Fight Over YouTube Videos Heats Up In The UK; Musician Propaganda Begins

from the you're-about-to-learn-what-leverage-is dept

Wed, Mar 11th 2009 9:31am — Mike Masnick

The decision earlier this week by Google to block music videos in the UK has certainly kicked off quite the firestorm of discussions within the music industry -- and an awful lot of whining about how it's "just not fair." Not surprisingly, the PRS folks have dragged out some musicians to kick and scream about how Google makes sooooooo much money, so why aren't they sharing? It's the same economically clueless argument that the newspapers have been using against Google. However, as Google pointed out, they are looking to share. The offer they made to PRS was to give them a significant portion of whatever ad revenue can be generated on those videos. PRS wants more than that, such that every music play would cost Google significantly more than it made.

It is, perhaps, no surprise at all, that one of the major complainers on the musician side is Billy Bragg -- who's been quick to make these sorts of ridiculous arguments in the past as well, and whose manager, Peter Jenner, is equally unable to understand basic economics. The problem is that they think that the world owes them money after the fact. They both refuse to come up with decent business models, and then complain when others do -- and demand that those other innovators simply have to pay up.

It's the same story we hear over and over again. Folks in the entertainment industry insist that 100% (or perhaps 99%) of the value comes from the content itself -- and refuse to recognize that any of the value comes from the technology, the service or the community of folks using those services. However, their own actions show how wrong that is. If it's true that Google is "underpaying" the artists, shouldn't the artists be HAPPY that Google took down their content? After all, according to what some of these artists and record labels insist, wasn't Google "stealing" from them? So, now that Google has stopped, doesn't that mean they're better off?

No?

The very fact that the musicians are so up in arms shows how much more leverage Google has. It shows that a significant part of the value is in YouTube. YouTube can survive just fine without the music videos. The musicians, on the other hand, are suffering. That's why it's the musicians complaining. But that shows the very point Google is trying to make: Google has the leverage here, not the musicians. And, yet, the musicians still want to pretend it's the other way around.

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Filed Under: billy bragg, music, music videos, uk
Companies: google, prs, youtube

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Anonymous Coward, 11 Mar 2009 @ 9:40am

I say, let them continue to pretend they have leverage, as they fade into obscurity. Google should do this to every other greedy asswipe group that wants a handout. Microsoft makes shitloads of money too -- why doesn't the PRS think they should share? And how does "You give us 150% of what you make" equate to "sharing?"
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Avatar28, 11 Mar 2009 @ 9:45am

best solution?
Ignore them. It's not like they can sue because Google stopped offering the music videos over there. Well, I suppose they COULD sue but I don't think they would have much in the way of legal ground to stand on, "Your honor, they make lots of money. We think they need to give us some of it just because."
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Avatar28, 11 Mar 2009 @ 9:47am

best solution?
Ignore them. It's not like they can sue because Google stopped offering the music videos over there. Well, I suppose th
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Paul, 11 Mar 2009 @ 9:53am

Royalties
If the Performing Rights Society think that a business can be profitable paying the amount they are demanding then they should set up their own web site. That would prove things one way or the other.
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ChurchHatesTucker (profile), 11 Mar 2009 @ 10:00am

Link?
Shouldn't there be a link to current UK musicians complaining about the labels?

Anyhoo, is the PRS one of those agencies that collect 'on your behalf' whether you want them to or not? Because this would seem to be a golden opportunity for indie UK artists.

Also, I am endlessly amused at Bragg's money-grubbing.
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Avatar28, 11 Mar 2009 @ 10:01am

By ignore them, I mean they should do exactly what they did. Cut them off and let them suffer. Treat them like a whiny 18 year old still living at home, "You don't like living by our rules? Fine, you can move out then and try to make it on your own." Eventually they'll beg to come back home and have their room back.

Here's how I see it shaking out. PRS whines and complains about it but can't do much about it. They will try to start their own video site for music videos. They'll completely screw it up (like usual) and get no traffic (like usual) and generally be a laughing stock (again, like every other attempt by the entertainment companies to "embrace" the web). Eventually they'll give up, shut down the site and come crawling back to Google begging to be let back in.

