Youtube and PRS

I know this is more of a music post than a startup one, but I'm angry. For those of you who are unaware, Google (specifically YouTube) and PRS are having a scrap. PRS is the Performing Rights Society and they collect royalties for musicians. They want Google to pay for each viewing of a music video and Google believe that PRS is charging too high a price. In this post I will tell you why both parties are being unaccommodating, why that's a bad thing, what the future will hold and hopefully suggest a positive solution (which I am aware will probably be ignored).

So, Google say they can't afford it. They approximately make $5 Billion (£3.65 billion) every 3 months, but YouTube is still their loss leader. If you've been noticing, on many music videos, a "buy on itunes" logo has popped up alongside other adverts so this obviously means that either Apple is paying Google for the service like an advert or Google makes money from each song sold by a click. I'm assuming the former but I may be wrong. Now some of these videos reach millions of views (were talking 10 + million) and some, only a few thousand. However I've clearly shown that Google is making money from these artists.

PRS wants what's best for it's performers and this is understandable so they want a chunk of revenue each time someone views a video. However, unless someone actually clicks on an advert, Google will make no money, so this seems unreasonable. PRS though are right to not trust Google which I am sure would do some "creative calculation" were this on a per click basis. Again though, only the larger artists would actually have enough people clicking to generate any semblance of money.

To a large part, PRS is suffering from 20th century thinking. 1 Play = bit of money. This is done on the assumption that each play helps the venue, movie etc increase their revenue. This is true in an offline world. The online marketplace has changed everything. With the advent of services like last.fm, spotify and of course YouTube, consumers now expect more for free. Realistically, even though it's not ideal, PRS should try and make google do more of its advertsing on offical videos, take down the pirate versions and do a similar scheme as Adsense so that musicians get paid when Google does.

Even with this scheme, the amount performers will receive is minimal. Instead, what is happening and has been happening for the past few years is that live entertainment is returning. Recording singles and albums are mere elaborate mechanisms to get people to part with their cash when going to an arena tour and buying tons of other merchandise.

We all have to work harder, but one thing's for sure. From a creative perspective, we're living in interesting times.