Archive for: Royalties

Performing Rights Society Force YouTube to Remove All Music Videos for the UK

There has been a lot of talk overnight about YouTube (owned by Google) not being able to come to a royalty deal with the PRS in UK, thus leading to all music videos being removed from YouTube effective immediately. Here are links to the statement about the situation from YouTube and the PRS.

I don’t want to just run through what many other sites and news sources are writing about, I wanted to discuss why a solution didn’t happen and what is going to happen next to both the PRS and YouTube.

YouTube and the PRS couldn’t come to a royalty deal mainly because the PRS were asking for a lot and they were providing no real information in return. The PRS were asking for blanked royalties but weren’t able to specifically say what artists would receive the royalties and what amounts they would receive. YouTube stated the following:

“PRS is now asking us to pay many, many times more for our license than before…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…that’s like asking a consumer to buy an unmarked CD without knowing what musicians are on it.”

It is kind of like the PRS just expected YouTube to meet their demands no matter what they asked. In addition, on the PRS statement for some reason they mentioned Google’s last quarter revenues for 2008 in which have completely no relevance in this case. The PRS still seem to be using old methods to try to force companies into agreements that just simply aren’t realistic in this current economic climate. Remember that Pandora is not in the UK anymore because the PRS couldn’t offer them a decent agreement and forced them to basically close up shop in this country.

This leads me to believe that there is now a potential for YouTube to launch a spinoff site as already reported with all four major labels, which will attract high levels of advertisers and also possibly sidestep old music companies like the PRS.

iTunes Avoids Shutting Down

In recent weeks there has been a lot said regarding the possible rate hike for distributed music. Sites like iTunes, Amazon, and Napster to name a few, are all music distribution sites with business models that would have been greatly affected by this possible increase.

The Copyright Royalty Board was to meet to discuss a rate increase of almost 60%, which would hit deep into the profits that distribution sites make. Apple, so angered by this possibility threatened to shut down iTunes if the board passed the rate increase. Apple, who currently owns the largest margin of mp3 players on the market, the iPods, would have shut down their site? A part of me says no, perhaps an idle threat. All in all, the board has decided to keep rates the same, 9 cents per song. You can read more about the decision here.

Still, Apple may not have come out of this situation without egg on their face. The reality of one of the largest music distribution markets completely shutting down, with an mp3 player that is connected to propriety software, iTunes, may scare people into moving towards a more functional player that is not directly tied to any one site. Could Apple have shown it’s own weakness? Or is Apple relying on its millions of dedicated fans to stick with the “in” platform of choice?

For now iTunes is safe.