Google should do the same thing with all the newspapers complaining and threatening to sue for having the audacity to link to them. "You don't want our traffic? Fine. We'll pull you off. We'll pull you COMPLETELY off." Take them off of Google News and for good measure, go ahead and pull them out of the main Google search index as well. We wouldn't want to accidentally send them any traffic and upset them after all. See how happy they are when they get NO traffic from Google at all. No news traffic and no search engine traffic. Even if they come back begging to be readded, make them sweat it out for awhile.
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Matt, 11 Mar 2009 @ 10:21am

billy corgan?
what about the billy corgan/smashing pumpkins cashgrab? From the same guy who said he'd never be a sellout.
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BenUrsa, 11 Mar 2009 @ 10:48am

Artists vs Labels vs Performing Rights Society
Of course most of this is posturing, but I think Techdirt is missing the point of the "Featured Artist Coalition".

The artist(s) get only a fraction of the revenue. The Labels and groups like PRS take a sizable share of the money before the artist sees a penny. Unfortunately most of these artists signed contracts that completely turned over the rights to the music to the Labels. When you are unknown and broke "the record company gave me a big advance" seems like a huge success. 35 to 50 years later when the music is still extremely popular and you are getting a tiny fraction of the revenue the "big advance" probably seems unfair.

As Techdirt is fond of saying a new business model is needed. A new business model works only for artists who did not sign a contract that gave away the rights.
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claire w, 11 Mar 2009 @ 10:55am

artists v labels
I think youll find that the musicians are actually saying that whilst they dont mind the likes of youtube showing their videos what they are complaining about is the fact that record companies have been given shares in such companies and are doing deals which profit them without paying the musicians ... and this is of no benefit to the music creators or their fans...You shouldnt be so quick to judge Billy Bragg et al after all it was dave rowntree who campaigned against drm and said hed rather it gushed , when Blur tracks were leaked on line...
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wtf mate, 11 Mar 2009 @ 10:59am

"Google makes sooooooo much money, so why aren't they sharing?"

Seriously? Would that argument have worked against the RIAA all these years? What a joke!
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Mike C, 11 Mar 2009 @ 11:04am

I wonder if ...
... the "music industry" will ever finally realize that they were NEVER in the business of selling music?

The way I see it, they were always in the business of selling ACCESS to music. Whether it was vinyl discs, shiny plastic discs or a series of 1's and 0's, they had the original infrastructure to be able to get the creative "product" from point A (the musician) to point B (the listener). Unfortunately for them, the musicians now have many alternatives that don't need to include that infrastructure. Gone are the days where an artist MUST have a contract to get their music into a portable format so that it can be sold to a consumer. As Mike has said time and time again, they really need to take a hard look at what it is they actually do and find new ways to monetize that.

As for this particular fiasco, I wonder how long it will take the PRS to try to take Google to court? Given the past behavior of the music industry, I wouldn't put it past them!
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Anonymous Coward, 11 Mar 2009 @ 11:04am

"The offer they made to PRS was to give them a significant portion of whatever..." since you've no clue what proportion they offered that's just bias.

"... Billy Bragg -- who's been quick to make these sorts of ridiculous arguments..." actually he hasn't said anything ridiculous - you should try actually reading what he said and not just assume you already know what he's going to say before he says it.

"They both refuse to come up with decent business models, .." except that Billy's been making his living in the music business for a lot longer than Masnick has been blogging about it, and therefore has demonstrated a lot more successful business model that anything Masnick blogged about.

"Folks in the entertainment industry insist that 100% (or perhaps 99%) of the value comes from the content itself.." the usual Masnick trick of making up statistics to support your whining.

If you made a genuine effort to understand what is going on in the industry you wouldn't need to write such garbage - you could write something that actually makes a point.
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Weird Harold, 11 Mar 2009 @ 11:08am

This gives me a great business idea. I am going to open a delivery company, and GM can give me trucks for free and I will pay them a small percentage of my net profits each week. So if I don't happen to make any money, they won't get paid. Same thing for my license plates, insurance, and fuel.

