Music on the internet has long been a tricky business. Music, in general, hasn’t been much better; ever wonder why you can’t find the original Murphy Brown series anywhere? Even on DVD? Music is a good part of why. But social media leader Meta Platforms (META) just inked a new deal with major entertainment platform Universal Music Group (UMG) for much better access. However, shareholders weren’t quite pleased, as shares of Meta slumped fractionally in Monday afternoon’s trading.
Under the terms of the deal that Meta signed, artists will have their songs made available on the WhatsApp platform. But not just WhatsApp, as the deal covers the entirety of Meta’s platforms, from Facebook to Threads and beyond.
Universal and Meta have been working together since before Meta was even Meta. Back when Meta was just Facebook in 2017, it and Universal set up a deal that opened up the Universal catalog for use in video backgrounds and “other social experiences.” That opened up a significant new revenue stream and likely greased the wheels for Universal to continue with Meta into its new platforms.
The Price of Avoiding Politics
In a separate development, we all likely remember that, not so long ago, Meta made a conscious decision to back off of politics going into the 2024 election. That may be because Meta drew a lot of heat off so-called “Zuckerbucks” back in the 2020 election, in which Zuckerberg and his wife, Priscilla Chan, dropped over $400 million into election influence throughout the U.S., according to the Foundation for Government Accountability. But as it turns out, the decision to avoid politics came at a price.
Several major Instagram accounts, generally identifying as “progressive,” saw their reach drop an average of 65% after Meta decided to pull back on political content. This includes names like LGBTQ activist group GLAAD and Hillary Clinton.
Is Meta Platforms Inc a Good Investment?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 24 Buys, two Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 68.61% rally in its share price over the past year, the average META price target of $549.35 per share implies 6.64% upside potential.
