We have invested a lot of time and effort trying to ensure that our community can find and enjoy the music they love, and we have strong partnerships with three of the four largest record labels in the world, as well as many independent labels. But copyrights in music can get pretty complicated. For example, there may be several different copyrights in a single music video, controlled by different organizations with different interests. The visual elements and the sound recording of a music video are typically owned by a record label, while the music and lyrics of the song being performed are owned separately by one or more music publishers. These publishers often designate organizations called collecting societies to issue licenses and collect royalties on their behalf. In the UK we've had a license from the collecting society called PRS for Music to make music videos provided by our record label partners available to our users in the UK.



Our previous license from PRS for Music has expired, and we've been unable so far to come to an agreement to renew it on terms that are economically sustainable for us. There are two obstacles in these negotiations: prohibitive licensing fees and lack of transparency. We value the creativity of musicians and songwriters and have worked hard with rights-holders to generate significant online revenue for them and to respect copyright. But PRS is now asking us to pay many, many times more for our license than before. The costs are simply prohibitive for us -- under PRS's proposed terms we would lose significant amounts of money with every playback. In addition, PRS is unwilling to tell us what songs are included in the license they can provide so that we can identify those works on YouTube -- that's like asking a consumer to buy an unmarked CD without knowing what musicians are on it.



We're still working with PRS for Music in an effort to reach mutually acceptable terms for a new license, but until we do so we will be blocking premium music videos in the UK that have been supplied or claimed by record labels. This was a painful decision, and we know the significant disappointment it will cause within the UK. And to be clear, this is not an issue with the record labels, with most of whom we have strong relationships.



While negotiations continue, we'll still be working to create more ways to compensate musicians and other rights-holders on YouTube. In addition to various advertising options, we recently introduced a click-to-buy feature that enables fans to purchase downloads of their favorite songs. We're also proud of our Content ID tools that help rights owners identify their content and even use the power of our community to increase advertising and revenue potential.



We will continue to seek partnerships that benefit our community, music publishers, music labels and, of course, musicians and songwriters, and we will work hard with anybody who shares this commitment. We hope that professional music videos will soon be back on YouTube for our users in the UK to enjoy, and if and when that time comes, you can be sure that you'll be the first to know.


Yours,

Patrick Walker

Director of Video Partnerships, Europe, Middle East and Africa