Mike, you try to hard to stretch stuff to make your point, either you are angling for a book deal or public speaking using this crap must pay really, really well.
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Anonymous Coward, 11 Mar 2009 @ 11:13am

Re: best solution?
Pretty much sounds like Obama's policy.
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Anonymous Coward, 11 Mar 2009 @ 11:14am

Re: Re: best solution?
Referring to the last statement.
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mobiGeek, 11 Mar 2009 @ 11:16am

Re: billy corgan?
It is easy to say you'll never be a sellout when no one is currently offering you a load of money. In fact, it is likely a great bargaining chip to get a bigger load offered.

Then, let me say this here and now: I will never be a sellout. EVER.

You know where to reach my people.
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Anonymous Coward, 11 Mar 2009 @ 11:19am

Re:
So when GM complains, they can take their trucks back and keep them. What's the problem? I'm having a hard time understanding.

The music industry has run up on a digital distribution monopoly in google. They have a monopoly on content. Google has the monopoly on distribution. They aren't in control and they complain. They need google more. It's so simple.
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Anonymous Coward, 11 Mar 2009 @ 11:23am

He used to make money in the music business
>>"They both refuse to come up with decent business models, .." except that Billy's been making his living in the music business for a lot longer than Masnick has been blogging about it, and therefore has demonstrated a lot more successful business model that anything Masnick blogged about.

He used to make money under a business model based on selling CD's at $15 a pop when people wanted one or two of the tracks. That business model doesn't work well anymore. Knowing how to make money in the past does not mean as much as knowing how to make money in the future. So far Billy's only solution to how to make money in the future is to return to the past.
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WarOtter (profile), 11 Mar 2009 @ 11:27am

Re:
Your argument fails quickly upon perusal of your example. GM makes a finite product: trucks. Your usage of said trucks as delivery vehicles is not inherently useful to GM as a marketing tool, that helps them sell MORE trucks than they would if you didn't have them.

Digital videos and music are more of an infinite resource, since they can be reproduced nearly infinitely with negligible resources. The dissemination of the data aids in the overall marketing of the bands behind the data, thus making their performance more value.

Long story short... you're dumb.
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mobiGeek, 11 Mar 2009 @ 11:29am

Re:
The point is quite clear, even if you take out all of the opinionated statements you point out above.

PRS demands more money for having their content on Google. Google decides it isn't worth it to them, so they pull all content. PRS now decides that was a bad decision and wants Google to put stuff back up, and force Google to pay more for the *service* it is providing to PRS: the promotion of artists' content.

YouTube will easily survive without the PRS content. The PRS content becomes a lot less accessible without YouTube.

So who is it that knows the business? Billy Bragg who is using a business model that is without a doubt in serious decline, or someone who simply points out the economic facts of the situation in this story?
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ChurchHatesTucker (profile), 11 Mar 2009 @ 11:48am

Re:
You know Harold, it might be more effective to just stop typing and use your fingers to plug up your ears whilst chanting the "Na Na Na I Can't HEAR YOOOOOU!" mantra over and over.

At this point, the RIAA et al. are fighting physics.
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y8, 11 Mar 2009 @ 11:50am

The next law suit against google
So next the PRS will claim that Google has a monopoly on distribution. I think someone here even said that in their comment. Then Google has an obligation to distribute the data (music), or they MUST be broken up to prevent Google's monopoly from destroying these poor musicians and their publishers.

Of course, the answer is that Google does not have any sort of monopoly. The internet is available for everyone to use. Google just does it better. And the PRS wants Google to share the wealth because Google has smart people.

