Music videos are among the most popular clips on YouTube but the battle to keep them there is getting more and more contentious. Back in December, faced with failing licensing negotiations, Warner Music, pulled its programming off of the site. Monday, it was Google playing the role of the aggressor. The company took a hard-line stance with the UK’s royalty collecting body.
Acknowledging the decision would be a “significant disappointment,” Google said it had little choice. The previous license had expired and the parties were “unable so far to come to an agreement to renew it on terms that are economically sustainable.”
PRS for Music was asking for royalties that would cause Google to lose money every time a music video is played on the site, Google said.
In a statement, PRS for Music challenged that characterization. The group said it was “outraged” and that “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.”
It’s unclear how long the videos will be inaccessible.
To recap the issues from prior Metue coverage:
On one side, lies YouTube. Explosive in audience growth, the site has become one of the five largest websites and the second largest search engine in the world. On the other side, sit the content owners. It is on their backs, that YouTube has grown. These licensors know a distribution platform is no good without desirable content and they want to be recognized and compensated for the contribution.
The problem is YouTube’s audience growth rate exceeds its revenue growth. The monetization of online video, especially short form (as opposed to full length television programming or movies) , is still evolving.
That may be OK for Google because the company is better positioned to take a long view with the video site. Compared to content owners, Google can afford to emphasize audience growth now and work toward extracting return on the investment later.
Content owners, in contrast, have a different timeline and agenda. From their standpoint, it seems, passive marketing benefits, the indirect rewards they reap in audience exposure, aren’t enough. They don’t want to watch YouTube continue to grow without receiving sufficient compensation (as they define it) for what they’re contributing, especially given YouTube stands to only gain more and more negotiating leverage as it grows.
YouTube says the big money isn’t there to share. Content owners want to be paid for the growth they’re helping to fuel. Negotiating, the two sides have yet to find a way to meet in the middle.
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