Facebook previously negotiated with the labels to let users include songs in videos they post, but it doesn't have the rights to official music videos. If it's able to obtain those rights, Facebook could share full-length videos on Watch. That would likely drive more users to the service, and it could position Watch as an alternative to YouTube.

Bloomberg says record companies have been pushing Facebook for a YouTube alternative -- one that would pay them more and better protect copyrights. And while Facebook claims Watch videos reach as many as 720 million users per month, it's likely hoping to attract more of its two billion monthly users to the service. By hosting music videos, it could do just that.

Engadget has reached out to Facebook for comment.