The publishers are welcome to set up their own music/video sharing sites and sell advertising to pay for them. Or better yet, they can charge the public directly for access. I know I'm just chomping at the bit to pay for mediocre music and ego-centric videos.
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Anonymous Coward, 11 Mar 2009 @ 11:51am

Re:
He didn't try nearly as hard as you did to stretch stuff to make a point, and he didn't completely and utterly fail, as you did. Your analogy is so far-removed from the PRS/Google situation, it barely warrants this much comment.
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Your Mother, 11 Mar 2009 @ 12:09pm

Sweet! WarOtter
I'm no digital attorney; though it seems the very practical distribution and practically limitless supply of digital content being distributed, are what make any traditional model increasingly obsolete. I'm not saying what's fair or not, but your reply to Crazy Harold was a needed slap in the face to those who wish things were the way they use to be. Content creators/artist, SHOULD get something if they want it, directly or indirectly. But I see no real way a business/association using traditional distribution of any medium will survive; especially now that major players have already got the field. They should have invested in the technological future, not their money clips.
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ChurchHatesTucker (profile), 11 Mar 2009 @ 12:15pm

Re: Sweet! WarOtter
I'm not saying what's fair or not, but your reply to Crazy Harold was a needed slap in the face to those who wish things were the way they use to be.

It's not a matter of what's "fair" or not. It's a matter of acknowledging reality. If you can't do that, you're just crazy.

And/or, you're Weird Harold.
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Santiago Crespo, 11 Mar 2009 @ 12:16pm

Georestricting
A while back I wrote about big TV networks georestricting access to Hulu and other video sites because of licensing restrictions with their partners in other latitudes. What I don't understand is why would record companies do the same with official music videos. Sometimes you try to play something and a "This music video is unavailable in your location" sign appears. The solution is obviously to hit the "back" button and play another copy.
I thought the entire point of people creating music videos was to promote their music and sell more records. Why would they want to restrict people's access to their promotions?
If I think about it from my side of the business, it would be like telling an interested prospect I cannot send him brochures and white papers of my product because he is in Canada.
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SteveD, 11 Mar 2009 @ 12:24pm

Re: Link?
"Anyhoo, is the PRS one of those agencies that collect 'on your behalf' whether you want them to or not? Because this would seem to be a golden opportunity for indie UK artists."

Basically, yes. They argue that tracking what songs every licence-holder is playing would require huge resources, and take too much away from the fee's they can pay artists.

Instead they use statistical methods; tracking the playlists of all major broadcasters, and sample the playlists of smaller radio stations and club DJ playlists on random days, then use the data to build up a picture of what's being played round the country.

This works great if your a major act with plenty of airplay; the statistical method will likely pay you a very fair rate. But if your an indie band with only a handful of plays of a given song you'll likely fall through the cracks and see your share line the pockets of the majors.

I believe the PRS needs to be modernised. They're methods are antiquated, and their attitude that of a bully looking to shake the loose change from a schoolboys pockets.

The over-complexity of licensing and regulation also means no one is really sure who owes who what.
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Dave, 11 Mar 2009 @ 12:38pm

Re:
Actually, you start a delivery business yusing your own trucks, you deliver products on consignment and give the creators of the products a share.

Suddenly some of the manufacturers of the products ask for more than you can make from selling their products and still pay for gas and repairs and your own needs so you stop selling their products.

They complain that you aren't being fair and should be forced to sell their products. You point and laugh.
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Anonymous Coward, 11 Mar 2009 @ 12:48pm

Re:
That sounds awesome actually! Let me know when you figure how to build a car and make infinite copies of it for free.
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Anonymous Coward, 11 Mar 2009 @ 1:14pm

ummm, I though PRS represented the SONGWRITERS AND MUSIC WRITERS, which doesn't necessarily equate to the musicians and the labels at all, unless the musician is also the songwriter.

The musicians are complaining NOW because what's happened is that the disagreement between PRS and google means no play no pay for the musicians, even though (from my understanding) the PRS doesn't represent the musicians or the labels.
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uhmno, 11 Mar 2009 @ 1:16pm

Weird Harold, your line of thought and analogies are broken. Way to make yourself look less and less relevant with each new post.
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Rob R., 11 Mar 2009 @ 1:36pm

You go, Google! Keep it up!
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rjk, 11 Mar 2009 @ 2:05pm

Re:
@ Weird Harold

you example fails because it is confusing the content and the delivery mechanism.

