The day the music died on YouTube

MUSIC videos began to vanish from the YouTube website last night after its owner, Google, became embroiled in a row over licensing.

The internet search engine is involved in a dispute with the Performing Rights Society for Music (PRS), which licenses and collects royalties on behalf of recording artists and copyright holders.

The PRS said Google wants to pay "significantly less than at present to the writers of the music". Google said the deal it had been offered would result in it losing money every time a video was played.

As a result of the deadlock, Google began to block UK viewers from watching "premium music videos" – those placed on the site by record companies – at 6pm last night. The company said it will take several days until all professional music videos are covered by the restriction.

YouTube – which was bought for $1.65 billion (£1.2 billion) in 2006 – is the world's most popular video streaming site, but is under pressure by its parent to generate more revenue.

Google described the move as a "painful decision", which it knew would cause "significant disappointment" among fans, but said that "prohibitive licensing fees" were an obstacle in the negotiations.

A spokesman said: "We value the creativity of musicians and songwriters and have worked hard with rights-holders to generate significant online revenue for them and to respect copyright.

"But PRS is now asking us to pay many, many times more for our licence than before. The costs are simply prohibitive for us – under PRS's proposed terms we would lose significant amounts of money with every playback.

"In addition, PRS is unwilling to tell us what songs are included in the licence they can provide so that we can identify those works on YouTube – that's like asking a consumer to buy a CD without knowing what musicians are on it."

PRS for Music said it was shocked by Google's "drastic action", which it said would "punish" music lovers and songwriters.

"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."

While negotiations continue, Google said it would be working "to create more ways to compensate musicians and other rights-holders on YouTube". It recently introduced an option for users to pay to download songs.