So with the Guardian now reporting that MySpace could follow YouTube’s lead in blocking all ‘premium music video content’ in protest at the financial demands of PRS, it looks like we may have reached an important point in online content history all of a sudden.

It’s quite a twist that now it is YouTube themselves pulling content over a copyright dispute instead of being forced to do so by scary lawyers representing livid major record labels.

Blocking the most popular music videos in the UK is clearly not a long-term plan by parent company Google since it really doesn’t benefit anyone in this (except their direct competitors – say hello MUZU.tv!) In fact, the whole escapade rather smacks of Russia’s little trick of turning off the gas supply to Ukraine when they fancy some more cash for warming European homes during an icy winter. I’m sure Google, with their ‘Do No Evil’ motto wouldn’t be too pleased at that analogy, but I can’t see a better parallel right now to be honest.

Clearly Google/YouTube feel that their service is vital enough to the music industry for them to be able to throw their weight around. Whether that is actually true will be revealed in the next few days (I can’t see us being in for a dispute of Virgin v Sky proportions anyway).

Yet PRS hardly look any better in all this either. Demanding too much payback from services that have yet to sort out a viable funding model is an equally rubbish policy. Making real money from music online is going to be about a lot more than screwing platforms for fees. Google may have earned $5.7bn in the last quarter of 2008, as today’s PRS press statement happily points out, but are PRS also guilty of inflating the actual importance of YouTube when setting out their demands?

In the hurry to try and find the ‘answer’ to making the traditional pots of cash that have dried up for the music industry in the digital era, perhaps both YouTube and PRS (and most other people, to be honest) have overinflated their expectations of what a free video service is actually capable of supporting?

Meanwhile, the artists PRS are supposed to be fighting for are immediately starting to suffer, as the embedded videos on their websites go blank, and their promotional campaigns are left in disarray.

As with the saga of DRM, attempts to block the march of free digital content are messy, costly and ultimately prove futile. Let’s hope this potentially dramatic moment in the development of the new media landscape doesn’t get too nasty. No company, even Google, can afford to make too big a mistake when the fans are in charge.