HOWZAT

YouTube said it was taking a stand on behalf of online music streaming services. "The terms that have come up are economically unsustainable, not only for us but for the industry as a whole," Mr Walker told The Times. YouTube said it had to take into account the cost of streaming the videos on such a large scale.

PRS for Music represents music writers, composers and publishers, bringing together two royalty collection societies, MCPS and PRS. It collects and pays royalties to its members when their music is recorded onto any format and distributed to the public, performed or played in public, broadcast or made publicly available online. Both royalty organisations are "not for profit" and only deduct a administration/commission fee to cover operating costs.

YouTube also said that PRS for Music had been unwilling to set out which artists were included in the new licensing deal. Up until recently, all music and lyric royalties were collected by one body but a change in the rules allows artists to nominate other bodies to do it. "PRS is unwilling to tell us what songs are included in the licence they can provide so that we can identify those works on YouTube - that's like asking a consumer to buy a blank CD without knowing what musicians are on it," Mr Walker said.

Andrew Shaw, managing director of PRS for Music broadcast and online, added that because the number of people viewing music videos has increased "exponentially" on YouTube, it meant that the 60,000 songwriters and others it represented were being paid much less per viewing under the old licence fee. He said that this was the reason why PRS was seeking a large rise in the license fee. He said whether this would be a lump sum or on a per-play basis was part of the negotiation.

"As more users have gone to YouTube, our members are being paid less for their music. The music does have an intrinsic value and this has to be recognised," he said.

He accused Google of staging a publicity stunt with today's announcement.

"Negotiations had been continuing since the start of the year when the licence agreement ran out. I regret that that has been diverted by playing this out in public," he said. He pointed out that previously the PRS had been flexible with YouTube and had agreed a retrospective licence with the company for the first 18 months of its operation when it did not have any sort of licence in place.

Services such as Pandora.com, MySpace UK and Imeem have also had issues securing licence deals in the UK in the last 12 months.

Google, which bought YouTube for $1.65 billion in 2006, has been seeking ways to improve revenue from its hugely popular site.

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