Tuesday, 10 March 2009

YouTube 0 - 0 PRS (LOSE : LOSE)

Yesterday evening the news broke that YouTube was blocking all premium music videos to UK users after failing to reach a new licensing agreement with the Performing Rights Society (PRS).

This morning I listened to an interview on Radio 4 with representatives from both sides and from what my little brain could take in pre- cup of tea it seems YouTube and the PRS disagree on the amount that YouTube should in future be paying to the PRS in royalties for streaming premium music videos. In simple terms, the PRS wants more money than YouTube is willing to pay. From what I understand, the PRS wants to raise the costs of the licence because the number of people watching premium music videos has increased considerably over the last year or so. Meanwhile YouTube say the proposed increase in fees is not "economically sustainable" for them as a business. Obviously I have simplified the situation to make this post a reasonable length so I recommend you read both sides of the full negotiation details here and here.

From where I'm sitting it's currently a lose:lose situation. The plug has been pulled, the product removed from the British shelves so to speak, no one makes any extra money and the goose will not get as fat.

Who suffers more?
I haven't seen any figures so can't comment in financial terms but in simple terms I'm guessing if YouTube really can't run a business on the new terms being put forward by the PRS and both parties can't come to a workable compromise then in the short term it is probably financially better for YouTube to cut the UK out of the picture. On the other hand in the long term, not being able to advertise premium musicians through music videos in the UK (and I'm assuming YouTube is one if not THE favourite sites to view such videos) could be harmful to the overall value of the UK music industry and as a result harm YouTube, The PRS and the musicians revenues.

I don't know what the answer is and I'm not sure YouTube and the PRS do either so I'll be following these talks with a certain amount of interest over the coming days.

In the meantime I'd like to recommend a book to both YouTube and the PRS I just so happen to have a copy of for sale this week called 'Getting To Yes' - 'Negotiating an agreement without giving in' by Roger Fisher and William Ury. It's theirs for £1 (+ postage and packing) or I suppose they could just borrow it from their local library for free or even just read it for free on google books here.

P.S. It might not seem like it but I really am selling a book called 'Getting To Yes', if anyone is interested in buying my copy for a £1 (plus P &P) please send me an email to tlsreview [at] gmail dot com. Remember how good it feels to own your own book, what a privilege!


The Daily Growl said...

Or maybe just move videos to other sites like Vimeo?

chalky said...

Possibly but I'd imagine Vimeo could eventually run into the same sort of financial issues if they use a similar business model to YouTube?

If another video streaming site did manage to run a business that pulls in a significant profit at the proposed new PRS costs then I guess it could look bad on YouTube and Google if they keep trying for lower PRS fees. The trouble is, with no knowledge of the figures involved in this industry I just have no idea whether the fees the PRS are proposing are actually that ridiculous or whether YouTube are just trying to cut/maintain a bigger profit margin for themselves.

Until someone explains to me otherwise I'll assume it's a bit of both and the overall business model isn't really working well for either parties.

Ahh the music industry is in desperate need of new ideas.

The Daily Growl said...

Yeah. They always look like lumbering idiots in the face of new technology.

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