likely to have a Facebook account. Examples include features like Snapchat's goofy filters and QR codes.

Facebook is following in the footsteps of Google's YouTube when it comes to the fair use of copyrighted music playing in videos that people post online. Rather than sending their members take-down notices or removing the videos automatically, Facebook is banking on increased engagement by signing licensing deals with Warner Music, Universal Music and Sony/ATV Music in this deal. According to the Verge, the agreements let Facebook users play licensed songs in personal videos posted to Facebook, Messenger, Instagram and Oculus, while musicians and songwriters earn royalties from those videos featuring their work. The agreements do not apply to Lip Sync Live, which currently has a limited number of songs available, including hits like "Havana" by Camila Cabello and "God's Plan" by Drake.