YouTube have stood by the extraordinary decision it made yesterday to pull music videos from its UK website operation, due to its dispute with the Performing Rights Society over a new licensing rights deal, according to the BBC.

Meanwhile The Guardian reports that the dispute could spread to MySpace and other music sites, with suggestions that the demands made by PRS have been ‘uneconomical’. But YouTube and the PRS are due to meet in London this afternoon in a bid to resolve the deadlock.

It’s reported that YouTube began to remove videos last night, although it remains unclear whether YouTube have actually withdrawn the thousands of videos under threat. Various label channels of both major and independent labels are still showing videos.

But the dispute sharply highlights the huge importance of YouTube to the music industry – and of music videos generally, to both the music industry and YouTube.

While YouTube argue that the PRS are asking for such a large increase in licensing revenue that it is threatens their business model, the PRS claim that Google, owners of YouTube, are attempting to drive down the licensing terms. If they are both correct, the reason lies in the one thing that they can both agree upon – that the volume of viewing of music videos on YouTube has shot up in the last 12 months.

Needless to say, the makers of music videos have yet to be mentioned in terms of this dispute. But the potential income from licensing agreements is clearly of such magnitude then it also brings into sharp focus the importance of a thriving and sustainable music video industry to service the music industry.