Posted on 02/06/2007 11:09:41 PM PST by nickcarraway
Now that Viacom has successfully ordered YouTube to remove 100,000 clips from its television shows, one big question hangs in the air. Could the popular video-sharing site survive an onslaught by old media?
After months of failed negotiations, New York City-based media conglomerate Viacom ordered YouTube to remove its content from the site Friday. The company complied, and as of Tuesday most if not all of the offending clips were no longer viewable on YouTube (see Viacom to YouTube: Yank Videos)
Viacom defends its actions.
“YouTube is selling advertising in competition with us, using our own content,” said Michael Fricklas, general counsel for Viacom, in an interview with Red Herring Tuesday. “This is not a fair business model—for a $120 billion corporation to appropriate material for their own profit.”
Meanwhile, top execs at both companies traded barbs in the press over the weekend—indicating that the tensions between the two operations are far from over. Viacom accused YouTube of selectively filtering content and demanding partnership agreements in exchange for copyright protection. Google responded by calling Viacom short-sighted.
Behind the bickering is a larger question about whether Mountain View, California-based Google, which took a big chance by acquiring YouTube last fall for $1.65 billion, will be able to successfully steer the operation through the myriad copyright issues raised by its very existence. If other media companies follow Viacom’s lead, serious problems could arise.
YouTube declined to be interviewed, and a spokesperson stated, “As always, we are educating our users about their rights and responsibilities under the DMCA [Digital Millennium Copyright Act], and we will inform Viacom of any counter-notifications we receive.”
YouTube, based in San Bruno, California is negotiating partnership deals with most of the large media companies, including NBC, CBS, Warner Music and News Corp., but hasn’t cemented any long-term arrangements as of yet.
“Viacom is well within its rights to take its intellectual property and demand that it be pulled off the YouTube site,” said William Heinze, an intellectual property attorney, who said he is surprised that so many blatant rip-offs remain online for as long as they do.
Chad Hurley, CEO of YouTube recently spoke of revenue-sharing arrangements the company hopes to set up with video creators. However, he didn’t specify how these deals might work (see YouTube to Share Revenue?).
While much has been made of the user-generated content on YouTube, some of the most popular content on YouTube is professionally produced—mainly clips from popular TV shows.
As corporate parent of such channels as Comedy Central, Nickelodeon, MTV and BET—not to mention Paramount Pictures—Viacom has a significant stake in the fight. It claims that downloads of clips of such shows as Jon Stewart’s Daily Show, The Colbert Report, South Park, and SpongeBob SquarePants represented 1.2 billion streams of illegally posted content, and many millions in lost revenue.
Indeed, some observers say that Viacom, while within its rights, only brought out the big stick of the law for financial reasons—and could be brought back to the table if YouTube offered a satisfactory revenue-sharing arrangement.
“What it boiled down to is what Google was willing to give less than what Viacom wanted,” said Van Baker, analyst with Gartner.
In his view, the takedown notice was a “hardball” tactic on Viacom’s part. The clips serve as valuable promotional tools, he pointed out, and therefore the company does have a motivation for making it work.
“I don’t think the dance is over by any stretch,” said Mr. Baker, who predicts the two sides will be back to the table soon.
Under the terms of the DMCA, YouTube isn’t required to police its site looking for copyright violations. Rather, copyright owners must send takedown notices if they wish a clip to be removed due to a violation. This offers YouTube some flexibility in dealing with repeat offenders—but ultimately, say most observers, it must figure out how to play by the rules rather than risk the wrath of big media. And while its popularity probably won’t wane with the loss of the Viacom clips, it would become a very different site if no mainstream videos culled from TV or movies were available.
All of which is reminiscent of another innovative, groundbreaking company that pushed the limits of copyright—Napster. Clearly, Google is hoping for a very different end to YouTube’s story.
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