Snap, the parent company of Snapchat, wants to license music for users to embed in posts and possibly even launch hit songs.
The Wall Street Journal reported the company is in talks with Sony Music Entertainment, Universal Music Group, and Warner Music Group, both of which have the biggest artists in R&B and hip hop signed to their labels.
Competition in this space is steep. Last year, Facebook cemented licensing deals with major labels, once again beating Snap to what could be another way to increase advertising sales.
Licensing music from these labels could be the best way for Snap to monetize its 186 million daily active users and grow advertising revenue.
E-Marketer forecasts that Snapchat’s U.S. video ad business is estimated to grow 19.9% year over year in 2021, reaching $727.4 million. The company has made inroads into video advertising, but still has a small slice of the overall market, as its nemesis Facebook still commands the lion’s share of all video ad spending.