YouTube supplies the delivery mechansim (the trucks)
PRS supplies the content (the products the trucks are hauling)

So using your example, it would be like GM (PRS) demanding a portion of your profits hauling GM parts/cars/trucks (videos) to their customers, because without their products you would have nothing to haul.
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Anonymous Coward, 11 Mar 2009 @ 3:35pm

Google - 1
Stupid whinging greedy music industry execs - 0
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Weird Harold, 11 Mar 2009 @ 5:41pm

Re: Re: Sweet! WarOtter
What's the reality? if you run a store and enough people are shoplifting, that you should just give everything else away too?

You have to go back to the root of the issue: Youtube has the eyeballs because they used everyone else's content for nothing, built a base of eyeballs, and now wants to come clean but underpay the rates that all other entertainment distributors pay. If YouTube was forced to stop their theiving ways (oh, sorry, I mean "accepting user submissions of unidentified musical and video content"), they would be out of business damn fast because they don't have a real business model to work from.

The sad fact is the music business makes more money when the content isn't online in digital formats getting toss around for "FREE!". Declining music industry income matches directly to the arrival of digital distribution (aka, Napster and the like), and has continued down hill since. The reason? I just have to ask anyone under 25, the answer is simple: Music has no value to them anymore, because they can download all they want for free. Many of them also download their TV shows online (minus the advertising) and most of them have seen all the latest movies but don't own a single DVD and never go to a theatre. They won't suddenly learn to pay money for any of this again any time soon.

So debating royalties is almost meaninless, because soon there won't be all that much music produced at a major level as to make it even worth worrying about. Then you call all watch videos of the garage band down the street doing cover versions of bruce springsteen reggaeton style.
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Weird Harold, 11 Mar 2009 @ 6:48pm

Re: Re:
In the end, it comes down to the same thing: I want someone to supply the basics of my business, without which my business can run, and I want to dictate the price to them for it for their product. I want them to discount it down way below what the rest of the market pays only because I am not so good at running a delivery business as they next guy.

If YouTube was a profitable business, this wouldn't be a discussion. YouTube wants content, but they don't like paying for it, because they still haven't figured out a really good way to make money with all those eyeballs.
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Weird Harold, 11 Mar 2009 @ 6:50pm

Re: Georestricting
Because they aren't selling more records, because records are now "FREE!" like everything else.

Reproduction fees aren't a new deal, MTV and radio stations always pay artists for their material. There is no reason why Youtube (just another delivery path) should be any different.
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Reboot the Gateway, 11 Mar 2009 @ 8:25pm

Harold,

The internet is not a big truck.
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Monarch, 11 Mar 2009 @ 9:08pm

Re: Re: Re:
@Weird Harold

So you think that YouTube should pay for content that isn't making them any money in the first place is the way to go? Is it not more financially feasible for YouTube to just stop providing the content that isn't making them any money, than to pay for it?

Hmmm, Weird Harold, I think you need to pick up a book on economics. Is there an "Economics for Dummies" book out there?
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Anonymous Coward, 11 Mar 2009 @ 9:24pm

Re: Re: Re: Sweet! WarOtter
Hey Sweet! WarOtter,

Music sales were on a decline prior to digital distribution and actually were making a comeback during the Napster years. And guess what? The people buying the most music were the ones sharing it over the P2P networks.

Oh and guess what else, the majority of people that go the movie theaters are the under 25 group that also download the movies. Oh, and guess what? The CD sales have gone down but digital sales have gone up. And guess who buys the most digital music, the under 25 crowd!

The problem is, the under 25 crowd only has so much disposable income. Divide it between, movies, video games, music and the like, they can only afford so much, and the rest they get from P2P. But it is the ones that pirate the most, who also purchase the most entertainment goods.
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Anonymous Coward, 11 Mar 2009 @ 9:28pm

Re: Re: Georestricting
Wierd Harold, just give it up.

