Facebook’s Music Dashboard Could Unite the Fractured Streaming Market

Facebook is preparing partnerships with several online music services including Spotify that will be hosted in a music dashboard, GigaOm reports. Users will be able to stream music, see what their friends are listening to, and share their own favorites — a realization of a long-time dream within the company to make music a core part of the site.

Beyond simply being a valuable way to find new music, the feature has the more practical benefit if increasing engagement, driving users to other parts of the site, and in doing so eventually producing ad revenue. For those in the online music industry, the big potential is in allowing users to buy songs or streaming subscriptions more easily than they have been before, with Facebook Credits

The Facebook Music Landscape

Music is a fundamental driver of sharing, and users are interested in learning about music and discussing it with their Facebook friends. 46 of the top 100 most popular Facebook Pages are music-related, as we covered recently. Music streaming Page tab app developer RootMusic this last week eclipsed Electronic Arts to control the second largest number of monthly active users behind Zynga.

Meanwhile, developers are experimenting with Facebook Credits as a digital content payment method. Warner Bros began renting films, and several bands are offering access to pay-per-view concert streaming video in exchange for Facebook’s virtual currency. Facebook is currently hiring a desktop software team, which might be building music scrobbling apps that relay a user’s listening habits.

The partnership with Spotify has been in the works for months, with Facebook employees gaining access to promotional accounts as the service tries to arrange licensing deals with the major U.S. record labels. Late last month, Forbes reported the partnership was almost ready to launch, but cited a specific Spotfiy dashboard rather than one incorporating multiple services.

Music Dashboard Features

Facebook’s Music Dashboard would be hosted as an official bookmark in the site’s left sidebar. Within it, users could recommend songs, stream recommendations of friends, see charts of the music most popular with friends, and view feeds of personal listening history and what friends are currently listening to.

A persistently play/pause button located next to the Chat feature would allow users to control playback as they browse around Facebook. This would facilitate huge amounts of listening time, and therefore advertising exposure.

Partnerships – Tech Giants or Music Sites

This latest news from GigaOm indicate that the Music Dashboard could host integrations with services including Pandora, Mog, Rdio, Last.fm, Grooveshark and more. This means users will be able to port their listening experience to Facebook regardless of which service they use. As Facebook is probably looking to secure the maximum numbers of users for the Music Dashboard, this model works much more effectively than an exclusive partnership with just Spotify.

There’s also the less likely possibility it would work with recently launched cloud music services from Amazon, Apple, and Google. Amazon makes the most sense, as the ecommerce giant has integrated its website with Facebook, and its MP3 downloads store is the underdog competing with Apple’s iTunes. Public relations tension withGoogle and the recent snub of a deep integration with Apple’s iOS 5 don’t bode well for a music partnership with those companies.

Music for Credits

With all the smaller music services in need of viral distribution and Amazon looking to beat iTunes, Facebook would have a lot of leverage in potential negotiations. Perhaps not immediately, but it could allow users to buy subscriptions or MP3s via Facebook Credits, off which it makes 30% – similar to iTunes’ fee.

The ability to learn about new music from friends, listen to it, and buy access all through Facebook could make the social network a digital content sales powerhouse without itself having to sign costly deals with the record labels.

Even if Facebook at first just provides affiliate links to buy or subscribe to music off-site, by aggregating the fractured music streaming and purchasing audience, it could come out on top regardless of which services succeed.