YouTube users in the U.K. are going to have trouble watching their favorite music videos on the site for the foreseeable future after a negotiations between YouTube and the PRS broke down.
Stone-age Music Industry
The music industry has probably been the worst culprit when it comes to failing to evolve as the business it’s in does so. Even more than Hollywood and the movie studios, record labels have wanted to maintain their almost-monopolistic stranglehold on the industry.
But times have changed, and the Internet has, for better or worse, heralded in a new way of doing things. Old business practices can no longer be sustained, and the sooner the music industry, the record labels, and the various different organizations looking out for artists realize this, the better.
State Of Flux
At the moment, we’re in a state of flux, where the music industry doesn’t really know what to do – embrace the new means of distribution and dissemination or try and hold on by its fingertips. So it’s taking the middle-ground, taking baby steps into the new marketplace while being litigious in order to stay in the game.
What has all this got to do with online video? More than you might expect, because music videos are big business, and the Web has meant the places us, as viewers, get to watch them, has increased dramatically.
Music Videos On YouTube
We’ve already seen how YouTube is having trouble maintaining good relations with record labels. The Warner Music Group removed all its videos from the site before Christmas due to a failure to reach an agreement on revenue splits.
The other three majors are currently renegotiating their deals, but the Universal Music Group has reportedly proposed a separate domain away from the main YouTube site just for music videos. Vevo could be a much more attractive proposition for advertisers, meaning more money for both sides.
PRS Vs. YouTube
But all of a sudden, a new problem has reared its ugly head. The PRS (Performing Right Society), a UK-specific organization which ensures the owners of music and lyrics get their share of profits every time a song is played, be it on the radio, a video-sharing site, or whatever, has been negotiating a new licensing deal with YouTube. All has not gone smoothly.
YouTube suddenly decided to block U.K. access to all music videos and issued a statement explaining why. It claims that the PRS is causing two obstacles that are currently insurmountable: “prohibitive licensing fees and lack of transparency.” The first would mean YouTube losing money every time someone watched a music video on the site. The second is due to the PRS reportedly unwilling to reveal which songs are covered by the deal.
The PRS has issued a statement in response. It claims outrage on behalf of consumers and songwriters and puts the blame squarely on Google’s shoulders. It further claims YouTube wants to pay less in the new deal, despite traffic increasing massively in he time since the last agreement was thrashed out.
Conclusions
The problem seems to be that the PRS are not only equating increased page views with increased revenue, which any site owner will tell you doesn’t always correlate, but it’s seeing YouTube as Google. The statement ends with the line, “Google had revenues of $5.7bn in the last quarter of 2008,” as if that quantifies the hard line the organization is taking. Someone should tell the PRS that YouTube is still struggling to make money despite what its parent company pulls in.
This situation means U.K. users are being denied the right to watch music videos on the biggest video-sharing site in the world. To me, at least, it looks as though the PRS has tried to hold YouTube to ransom, and YouTube has decided not to play ball. The problem is that now the row is public, neither side will want to back down and lose face.
