YouTube Signs Deal with UK Musicians

After more than nine months of bitter wrangling, YouTube has agreed a licensing deal with British songwriters that will see thousands of music videos return to the online video site.

YouTube, owned by the search engine giant Google, yesterday announced it had secured an agreement with the PRS for Music, the body that collects royalties on behalf of songwriters, composers and music publishers, over the size of the royalties for every video viewed. It runs in the UK until 2012.

The companies declined to reveal the terms of the deal, but it emerged YouTube has agreed to pay a lump sum as part of the agreement.

The two sides have been at loggerheads since January, when the previous licence expired. The failure to agree a price – PRS said YouTube wanted to pay "significantly less", while the video site said the PRS's proposal was unsustainable – saw YouTube block more than 10,000 premium music videos related to PRS members to viewers in the UK in March. It said at the time that the move was a "painful decision".

Patrick Walker, YouTube's director of video partnerships, said: "We had been working to reach an agreement. We hit a bit of an impasse and the videos were removed, but discussions were ongoing throughout that time."

Yesterday's deal sees those premium music videos reinstated in the UK from labels including Universal, Sony and EMI, as well as independents such as Ministry of Sound. The agreement will be backdated to January, and the 60,000 musicians represented will be paid when their music is streamed.

"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," Mr Walker said.

YouTube is celebrating the deal with guest editors including Tinchy Stryder, Basshunter and Florence and the Machine, who will choose their favourite videos on the homepage.

Andrew Shaw, the broadcast and online managing director at PRS, said: "It was regrettable that the videos came down. Clearly YouTube is a destination people are used to seeing music on, but it was important there was a mechanism where are members will be remunerated."

PRS was one of the first royalty bodies to sign a licence with YouTube in 2007. It is also in negotiations for a similar deal with MySpace Music.

Mr Walker said during the latest contract talks that the companies wanted new business models to help boost revenues over the internet. "It is important that neither of us stick our heads in the sand. We need to find models to help grow the industry and compensate artistic talent. No one wins if there is no agreement, but a suitable mechanism has to be reached," he said.

Separately, YouTube's parent, Google, has teamed up with Coolerbooks, a UK e-reader producer, to give it access to its Google Books archive, which has more than one million public domain titles. Coolerbooks is the first company outside of the U.S. to form such a partnership. A spokesman for Google said the company was in talks to increase the audience able to access its back catalogue.

    Before it's here, it's on the Bloomberg Terminal.