Monday, March 09, 2009

YouTube Blocks Premium Music Videos to UK Users

Image representing YouTube as depicted in Crun...Image via CrunchBase

YouTube in the UK is removing all premium music videos to UK users after the site failed to agree a new licensing deal with the Performing Rights Society for Music. Thousands of videos were made unavailable to YouTube UK this evening which is very disappointing for users of the site. YouTube said today that after the expiry of its former deal, PRS had proposed new payment terms that would be financially prohibitive for the site and would require YouTube to pay out more than it makes from the ads next to each video. Below are both statement released in full -

YouTube, the UK and the Performing Rights Society for Music

We have invested a lot of time and effort trying to ensure that our community can find and enjoy the music they love, and we have strong partnerships with three of the four largest record labels in the world, as well as many independent labels. But copyrights in music can get pretty complicated. For example, there may be several different copyrights in a single music video, controlled by different organisations with different interests. The visual elements and the sound recording of a music video are typically owned by a record label, while the music and lyrics of the song being performed are owned separately by one or more music publishers. These publishers often designate organisations called collecting societies to issue licences and collect royalties on their behalf. In the UK we've had a licence from the collecting society called PRS for Music to make music videos provided by our record label partners available to our users in the UK.

Our previous licence from PRS for Music has expired, and we've been unable so far to come to an agreement to renew it on terms that are economically sustainable for us. There are two obstacles in these negotiations: prohibitive licensing fees and lack of transparency. We value the creativity of musicians and songwriters and have worked hard with rights-holders to generate significant online revenue for them and to respect copyright. But PRS is now asking us to pay many, many times more for our licence than before. The costs are simply prohibitive for us - under PRS's proposed terms we would lose significant amounts of money with every playback. In addition, PRS is unwilling to tell us what songs are included in the license they can provide so that we can identify those works on YouTube -- that's like asking a consumer to buy an unmarked CD without knowing what musicians are on it.

We're still working with PRS for Music in an effort to reach mutually acceptable terms for a new licence, but until we do so we will be blocking premium music videos in the UK that have been supplied or claimed by record labels. This was a painful decision, and we know the significant disappointment it will cause within the UK. And to be clear, this is not an issue with the record labels, with most of whom we have strong relationships.

While negotiations continue, we'll still be working to create more ways to compensate musicians and other rights-holders on YouTube. In addition to various advertising options, we recently introduced a click-to-buy feature that enables fans to purchase downloads of their favourite songs. We're also proud of our Content ID tools that help rights owners identify their content and even use the power of our community to increase advertising and revenue potential.

We will continue to seek partnerships that benefit our community, music publishers, music labels and, of course, musicians and songwriters, and we will work hard with anybody who shares this commitment. We hope that professional music videos will soon be back on YouTube for our users in the UK to enjoy, and if and when that time comes, you can be sure that you'll be the first to know.

Patrick Walker
Director of Video Partnerships, Europe, Middle East and Africa

PRS for Music Statement in relation to Google/YouTube announcement

PRS for Music is outraged on behalf of consumers and songwriters that Google has chosen to close down access to music videos on YouTube in the UK.

Google has told us they are taking this step because they wish to pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing.

This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties. PRS for Music has not requested Google to do this and urges them to reconsider their decision as a matter of urgency.

Steve Porter CEO PRS for Music said "We were shocked and disappointed to receive a call late this afternoon informing us of Google's drastic action which we believe only punishes British consumers and the songwriters whose interests we protect and represent."

Google had revenues of $5.7bn in the last quarter of 2008.
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