Google pulled thousands of music videos from Youtube after negotiations with music collection entity PRS broke down, leaving UK users looking for alternatives and angering famous musicians, artists and writers.
There are already fears that other online music streaming websites including Myspace Music could scale down their operations or close down altogether if the rates remain uneconomical.
The online video giant's stance has been backed by the likes of We7 and Last.FM; the latter's founder, Martin Stiksel told the BBC that he hopes a resolution could be found to prevent users from reverting back to old habits and embracing piracy.
Stiksel said that both parties Youtube and PRS should strive to get cheaper and less complicated licences. Last.fm's founder also wanted to see a fixed minimum fee introduced, similar to what's currently being used on Terrestrial Radio.
Charging for each track or video being played would cost online music providers significantly more since the audience, compared to traditional radio, is way bigger.
Patrick Walker, head of partnerships for YouTube EMEA, told NMA that PRS and its other partners should not try to strangle ad-funded online music services from the start and should be more realistic when it comes to expectations about online royalties.
A similar row over music royalties in January 2008 saw online music service Pandora pull out of UK altogether while Warner Music decided to remove its content from Youtube in January for the same reasons.
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Like iTunes, Google is using its clout to influence the PRS. The Performance Rights Society says that the talks with Youtube is "positive" but things are apparently not as smooth as they seem. Google stand is currently, "all or nothing". Only an alternative Hulu-like solution could possibly make Google change its mind but this is as unlikely as finding a living dodo.