YouTube / PRS: Full statements from both sides
Want to get the full skinny on today’s licensing dispute between Google/YouTube and PRS for Music, which has led to thousands of music videos being removed from the site? Both sides have issued statements – YouTube via its blog and the PRS via a press statement. In the interests of fullness (and fairness), both are reproduced in full below the jump.
YOUTUBE (link)
“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.
Yours,
Patrick Walker
Director of Video Partnerships, Europe, Middle East and Africa”
PRS FOR MUSIC (link)
“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.”
March 10th, 2009 at 12:55 pm
I think the PRS are being a bit economical with the truth in the statement “to pay significantly less than at present” what google are saying is we don’t want a massive increase in per play fees, thus with a massive increase combined with massive increase in plays the money to PRS would be significantly more. Google are effectively providing free advertising for the songs – which if people like them they buy.
Also what the hell has Google’s revenues got to do with this??? GM had revenue of $150 Billion for 2008 but a loss of $30 Billion, and is probably filing for bankruptcy. Did all of Google’s revenue come from UK youtube no did the majority no, did any no, youtube made a loss!
March 10th, 2009 at 2:21 pm
“Google are effectively providing free advertising for the songs – which if people like them they buy.”
You could also argue that songwriters provide the songs for the record labels who make the videos that make Youtube popular that garners advertising etc.. It’s the whole radio argument – we’re promoting songs, why should we pay you for it?
Ultimately, the songwriters should receive a royalty.
Let us not forget though that it is the major publishers who are partly to blame. By their opting out of MCPS for their anglo american on-line repertoire and creating their own solutions, CELAS etc, they have fragmented the licensing structure across the whole of Europe. This has created complex and costly ‘transactional’ barriers to any on-line operator wishing to host a music service.
March 23rd, 2009 at 1:07 pm
Great…
April 2nd, 2009 at 10:48 pm
I totally agree. Youtube makes the songs travel to ears they may never have previously reached. It is mass free advertising. People who want music for free will get it for free, youtube or no youtube. What youtube does is allow more of the paying public to hear more songs.
Example Jai Ho (PCD) is at No 5 in the charts. I mentioned it to a group of 3 girls at weekend and not one of them knew it. If it wasn’t blocked on youtube I would have shown them the video which means three more potential buyers would have heard it. Also artists make a lot of money from concerts and if these girls learn the dance routine to Jai Ho like they do with other songs, they like to see them performed live and they all regularly go to concerts. It might possibly have helped to get more concert ticket sales. Youtube helps massively at promoting these artists.
April 3rd, 2009 at 6:04 am
Elsewhere in your blog you note that the Google/GEMA talk has broken down due to YouTube’s apparent unwillingness to provide transparency.
Two principles make sense to me as an outsider to these negotiations:
1/ allow and encourage content uploaders to provide the necessary metadata for tracking. At the moment there is no way to do this at the point of upload, meaning any accountability has be done behind the scenes. I’m guessing here but presumably YouTube paid over a lump sum, unrelated to any breakdown of data (Gema’s complaint?) to PRS who then distributed it to unspecified members – YouTube’s complaint.
Again, guessing, but maybe neither side are willing to build the necessary architecture to link copyright holders to views. If anyone from Google is listening, Steve Lawson in his blog has made an excellent and workable suggestion re wiki-style metadata entry for video sharing sites.
2/ Rev share is calculated on a % per view, rather than a fixed sum per view. It’s a classic way of dealing with uncertainty – you avoid copping for heavy fees if sales/revenues are low, or missing out on revenues if sales are high. I don’t believe such entrepreneurial giants as Google haven’t considered this.
If this is currently unworkable because of issues of transparency, Google must be big enough to bite the bullet. To paraphrase Obama, ‘grasp the opportunity to become leaders’.
There is a distinction between rev share and royalty payments, however this is also pertinent: There’s a lot of other video sharing sites out there, some who like youtube offer rev share (eg Dailymotion). Others like Vimeo have advertising on site but it’s not available to content uploaders. PRS, Gema and YouTube all stand to lose if music videos migrate to sites like Vimeo, beautiful as it is, there’s less pie there than there was in YouTube.
August 10th, 2009 at 10:22 pm
YouTube has just pulled videos from the Sabam catalogue (Belgium).