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Image by futureshape via FlickrDigital music is the future of the recording industry but sometimes you wonder if we'll make it to the future with all of the fighting that takes place over licensing.

The online music market is no stranger to disputes and the latest is resulting in premium music videos on YouTube being turned off for UK users.

Thanks to the inability of YouTube and the Performing Right Society (PRS) to reach an agreement, thousands of music videos on YouTube are unavailable or will soon become unavailable in the UK.

As usual, both parties are blaming each other, which YouTube calling the situation "regrettable" and the Performing Right Society claiming to be "outraged... shocked and disappointed".

According to the PRS, YouTube was offering to pay far less to songwriters and composers than it has been. The PRS felt that this was especially unfair since YouTube has only grown in popularity and should thus be making more money according to the PRS' logic.

YouTube, on the other hand, said that the PRS was asking for a "prohibitive" increase in royalties that put YouTube at a loss for every music video streamed. YouTube also complained that it was unclear who the new agreement would cover.

So who's to blame?

As is probably obvious to everybody these days: both parties. Members of the recording industry can't come to terms with the idea that 'fair' is relative and that the 'fair' of the pre-digital era may not be the same as 'fair' today. The economics of the business have changed and whether it's fair or not is beside the point. Pragmatism is required.

At the same time, Google's comment that "by setting rates that don't allow new business models to flourish, nobody wins" really translates to "we still haven't figured out how to make money from YouTube". YouTube can't expect that rights holders are forever going to peg the value of their licensing rights to whatever price gives YouTube the ability to profit.

Stuck in the middle of this tug of war is the consumer, of course. Unfortunately the situation highlights the fact that despite all the progress that has been made in the online music space, the parties who can make or break the market haven't really come that far.

UK users won't be able to access premium music videos for x hours or days and the PRS and YouTube will come to some sort of agreement, begging the question: "why couldn't you guys have just worked it out in the first place?" Maybe one of these days we'll find an answer.

[Image by futureshape via Flickr. Some rights reserved.]

Patricio Robles

Published 10 March, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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