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YouTube has begun blocking music videos to UK users following a failure to reach agreement with PRS for Music on a new royalties deal.
YouTube said it was being asked to pay an amount to the collecting agency for writers, composers and publishers that was "many many more times higher than under the previous agreement".
PRS for Music criticised YouTube for taking action without any consultation and urged it to reconsider.
The UK is a top-five market for the US-based online video company, but music videos it streams from major and independent labels will no longer be available, denying all parties revenues from advertising that accompanies the videos.
"I don't think anyone is going to be happy about this, but there's general understanding that we all need to work under terms that are reasonable for our businesses and we're hoping we'll come to a quick resolution," Patrick Walker, YouTube's director of video partnerships in Europe, told the Financial Times.
In a blog note, Mr Walker said the costs would be prohibitive, with YouTube losing significant amounts of money on every playback under the proposed PRS terms.
He said there was also a lack of transparency - PRS was unwilling to tell YouTube what songs were included in the licence so it could identify works on the service.
"That's like asking a consumer to buy a CD without knowing what musicians are on it," he said.
PRS for Music is a collecting agency that issues "mechanical" and performing licences for music to be used online, or performed or broadcast.
Steve Porter, chief executive of PRS for Music, said the organisation was "shocked and disappointed" at the last-minute notice of YouTube's "drastic action". "We believe [this] only punishes British consumers and the songwriters whose interests we protect and represent."
YouTube will not be blocking music uploaded by artists or users independently, but official premium music videos will start to disappear from searches made by UK users and will not be playable.
YouTube has agreements with three of the four major labels and says it has generated significant online revenues. Warner Bros removed its content from YouTube in December after talks to renew a licensing agreement failed.
Other US-based music services have struggled to establish themselves in the UK, citing licensing difficulties.
Pandora, based in the San Francisco Bay Area, blocked its service to UK users in January 2008 saying licensing rates were "unwork-able".
**EDIT**
ive found a way around this . well i think. go onto [url]www.youtube.com[/url] log in and click "account" on the settings there change your country to united states. at first i didnt think this would work but it seems like it has.