YouTube reaches UK music video deal

Nine months after thousands of music videos disappeared from music website YouTube, it has agreed on a licensing a deal until 2012 with the PRS for music - the body which represents songwriters and composers, collecting royalties on their behalf. The issue at the heart of the dispute was the size of the royalties being paid each time a video was watched on the site.

YouTube - owned by Google - had a previous deal with the PRS, which expired in January, since when it has not been possible to view more than 10,000 music videos in the UK. The site is thought to be paying a lump sum for the three-year period, in a departure from the pay-per-view model, which will alow videos by labels like Universal and EMI to be shown.

Initially PRS had offered the site a deal comprising 0.22p per video played or eight per cent of its music revenues in the UK, however the lump sum deal was eventually agreed, thought to run into tens of millions of pounds. The PRS has already reached deals with other music sites like Spotify.

Patrick Walker, director of video partnerships at YouTube said of the accord "We set out to find a way to secure terms that were satisfactory to everyone. We fully support compensation for those in the creative process. It has taken a while but the result is a win-win-win situation; for us, the writers and the consumers."

As well as the music videos, there will be a selection of new material stemming from a number of partnerships with other record labels and guest editors like Tinchy Stryder and Florence and the Machine.

WHAT THEY ARE SAYING:Analyst Mark Mulligan, vice-president of Forrester Research, in the Guardian: "We are in a period of transition, and traditional business models are being reassessed. The position of the record labels is inherently weaker because of the falling value of recorded music and that gives the other people in the equation, including artists, managers and producers, more power. What we are seeing here is those players flexing their muscles, which is only possible because the record labels are weakening."

Yinka Adegoke on Reuters: "The fallout between YouTube and the UK's PRS was a sign of a rising tension between the popular site and some facets of the music industry. It also highlighted the video site's resolve to keep operating costs under control as it tries to generate profits for Google." ·