Indian music label Saregama has ended its global deal with Facebook and Instagram parent Meta to feature its songs in Facebook & Instagram Stories and Instagram Reels, Entrackr has found. A source told Entrackr that Meta couldn’t accept Saregama’s terms for renewing the deal. Entrackr was further able to confirm this development by looking up Saregama songs on Meta’s platforms that the label’s titles have been discontinued.
Meta didn’t provide a comment, saying it would not comment on specifics of deal terms with its music partners; the company said it would work to expand its music catalog. A spokesperson for Saregama did not respond to a query by Entrackr.
Songs frequently get a boost or a new lease of life on short video platforms, especially if multiple popular creators pick them up and make a tune go viral. For instance, Dholida, a song from Gangubai Kathiawadi’s soundtrack, which is owned by Saregama, went viral on Meta’s Instagram Reels early this year.
While Saregama exited this deal, it signed on with Google’s YouTube Shorts, a service similar to Instagram Reels. It announced this deal on Tuesday, leading to a 5% increase in its stock price. The company has not previously announced the termination of its deal with Meta.
At some point in June, music from the label stopped appearing on Meta’s platforms. Saregama is among the oldest surviving music labels in the world, founded in 1902, and has a catalog of 1.2 lakh songs. Meta (then Facebook) had first signed a deal with Saregama in June 2020, since which it has been active for two years. The deal came after TikTok was banned in India, handing tech majors like Google and Meta an opportunity to enter the short video space.
For the last four quarters, music revenue for Saregama has largely stagnated, according to an investor presentation. Year on year revenue has, however, grown by 61% due to the pandemic affecting the corresponding quarter last year. Sales for Carvaan, the label’s physical music player, have also been reducing for three consecutive quarters.
Saregama and other Indian labels have had contentious relations with global tech platforms who are rushing to license their content for streaming services and short video platforms. In 2020, Saregama went to court to force Spotify to take down some music it said it owned the rights to. The label later signed a deal with the platform that allowed the latter to carry its music.
Similarly, Tips Music had a similar battle with Airtel Wynk, with the telco-owned streaming platform threatening to use a now-invalidated tool of Indian copyright law to forcibly license the label’s music for its streaming platform.
Music labels have been getting paid Rs 0.10–0.18 per stream on platforms like Spotify and JioSaavn, according to an industry executive. But it is unclear if similar terms apply for short video platforms, where creators can generally only use shorter clips of songs, and platforms themselves only earn ad revenue.
An industry expert told Entrackr that historically, short video platforms started out signing lump sum deals with labels, as their business model wasn’t established yet, and deferred details of a more substantial revenue sharing plan to a later date. That might explain why the label and Meta couldn’t come to an agreement on what would be a fair sharing model for its music on Reels and Stories.
Correction (14:35): A previous version of this story misstated the date of Saregama’s litigation with Spotify.
