NEW YORK, March 9 (Reuters) - Google Inc's (GOOG.O) online video site YouTube said on Monday it will block all music videos to British users after it was unable to reach a rights deal with the main songwriters' collection society.
The world's largest video sharing site said PRS for Music, a British collection society that collects royalties on behalf of nearly 50,000 composers, was asking it to pay "many many times" more than its previous licensing agreement which has expired.
"The costs are simply prohibitive for us - under PRS's proposed terms we would lose significant amounts of money with every playback," the company said in a blog on Monday.
The move is the latest sign of the tension between YouTube and the music industry and also indicates the video site's resolve to keep operating costs under control as it strives to generate meaningful profits for Google.
YouTube said PRS was unclear about which songs are included in the renewed license.
PRS said it was "outraged" on behalf of consumers and songwriters by YouTube's move.
"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," the London-based organization said in a statement.
The move to block British users access to artists' music videos and user-created videos, which feature licensed music, will take effect on Monday evening British time.
The commercial relationship between YouTube and PRS is separate from YouTube's relationship with major record companies. Those relationships have also been strained at times.
Record companies such as Vivendi's (VIV.PA) Universal Music Group or Warner Music Group (WMG.N) own rights to the sound recordings and music videos. In December, rights talks between YouTube and Warner Music broke down after they failed to agree to payment terms, leading to thousands of videos being taken down.
YouTube and the music industry have had a tense relationship. On one hand, label executives acknowledge that the popular video site is the way many people discover new music especially as the power of radio and MTV wanes.
But at the same time with plunging CD sales, the labels hope that YouTube will serve both as a promotional outlet and a key revenue source. (Reporting by Yinka Adegoke; Editing by Derek Caney)
