This news item has been covered everywhere, but it is worth highlighting. YouTube has decided to blackout all of its official music videos as of yesterday in the UK due to a negotiating failure with the British Performing Right Society (PRS), the collecting agency for British writers and composers. YouTube claims:
"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."PRS on the other hand are "shocked and disappointed". ORLY?
So, who is in the right here? There can be no doubt that YouTube have taken this step as a negotiating strategy, and it does seem a bit disproportionate. However, it is the logical strategy given the over-reaching demandsthe from PRS. Seemingly, PRS is suffering from chronic short-sightedness that would rather lose the vast promotional value of YouTube to its associates in exchange for a squeezing a few more pence from the service providers. Demographics do not lie, and YouTube has become one of the best places to promote new musical talent to younger audiences, as well as cementing interest in established brands. I find it astounding that PRS does not see the new technologies as allies instead of cash cows that must be milked for all they are worth.
Who wins? Believe it or not, independent labels win. As of today, typing "music video" on YouTube will return several independent videos not affected by the blackout, including one of my new favourite songs, Oren Lavie's amazing "Her Morning Elegance". Here is an anecdote for the bright sparks at PRS: I first saw this video on YouTube after it went viral, and now I have the CD playing on my computer as I write.
I have little doubt that PRS will have to cave in on this one, as I cannot imagine PRS members being happy about being shut out of one of the largest promotional outlets they have at the moment. If they do not relinquish their demands, other valuable services are set to follow YouTube's lead, such as MySpace.