Tuesday, March 10, 2009

PRS v Google: Round-up

Much, much more scattering of reaction from around the world to Google's decision to pull music videos off YouTube.

First up, Helienne Lindvall called for us to think about the songwriters:

[A]s a songwriter myself, I can tell you that most songwriters haven't seen any income from YouTube at all, since a music video has to be viewed hundreds of thousands of time, to take it over the required threshold where you even get a payment. I've been told that videos by Coldplay and similar acts would make a couple of hundred pounds, at most, for getting millions of hits on a single video.

To which the obvious response is: well, yes - but where do you think the money is going to come from? There isn't a great deal of money in the expensive business of pumping video across the internet; any visitor to YouTube would attest that it's hardly a site swimming in high-quality advertisements. Perhaps the reason why the artists don't get much money is because that's all there is.

Indeed, this is the problem - nobody who controls music seems to be able to grasp that an individual song is worth considerably, considerably less in a multi-digital environment than it would have been when music lived on vinyl discs and a handful of radio stations. And you can't simply wish the price back up.
Another point that Google has failed to address is that a large part of the content they have or plan to take down is music written by people who are not covered by the PRS.

Yes, that's awful. But the PRS seems reluctant to actually do anything to stop that happening, doesn't it, Helienne?
Google wants the PRS to give them a list of who they represent and what songs and then Google will pay those composers if they get enough hits. The PRS want Google to give them the data of all that is being streamed on their site, and then they'll tell Google which songs are covered by the PRS.

If the PRS won't tell Google who it represents, then Google are going to have to guess?

Lindvall also argues that Google didn't have to take the music down:
The PRS has been in negotiations with sites like MySpace for years and never blocked them from using music while the negotiations are ongoing. My guess is that Google are trying to force PRS's hand by taking down all this content and trying to portray them as greedy and backwards thinking. A shrewd move, as they've gagged the collection society from revealing the real facts and details of the, no doubt, paltry deal that is on offer.

Well, yes. But then Google aren't obliged to pay the promotional and distribution costs of major labels, and if the PRS believes that Google is grievously underpaying for tracks on YouTube, surely it should be delighted that the people it represents are no longer being ripped off? It seems a little strange to claim that someone is robbing you blind, and then complain that they've stopped robbing you blind.

Of course, Google is not a plucky little David and is using the YouTube wipe out to make a point. But the PRS seems surprised that someone should call its bluff, as if there's something wrong at saying "we can't agree, let's just not bother."

Last FM are hoping to bang some heads together. Martin Stiksel knows that the end result if there isn't a quick resolution isn't going to be pretty for the PRS:
"We have to find commercially workable rates otherwise illegal services will win and take over," he said.

The suggestion that it's Google being greedy has taken another knock, with Jemima Kiss in the Guardian reporting that MySpace might be in a similar position:
MySpace UK and other sites are struggling to renegotiate their own licences with PRS, which pays royalties to artists.

One source close to the negotiations said that the launch of MySpace UK's comprehensive music service later this year could be thrown into jeopardy unless it secured an economically viable licence with PRS.

"A lot of service providers are negotiating and renewing licences with PRS right now, but the rates are widely known to be uneconomical," said the source. "Nobody could run an online business on those terms."

The report claims that the PRS is looking for rates based on the 2007 Copyright tribunal rates [pdf], at figures which make advertising-supported services unsustainable.


carlos666 said...

I accept that people would prefer to get their music for free rather than pay for it. but why support a huge corporation at the expense of musicians & producers?

Google is 25 x the size of PRS, and profits substantially from music but doesn't want to pay a fair price for the music its uses, whilst ensuring google investors are well rewarded.

In 2008 google who own youtube grossed £15bn ($22bn) and made profit of £9bn ($13bn), against 2007 figures for PRS who collected £607M (from all sources of income, of which youtube is a very small part) and distributed £540M? to songwriters 90% of who receive less that £5000 each.

PRS currently gets about 0.0004p per view on You Tube.

Why should musician, artists and producers further subsidise youtube/google startup costs while Google rakes in huge profit from its legal tho badly paid use of music and also profits from music copyright infringement in a variety of ways including e.g. placing google ads on illegal music download & lyric sites, which are amongst the most popular sites on the internet.

Simon Hayes Budgen said...

Hi Carlos,

Couple of things:

Google doesn't want to give people money for free; the YouTube model is to recompense artists and songwriters from advertising revenues. You're confusing 'free to view' with 'unpaid for'.

The relative sizes of Google and PRS are a bit meaningless - Google is an international search and advertising company which operates in around 150 countries; PRS only exists to collect and distribute royalties in one nation. If anything, it's surprising it only needs to be 1/25th size of Google to do that.

Comparing the income of Google and PRS is equally meaningless - most of Google's income comes from search and advertising. It's like a farmer insisting he gets paid more than his eggs are worth by the village shop because he wants to be recompensed from the money they make from putting 'for sale' cards in the window and selling ice lollies.

YouTube doesn't make a lot of money - and remember it's not only hosting music, it hosts 80% non-music material. It's simply not true to say that Google "profits substantially" from music.

0.0004p might not sound like much.

But if a record gets played on Radio One, it gets about £18 a minute, top whack.

Sounds a lot more.

But Radio One's biggest audience is 7.3 million. If you reckon that the average pop song is three minutes long, the payment per track per listener (equivalent to a single view on YouTube) works out at about 0.0007p.

Not sure what your point is about Google Ads appearing on third party websites which host unlicensed material. YouTube should pay higher rates because other people are, unknown to Google, using a different service to make money from unlicensed music? Or that Google should do more to close them down?

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