Media Law Prof Blog

Editor: Christine A. Corcos
Louisiana State Univ.

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Tuesday, March 10, 2009

Google, PRS Negotiations Over Licensing Break Down

Google and the (British) Performing Rights Society for Music have been unable to come to an agreement concerning licensing fees. As a result, YouTube is yanking popular videos from labels such as EMI, Warner, and Sony as well as smaller companies from its site. PRS, anticipating the disappointment if not anger of users, is saying that it has not told YouTube to do so. Read more here. Here is part of the PRS's statement from its website.

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.

Here's part of a statement from YouTube.

Our previous license 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 license 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 license, 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.

The Guardian notes that MySpace users as well as other third parties, such as Pandora, could be or are already affected.

http://lawprofessors.typepad.com/media_law_prof_blog/2009/03/google-prs-nego.html

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