If Facebook Music Really Launches, Will It Get Dissed By 50 Cent?

Rumors surfaced again yesterday on Billboard and today in other media outlets that Facebook is in talks with the record labels to launch a music service that will include either free ad-supported music streams or paid downloads. But Facebook should really stay out of the music business. If it tries to enter in a big way it risks alienating not just its partners, but musicians as well. In fact, 50 Cent already dissed Facebook once. He took down his official Facebook page for at least a couple months. What is happening with 50 Cent is indicative of a bigger battle brewing in the music industry between artists and record labels over who will get to control future online revenues. Both record labels and artists did not like the fact that MySpace was making money off of their artist pages with ads, so they started negotiating deals to get a cut of the action. The prospect of Facebook becoming a competitor was welcomed because Facebook treats artist pages like any brand or canvas page. The ads on that page belong to the brand or artist or application developer, whatever the case may be. But with music, Facebook may now be putting itself in between artists and record labels, who both have claims to that page. It is easier for Facebook to negotiate directly with record labels, but in most contracts it is the artists themselves who control their Websites and pages on social networks. Of course, if they want to stream or sell music from those pages, that is where the record labels come in. Facebook is negotiating with the record labels, but the artists may be going elsewhere, as we are seeing with 50 Cent. As traditional music revenues are drying up, the labels want to transition to online revenues as fast as they can. But if those revenues are associated with advertising on fan sites, the artists themselves may have a greater claim to them.
http://www.techcrunch.com/2008/03/05/if-facebook-music-really-launches-will-it-get-dissed-by-50-cent/