The UK vs. YouTube & The New Music Industry
COMMENTARY: By suddenly taking down music videos in the UK, Google's YouTube proved that it could walk away from the table. Music videos, particularly those just in the UK, are something that the mighty Google can live without. Anyone who has ever been involved in high stakes negotiations has probably reached a similar moment. To move the ball forward you need to prove – or at least appear to prove – that you can walk away if necessary.
UK licensing body PRS For Music has cried foul; and they have every right to. But in the end, who needs whom more? Google's YouTube wants UK eyeballs, but not if it can't make money. In the end, PRS clients will want the income YouTube brings, even if smaller per play than before. If the dispute is not resolved quickly, some labels, as with Merlin and MySpace, will just bypass the PRS and get their content back up.
Who is the villain? Many in the press want to skewer Google for unilaterally disrupting their video fun, but they forget that it was the PRS that forced Pandora out of the UK as well.
"It's the UK music industry that is the biggest looser."
Who suffers? The fan, as usual, who just lost a major source of music discovery and found another reason to be angry at the music industry.
But it's the UK music industry that is the biggest looser. From online royalties to ISP interference, the birthplace of The Beatles and Sex Pistols seems determined to send the message that it has no intention of being an incubator for new music tech and the new music industry itself. – Bruce Houghton
I think this is a very interesting move by Google. It makes me believe that the rumours of a few days ago in which mentioned that Google was in talks with Universal about a spinoff music site are true and will happen sooner rather than later. If Google agree a deal with Universal and other major labels then I dont think they have to worry about the PRS.
Why is the British music industry the biggest Loser? I beg to differ. First, YouTube and Google removing the videos shows that they have the ability to control the platform on which the videos reside. One of the claims they make regarding their liability, or lack thereof, for copyright infringement is the inability to control what is on the site. Second, in the licensing of music for synchronization with video the fees are (generally) split equally between the underlying song and performance of the song. YouTube has made deals with the owners of the sound recordings which have been at a higher valuation than those they have made with publishing. Imparting a greater value to one element is not an effective negotiating tool. PRS wants to be, and should be, on equal footing with the sound recording owners. Among other reasons, a cover song is of the underlying song and not the performance. All of those videos of people covering the biggest hits of the day actually flow back to the songwriter and publisher not the sound recording owner and performer.
Why shouldn’t songwriters be entitled to an equal share, or close to equal share, as the performers?
Nancy,
Good points, but any negotiation that pushed Pandora out of the market and might do the same for YouTube would, in my opinion, have been handled badly by the PRS.
Learning to get along and be flexible while we ALL figure out what all of these new platforms and services mean to music sales, advertising and other revenue streams is essential to rebuilding the industry. So bad Google, but bad, bad, bad PRS.
As reported in the press at the time, allegedly Pandora wanted to pay a fraction of a penny per streamed track and the PRS wanted over 5p per track. That is a huge gulf and IMO shows a distinct lack of understanding on the PRS’s part in the nature of the technology and the volume of music a platform like Pandora will deliver. Wth YouTube, it sounds like deja vu all over again.
I disagree with you Bruce it is not PRS’ responsibility to negotiate to the benefit of a user of music. PRS has a duty to its members to represent their best interest. Other services, like Rhapsody, have launched on a rolling basis internationally after acquiring the rights necessary to offer their services.
YouTube launched its service without a revenue model but has managed to pay for all the infrastructure required to offer the service without paying for the product it offers, music. Continually 9 out of the top 10 videos on YouTube use commercially released music as the primary focus.
Instead of bending over backward to mollify Google and YouTube, the music industry should work with companies who launch their services legally and offer reasonable rates.
The Universal issue raised by Stephen Finch is a red herring – PRS represents a composers right that is assigned directly to PRS and that Universal records cannot bypass. Look a the PRS Board though http://www.prsformusic.com/about_us/prsboard/Pages/PRSboard.aspx and you’ll see all the usual names there for the major publishers. There is the issue here that is is easier to kick up a stink in the ‘less important’ UK to try and set precedential rates that can be brought back to the US later. The UK could be getting used as a testing ground without hitting international royalties too hard. The fact is that the USA has never had a proper royalty system that reflected the value of music and the UK is paying for that now. YouTube may say it is too expensive but hey, if I could give things away for nothing I could make a great business too.
Nancy,
How would covers of my songs posted on youtube show up on my EMI statement?
brendan b brown
wheatus.com