YouTube, the fantastically popular video streaming service owned by Google, is in the midst of payment renegotiations with the Performing Rights Society, an agency formerly known as the MCPS PRS Alliance that collects royalties for songwriters across both digital and traditional media.

That renegotiation isn’t going too well. Talks have completely broken down, and YouTube has vowed to block British viewers from watching all “Premium” (i.e. major label) music videos from next Monday.

It’ll be possible to get round the block with a proxy server, I suspect, but the vast majority of people will suddenly wonder why their favourite band’s videos have suddenly been removed from the service.

It’s almost certainly just a strongarmed negotiating tactic from Google, and for PRS’ part they’ve asked the site to reinstate the videos until an agreement can be reached. But at the same time, Google’s trying to use its clout to bring down rates that have caused the exit of Pandora from Britain, as well as the despair of many other streaming services.

YouTube claims that PRS are responsible, saying that they’re asking for “many, many factors” more money than their previous agreement. PRS, on the other hand, say Google is trying to drive down payments despite its traffic having grown further.

It’ll be interesting to see what happens here – whether PRS will balk and cave in to a hail of bad publicity that will arise next Monday. The organisation is notoriously tenacious, though, and the whole situation could devolve into a staring match. In that case, consumers will just vote with their feet and go elsewhere – to competitors like Vimeo and MySpace video.

(via Epicenter)