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Music videos pulled from YouTube UK as PRS negotiations break down

Nick | 10 Mar 2009, 09:51

Thousands of music videos have been withdrawn from YouTube in the UK this week, following the break down of negotiations with PRS for Music.

PRS for Music represents a community of 60,000 musicians, collecting a paying royalties for music that’s recorded, distributed, performed or broadcast. It has been in discussions with Google over the license fee it charges for YouTube to allow its users to stream music videos.

Techradar.com reports that PRS for Music has reacted angrily:

“Google has told us they are taking this step because they wish to pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing.

“This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties. PRS for Music has not requested Google to do this and urges them to reconsider their decision as a matter of urgency.“

The BBC reports that YouTube’s Director of Video Partnerships, Patrick Walker has described PRS for Music’s demands as"prohibitive”:

“The rate they are applying would mean we would lose significant amounts of money on every stream of a music video. It is not a reasonable rate to ask.“

YouTube’s decision is an indication of its negotating muscle in the UK market. It dominates the video streaming market globally and although it struggles in some markets (such as South Korea) against local competitors, in the UK it accounted for nearly half of the online video market in 2008.

With the collapse of Kangaroo, companies such as Microsoft, BSkyB, BT, Hulu and Joost believe this is an opportunity to challenge YouTube’s dominance.  Meanwhile the BBC has responded by developing plans for Project Canvas a platform described as Freeview Mark 2, which would deliver Hulu-style services via a set-top box, aggregating other broadcasters’ content.

Product placement and the creative industries

Nick | 09 Mar 2009, 09:00

In 2007, the world’s biggest advertiser, FMCG company Procter & Gamble started in-game advertising, partnering with Criterion Games to feature their brands in Burnout Paradise. They made the move after detailed research showed that not only was the medium one of the most effective ways to reach the young male consumer, but that players would accept brands in their games as long as the brand felt like it had a legitimate place in the world that had been created. After all, the gamers said, brands are virtually inescapable in real life, so their absence from a virtual world makes the game seem less real. The challenge is to integrate the brands seamlessly in the narrative.

This challenge is the same in TV and film. A television character walking in to a pub and asking for a pint of generic lager is one of the fastest ways to remind the viewer that these are just actors on a set. Yet few scenes in film history have jarred more than the scene in I Robot, when the camera lingers lovingly on Will Smith’s Converse trainers as he extols their virtues. Both approaches insult the viewers’ intelligence, but brands undoubtedly have a role in fiction, as they do in life.  Product placement also plays a key role in supporting the creative economy and is an industry worth $4.38 billion (2007) worldwide. With advertisers such as P&G forging partnerships with record labels and with writers such as Patricia Cornwell happy to engage in cross-promotion of another’s work, it’s clear that creatively and economically, product placement will have an increasingly important role to play in the creative economy.

It was with this trend in mind that Sir Michael Grade, Executive Chairman of ITV, wrote an article (following an announcement that the broadcaster would be shedding 600 jobs and disposing of a range of business units) in which he argued for a rethink on product placement regulations:

“And when the government could deregulate in line with the rest of Europe - say, on product placement - the secretary of state pre-empts his own consultation by saying he is opposed to UK broadcasters benefitting from this source of revenue. If this is consumer protection, why are US programmes containing product placement - Desperate Housewives and 24 to name but two - allowed on British screens at all?“

Product placement is already multi-billion dollar reality and it is at the heart of many new business models in the creative economy. How to balance the interests of the consumer with the interests of business on this issue will be a key challenge for c&binet to consider.

What Supernanny owes to the nanny state

Nick | 04 Mar 2009, 10:15

In a recent article about the success of UK television production companies in the US market, The Times’ media analyst Dan Sabbagh identifies a piece of regulatory engineering that has helped to kickstart the independent sector:

“Curiously, the emergence of Shed, RDF, and other British business talent in Hollywood stems from, of all things, a sensible bit of regulation. Improbable as it may seem, the Communications Act 2003 helped to make it possible for British creative entrepreneurs to start viable businesses abroad by establishing the simple principle that it was the producers, not the broadcasters, who owned the rights to a television programme. That allowed the “indies” to take them over to the US after they had proved a success on air back in Blighty. Helping further were quotas, which forced the BBC and ITV to take a proportion of independently made shows, following the example of Channel 4, where every programme is made by an independent company.“

He says that this change, combined with a US industry custom called “the defici systemt”, where independent production companies have to share the cost of production, in exchange for long-term revenue streams:

“That makes for a curious irony: British regulations helped British producers to invade Hollywood, while a lack of American regulation in this area has limited the ability of outsiders to break down the studio system.“

The article presents a dramatic illustration of the effect supply-side policies can have in shaping the growth of the creative industries. For c&binet, the question of how government policy can nurture the growth of world-class creative companies will be a key issue.

Pirate Bay awaits verdict

Nick | 04 Mar 2009, 08:06

With the verdict in the landmark trial of Pirate Bay creators due on April 17th, a Wired editorial suggests that whatever the outcome, the case represented a major blow for the intellectual arguments in support of illegal filesharing.

Pirate Bay is a Swedish-based site that facilitated illegal filesharing. The defendants in the 11-day trial - Frederik Neij, Carl Lundstom, Peter Sunde and Gottfrid Warg - are accused of promoting copyright infringement. In creating what the IFPI claimed during the trial was the number one source for illegally downloaded music worldwide, the four had become poster-boys for illegal-filesharers, famous for advocating a copyright-free “Kopimi lifestyle”.

But Wired writes:

“And when Gottfrid Svartholm Warg was confronted with his once-endearing habit of publicly ridiculing copyright owners foolish enough to send a takedown notice to Pirate Bay, you could hear the back-pedaling from across the Atlantic. “They still don’t understand that they have to write to the persons who share the material, not us,“ he said.

“It was a theme that echoed through the defense: Don’t prosecute us, prosecute our 22 million users. They’re the crooks!

“As for Neij’s electrifying 2006 speech? He explained in court that he just read a piece of paper thrust in front of him by the Pirate Bureau, the Swedish open-culture activist party who help start The Pirate Bay five years ago. He didn’t mean it.“