Page last updated at 17:51 GMT, Tuesday, 10 March 2009

Last.FM joins Google's rights row

By Jane Wakefield
Technology reporter, BBC News website

Premium music videos will not be accessible to UK YouTube users

Online music service has waded into the row between YouTube and the Performing Right Society.

Founder Martin Stiksel said he hoped a resolution could be found to avoid illegal services from taking over.

He urged both parties to find a "workable solution, which he hoped would include cheaper and "less complicated" licences.

YouTube is removing all premium music videos to UK users after failing to reach agreement with the PRS.

Thousands of videos were made unavailable to YouTube users from late on 9 March.

Mr Stiksel told the BBC: "It has been a bold decision for Google but we are all working in a very competitive environment and the fees need to reflect that.

This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties
PRS statement

"It is a fundamental problem that we have been facing in that online music licensing is getting more complicated and more expensive," he said.

He wants to see online payment for music rights reflecting the model used by terrestial radio.

"We pay each time one users listens to a song or watches a clip and, while that is more accurate because it makes sure the more popular songs get paid more, it is also very expensive," he said.

"Terrestial radio pays a fixed minimum and that works out a lot cheaper," he added.

"We have to find commercially workable rates otherwise illegal services will win and take over," he said.

Pricing content

Consumers must be scratching their heads in amazement at such obstacles to delivering legal content in a timely and straightforward fashion.
Darren Waters, Technology editor, BBC News website

The row between PRS and YouTube has attracted high profile attention.

Lord Carter, the UK's Minister for Communications, Technology and Broadcasting, has also commented on the row.

Giving evidence before the Business Select Committee the minister said he suspected a degree of "commercial posturing on the part of both parties" but said the row was indicative of a wider issue.

"It is an example of the question of how do you price and fund content in the digital world," he said.

"We have had decades of content being funded in one way - via the licence fee and advertising - and that model is changing at a rapid speed," he told MPs.

YouTube's director of video partnerships Patrick Walker told BBC News the PRS was seeking a rise in fees "many, many factors" higher than the previous agreement.

He said: "We feel we are so far apart that we have to remove content while we continue to negotiate with the PRS."

"We are making the message public because it will be noticeable to users on the site."

YouTube pays a licence fee to the PRS which covers the streaming of music videos from three of the four major music labels and many independent labels.

Stream online

While deals with individual record labels cover the use of the visual element and sound recording in a music video, firms that want to stream online also have to have a separate deal with music publishers which covers the music and lyrics.

In the UK, the PRS acts as a collecting society on behalf of member publishers for licensing fees relating to use of music.

It said of the decision:"This action has been taken without any consultation with PRS for music and in the middle of negotiations."

"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 services relies, despite the massive increase in YouTube viewing."

YouTube is the world's most popular online video site but has been under increased pressure to generate more revenue since its purchase by Google for $1.65bn in 2006.

Services such as, MySpace UK and Imeem have also had issues securing licence deals in the UK in the past 12 months.


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