MTV didn't use to pay the artists for the music videos. The music videos were actually used as commercials for the bands. MTV quit playing music videos very often, sometime after they had to start paying royalties to play them.
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Anonymous Coward, 12 Mar 2009 @ 4:24am

Re: Re: best solution?
What the hell does that even have to do with anything that's being talked about? EVERY politician wants money just because.
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Avatar28, 12 Mar 2009 @ 7:42am

re: Harold
Harold, I don't think anyone is necessarily arguing that the labels shouldn't get paid at all. Google offered to split any money they make with them. The problem and the whole point of the thing is that the PRS insisted that Google give them more money than they are making from them. So if Google could make, say, $1,000,000/yr from the videos and the PRS insists that Google should pay them $3,000,000/yr instead. And that doesn't even count what Google has to pay out for overhead like electricity and bandwidth or what they pay to the labels as well. I see no reason that Google should take a bath or be forced to agree to their terms.

Let's say that you're playing a game with some other people at your house. Each of the people has to be there in order for the game to take place. One of the people decides that if they are going to play that you have to meet some onerous demands that would make the game not fun for you. You are well within your rights to decide you don't want to play anymore and tell the other people to pack up their shit and go home.
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nasch, 12 Mar 2009 @ 8:07am

Re: Re: Re:
I want someone to supply the basics of my business, without which my business can run, and I want to dictate the price to them for it for their product. I want them to discount it down way below what the rest of the market pays only because I am not so good at running a delivery business as they next guy.

That's exactly right, except you seem to have it completely backwards:

PRS wants someone to supply the basics of their business (distributing music), without which their business cannot run, and PRS wants to dictate the price to them for it for their product. PRS wants them to inflate it way up above what the rest of the market pays only because they are not so good at running a delivery business as the next guy.
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Weird Harold, 12 Mar 2009 @ 11:58am

Re: Re: Re: Re:
PRS wants them to pay what the market pays.

YouTube shouldn't get a free ride on anything. They want to play a video, they should pay the going rate. I don't get to tell the bus company what my fare will be based on what I earn at work, so why should youtube be able to dictate to PRS based on what youtube is making?

The price is there, do it or don't, and if your business model can't support the price, then GET A NEW BUSINESS MODEL.

It is absolutely the stupidest thing around here reading all these posts that the "music labels need a new business model". It's horsecrap at it's finest. What you are all saying is that all the web2.0 style businesses are failures, but they want to transfer that failure off to the record companies until their business model works.

When it comes right down to it, youtube fails massively, loses money like bottomless pail, and you want the record industry to suffer as a result.

Mike will put it in nicer words, but that is the general concept here.
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MattP, 12 Mar 2009 @ 1:45pm

Re: Re: Re: Re: Re:
"The price is there, do it or don't, and if your business model can't support the price, then GET A NEW BUSINESS MODEL."

Which is exactly what Google did by giving them the proverbial finger.
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Mike (profile), 12 Mar 2009 @ 2:20pm

Re: Re: Re: Re: Re:
YouTube shouldn't get a free ride on anything. They want to play a video, they should pay the going rate.

Actually, you seem confused. Google seems quite content not to play the videos at all. Music videos are a nice to have for Google, but a need to have for artists these days.

The ones who want them on there are the artists.

This is what it means to discover who actually has leverage.
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mobiGeek, 13 Mar 2009 @ 8:22am

Re: Re: Re: Re: Re:
PRS wants them to pay what the market pays.

What market? Who else is in the market that YouTube is in that is paying the "market price"?
Please define this "market" you think YouTube fits into.
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StanTontas, 7 Apr 2009 @ 7:05am

Google == RIAA
What utter crap. People use YouTube like a jukebox these days. If YouTube/Google can't make money out of that, why the hell should artists take a paycut or give their product to the world's biggest advertising company for free?

Google's plan here (Apple's at it too) is to replace the major labels as the ones making huge profits off the backs of artists. They even have the same option to use creative accounting (where does that ad revenue get counted?) to make it look like there's no profit there to share with an artist.

And you chumps are supporting this?
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