Radiohead blast YouTube and labels for not sharing ad revenue

The fight between YouTube and a UK music royalties group appears to be heating up as Radiohead, Billy Bragg and Robbie Williams have come out against the video-sharing site.

Williams, KT Tunstall and Radiohead will meet today with other high-profile musicians to protest "at how badly they are treated by record companies and music-streaming Web sites like YouTube," according to a report in the Times. The artists will gather as part of a newly formed group called the Featured Artists Coalition.

YouTube announced on Monday that it couldn't reach a deal on licensing fees with the UK's Performance Rights Society (PRS) and had stopped streaming certain music videos in the UK, although the PRS revealed yesterday it had been in further talks with the Web's largest video site. The PRS collects royalties on behalf of the music industry in that country. Music radio station Pandora has already fled the UK and MySpace reportedly may also pull out.

"Google, YouTube's owner, is a company that makes billions in profits," Bragg told the Times. "We think they should be paying artist royalties from the advertising revenue they make. A dispute like this illustrates the need for the creation of the Featured Artists Coalition, so we have a voice and the public understand that sites like Google should be paying for music."

But YouTube said in a response that the artists shouldn't have a beef with the video site. "We absolutely agree that artists and writers should be paid from the advertising revenue earned from their content on YouTube," it said in a statement. "That is precisely what we are offering the PRS."

Representatives from the music acts and the FAC were not immediately available for comment.

YouTube is not the only company Bragg and Radiohead went after. MySpace, which Bragg says isn't "putting any money back into content", and Nokia were also mentioned in the Times' story.

"The music companies did a deal with Nokia recently," said Radiohead guitarist Ed O'Brien, referring to the Comes With Music service. "They could launch phones with access to all sorts of music. We think they all received advances from Nokia, but nobody is saying who got what -- and we think some of that money should go to the artists."

Our sources within the music sector say that the PRS is taking a hardline stance. Some UK label executives are quietly hoping the PRS will make a deal.

One of the issues that may be facing YouTube, MySpace, Spotify and other services that stream songs over the Web is that recent studies have shown streaming is cannibalising music sales, industry sources say. The labels have partnered with streaming services hoping that they would generate big advertising bucks and also promote sales.

That's not the way it has worked out, reports Douglas MacMillan in BusinessWeek. "Researchers and industry consultants say online music sites," writes MacMillan, "are being used by a growing number of listeners as a substitute for purchasing music rather than serving as a catalyst for more purchases."