In recent days, a number of problems have emerged concerning the relationship of Meta, and Instagram in particular, with the Italian SIAE (copyright collecting agency) and NFT.
Instagram is the popular App owned by Meta, i.e., the company once called Facebook that still controls the famous social network and messaging app WhatsApp.
However, for some time now, the social network Facebook has seemed to be somewhat in decline, while Instagram, on the other hand, continues to grow, despite facing very strong competition from China’s TikTok.
Instagram and NFT
By now, after the half-failed initiative related to its own metaverse, Meta has decided to focus mainly on Instagram, and for several months it had also begun to explore the potential related to NFTs.
The first tests were conducted in May last year, and they focused on artworks and a small number of US users.
In September, the new NFT-related features were opened to all US users, with the ability to link their wallets to share NFTs or digital collectibles.
You can now post digital collectibles on @Facebook and @Instagram ✨ Connect your digital wallet to either app and start sharing your #NFTs today.
Learn more 👉 https://t.co/aH8036aVwX pic.twitter.com/0AuZWHUFsy
— Meta (@Meta) August 29, 2022
At the time, they stated that NFTs on Ethereum, Polygon and Flow were compatible, with the goal of extending support to the Solana blockchain and the Phantom wallet as well.
However, a few days ago Meta’s head of Commerce & FinTech, Stephane Kasriel, said they are scaling back digital collectibles (NFTs) to focus on other ways to support creators.
Some product news: across the company, we’re looking closely at what we prioritize to increase our focus. We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses. 🧵[1/5]
— Stephane Kasriel (@skasriel) March 13, 2023
While there is not much more information about this, it is assumed that Meta has simply decided to stop focusing on NFT features, although for now it does not appear to have eliminated them altogether.
Indeed, it does not appear that this initiative has been very successful, perhaps partly because it was undertaken at an unfavorable time.
NFT Bubble
Taking as a reference the dollar volume of NFT trades on the main marketplace, OpenSea, the peak occurred in January 2022 at the height of the bubble.
That bubble then burst, shortly after the bursting of the bubble in the crypto markets, so much so that by September, when Meta actually launched NFT functionality on Instagram, trading volumes were down 93% from their highs at the beginning of the year, and 87% from a year earlier.
Although they were still 230% higher than the first NFT market boom in March 2021, the hype was now over.
It is possible that Meta’s decision to enter this market was made during the bull run, that is, when the hype was exaggerated, and that afterwards they simply discounted the bursting of the bubble.
Last month, the NFT market seemed to have recovered somewhat, with $700 million in volumes traded on OpenSea, or twice as much as in September 2022, but the 2021 hype has now worn off.
Given that Meta is actually riddled with problems, to the extent that it is continuing to lay off thousands of employees, it may be that they have decided to cut off some dead branches.
Instagram and the Italian SIAE
The decision not to renew the agreement with the SIAE can also be understood in this context.
SIAE is the Italian Society of Authors and Publishers, which is the organization that protects copyrights in Italy.
Meta decision
Yesterday ANSA revealed that Meta has not renewed its licensing agreement with the SIAE, and so it will be forced to remove from all of its platforms intellectual works protected by the Italian Society of Authors and Publishers.
In particular, it will be forced to remove from Instagram’s catalog all music by authors registered with the SIAE, so much so that a Meta spokesperson confirmed:
“The protection of the copyrights of composers and artists is a priority for us and for this reason from today we will start the procedure to remove the songs from the SIAE repertoire in our music library.”
However, the spokesman also mischievously commented that Meta has licensing agreements in more than 150 countries around the world, and that it will continue its efforts to reach an agreement with the Italian SIAE “that satisfies all parties.”
The SIAE itself added that Meta’s decision to exclude SIAE’s repertoire from its catalog is unilateral, and remarks on the matter stating that they were in fact asked to accept a unilateral proposal from Meta “regardless of any transparent and shared assessment of the actual value of the repertoire.”
As such, the issue appears to be an economic one.
Indeed, Meta is making extensive and deep cuts in expenses, and probably had in mind to cut costs related to the exploitation rights of SIAE-protected songs on its platforms as well.
Evidently SIAE did not agree to accept a reduction in revenue, and so the negotiations broke down because the two companies could not find common ground.
From the words of Meta’s spokesperson there seems to be a willingness to resume negotiations, but from those of the SIAE there also seems to be an unwillingness to negotiate on the economic figures requested.
The fact remains that Meta is not experiencing a good time at all, economically speaking, and it is not only the company’s employees but also the users of its platforms who are paying the price.
