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YOUTUBE will block all music videos from being viewed by users in Britain after it was unable to reach a deal with a royalty collection group.
The world's largest video sharing website said PRS for Music, a British collection society that collects royalties on behalf of nearly 50,000 composers, was asking it to pay "many, many times" more than the previous licensing agreement that expired.
"The costs are simply prohibitive for us – under PRS's proposed terms, we would lose significant amounts of money with every playback," the company said.
The move is the latest sign of the tension between YouTube and the music industry.
It also indicates that YouTube is resolving to keep operating costs under control as it strives to generate profits for owner Google.
YouTube said PRS was unclear about which songs would be included in the renewed license.
"We've been talking to them for a long time and we're still talking to them," said Patrick Walker, YouTube director of video partnerships for Europe, Middle East and Africa.
al of Sydney Mr Walker described it as a "painful decision".
But PRS disputed YouTube's version of events and said it was caught by surprise by the announcement in the middle of ongoing negotiations.
"We were shocked and disappointed to receive a call late this afternoon informing us of Google's drastic action," said PRS for Music chief executive Steve Porter.
PRS said in a statement it was "outraged" on behalf of consumers and songwriters by YouTube's move.
"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," the London-based organisation said.
The PRS statement pointed out that Google saw its revenue grow to $US5.7 billion ($9 billion) in the last quarter. The figure will likely be juxtaposed against the fast dwindling fortunes of the music industry.
Some rights-holders argue YouTube should pay a higher fee or share more advertising revenue since many users come to watch their music videos.
The deal between YouTube and PRS is separate from YouTube's relationships with major record companies, which have also been strained at times.
YouTube and the music industry have had an awkward but mutually beneficial partnership.
On one hand, label executives acknowledge that the popular video site is the way many people discover new music, especially as the power of radio and MTV wanes.
But with the industry seeing plunging CD sales, the labels hope that YouTube will also serve as a key revenue source.
The world's largest video sharing website said PRS for Music, a British collection society that collects royalties on behalf of nearly 50,000 composers, was asking it to pay "many, many times" more than the previous licensing agreement that expired.
"The costs are simply prohibitive for us – under PRS's proposed terms, we would lose significant amounts of money with every playback," the company said.
The move is the latest sign of the tension between YouTube and the music industry.
It also indicates that YouTube is resolving to keep operating costs under control as it strives to generate profits for owner Google.
YouTube said PRS was unclear about which songs would be included in the renewed license.
"We've been talking to them for a long time and we're still talking to them," said Patrick Walker, YouTube director of video partnerships for Europe, Middle East and Africa.
al of Sydney Mr Walker described it as a "painful decision".
But PRS disputed YouTube's version of events and said it was caught by surprise by the announcement in the middle of ongoing negotiations.
"We were shocked and disappointed to receive a call late this afternoon informing us of Google's drastic action," said PRS for Music chief executive Steve Porter.
PRS said in a statement it was "outraged" on behalf of consumers and songwriters by YouTube's move.
"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," the London-based organisation said.
The PRS statement pointed out that Google saw its revenue grow to $US5.7 billion ($9 billion) in the last quarter. The figure will likely be juxtaposed against the fast dwindling fortunes of the music industry.
Some rights-holders argue YouTube should pay a higher fee or share more advertising revenue since many users come to watch their music videos.
The deal between YouTube and PRS is separate from YouTube's relationships with major record companies, which have also been strained at times.
YouTube and the music industry have had an awkward but mutually beneficial partnership.
On one hand, label executives acknowledge that the popular video site is the way many people discover new music, especially as the power of radio and MTV wanes.
But with the industry seeing plunging CD sales, the labels hope that YouTube will also serve as a key revenue source.
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