In the 80s and 90s MTV and Radio 1 were mandatory viewing and listening requirements for any self-respecting teenager in the UK. The popularity of these forms of media has been in slow decline over recent years however. This is in stark contrast with YouTube, which is regarded as the world's largest video sharing site and whose popularity is evidenced by that fact that its revenue grew to $5.7billion in the last quarter alone.
It is therefore no surprise to find that YouTube is now one of the most common ways for people to listen to and discover new music. As of Monday 9 March however, YouTube blocked all music videos to UK consumers. This move was taken as a result of a continuing dispute between YouTube and the Performing Rights Society (PRS) over the terms of YouTube's new licensing deal with the PRS.
In order to be able to stream a music video online, a company needs to have a licence deal in place with the relevant music label in respect of the visual content and sound recording in the music video and a separate licence with the relevant music publisher in respect of the music and lyrics used in the music video. In the UK, the PRS collects the licence fees on behalf of certain music publishers.
YouTube claims that the PRS is asking it to pay "many, many times more" for its licence than it had ever paid before and that it would "lose significant amounts of money with every playback" if it were to agree to such licence fees. YouTube has also complained that the PRS has failed to provide it with a complete list of artists that will be covered by the new deal. Without such transparency YouTube cannot work out which songs are included in the deal, which YouTube claims is akin to buying a CD "without knowing what musicians are on it".
The PRS has criticised YouTube's decision to block music videos in the UK and claims that the move "punishes British consumers and songwriters whose interests we protect and represent". The PRS argues that as many consumers go to YouTube specifically to watch its members' music videos, YouTube should either pay a higher licence fee or give a share of its advertising revenue to the PRS' members.
YouTube and PRS remain at loggerheads at present in spite of suggestions that the parties intended to restart the negotiations.
This dispute represents merely the latest in a long running battle between YouTube and the music industry. As traditional revenue streams, such as CD sales, dwindle the music industry has been forced to forge a grudging relationship with YouTube. The industry's hope is that YouTube could provide it with a much-needed alternative and lucrative revenue stream.
YouTube has managed to negotiate deals with three of the four largest record labels in the world, however in December last year its talks with Warner Music were abandoned after the parties failed to come to an agreement on payment terms. As a result of this failure, thousands of videos were removed from YouTube.