Youtube is blocking access to all premium music videos that were previously available to UK internet users, after failing to reach a licensing deal with the Performing Rights Society (PRS). The BBC reports that “thousands” of music videos were suddenly gone starting late March 9th, punishing UK consumers for the lack of an agreement.

Patrick Walker, YouTube’s director of video partnerships said that the dealings need to move “at a rate which is sustainable to all”. But a statement issued by video hosting rival’s managing director, Mark French, heavily criticized YouTube’s managerial qualities by saying that:

“[YouTube's business] model doesn’t support paying the current PRS rates let alone the payment to artists, because they cannot command high enough advertising rates.”

However strong the company’s advertising rates are, Patrick Walker affirms that YouTube “cannot be expected to engage in a business in which it loses money every time a music video is played,” and so the deal with one of the largest royalty collection societies in the UK is off. The PRS even asked YouTube to reconsider, but at the same time won’t back down from the price they’re asking for.

So it’s a standoff, Google YouTube  isn’t going to pay the PRS’s high fee’s, and the PRS won’t accept a penny less. In the end, who gets penalized? The videos will be unavailable for the next two days, or perhaps until a deal is hammered out, even though both parties committed to sealing an agreement soon.

Who is right? Can the PRS charge per video played? Is YouTube in financial trouble?

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Source: BBC