Viacom Sues Google Over YouTube for $1 Billion

Snowgen writes "Viacom has filed a $1,000,000,000.00 lawsuit for 'massive intentional copyright infringement' against Google over YouTube video clips. '"YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site," Viacom said in a statement. "Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws.'"

Comments

Chuckle

[Billosaur]

From the article:

In a statement, Viacom lashed out at YouTube's business practices, saying it has "built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent Google."

Isn't that what Viacom does for a living? It isn't people at Viacom writing and producing all this content -- it's the hard-working staffs of these shows, coming up with ideas, generating scripts, acting them out, putting them on tape/film. Viacom just sits there, puts them in the marketplace, and rakes in the advertising money.

Good, no more youtube and/or no more viacom

[tomstdenis]

A win win.

Personally I'm really tired of Youtube. It's all that is wrong with insta-fame types. Though seeing people hurt themselves just to make it big on the intertubes is amusing...

And well, programming on TV hasn't really enthralled me since, well ever. The tired cliche shows may amuse the masses, good for them, but not anyone capable of doing a little thinking on their own.

Tom

Re:Great!

[taskforce]

Google may be rich, but they are nowhere near big enough to bankrupt Viacom. Viacom has a revenue of over $9.6 Billion USD, whilst Google has $10.6 Billion (according to Wikipedia), but this isn't the case of a smaller firm trying to sue a giant. If anything, Viacom, as a conglomerate, will probably have greater cash reserve and certainly has more assets which can be sold off in the event of it needing more cash.

Re:I predicted this a while ago

[Kelbear]

Yeah, it seems like many other people shared this view when the news of Google buying Youtube came out.

Youtube was popular but not really making any money.

Google buys them, and Google has money.

Now it's Youtube, but with money to sue them for. Google buying them just upped the risk factor considerably. Google has quite a few brainy folks on their side, I'm sure they saw the lawsuits coming. So I'm wondering, what's the plan they have in store for this contingency, because there's no way they would've gone into this without a plan...right?

Please?

Re:I predicted this a while ago

[eln]

Viacom wants to license their content to Google to show on YouTube. Viacom tried to negotiate with Google to get this done, but felt that Google's response (whatever it was) was unsatisfactory. Now, Viacom is taking the next logical step.

YouTube is going to take the same path as Napster did: it will be sued into oblivion (or maybe settle for however many hundreds of millions of dollars), and come back as a for-pay service, probably by showing clips of licensed shows for free (ad supported) and offering full episode downloads for a price.

Re:looks good on them!

[Beer_Smurf]

I don't think it's fair that Viacom programming gets all the free advertising on YouTube's bandwidth.

Hypocrisy, thy name is Viacom.

[trudyscousin]

In a statement, Viacom lashed out at YouTube's business practices, saying it has "built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent Google."

But of course, Viacom would never, ever go after the fans, would they?

Spoiling for a fight

[Spazmania]

Google has been spoiling for a fight over the DMCA safe-harbor provisions for some time now. Their book search and regular search business depends heavily on that part of the DMCA's enforceability. Without it, the Prodigy and Napster decisions could be used to annihilate Google and every other modern search engine.

Its far better for Google to explore the ramifications via a subsidiary company that can be cut loose to die if need be.

Re:Spoiling for a fight

[Znork]

"and use their considerable legal and financial resources to try to ensure that they get a favorable ruling."

I doubt there's any point to that; the courts basically cannot resolve this issue in any useful way within the current legal framework. The idea of handing out monopolies might have been useful when the point was to keep the kings friends rich and happy and the content controlled, but they simply cannot be reconciled with a free market economy and todays rate of technological and content evolution. As long as the system is tied to monopoly rights you only have the choice of who you're going to allow to screw everyone else (which fundamentally means, the more 'IP' we have, the more all of us are going to get screwed (and in slightly more economical terms, the more waste we'll get in the system due to monopoly inefficiency)).

It would be more useful to engage in actively trying to fundamentally restructure the 'IP' incentive system to a fundamentally non-confrontational incentive system. Look over the foundation.

Some say we need an incentive to be creative. While I personally disagree to a fair extent (and things like free software indicates otherwise), ok, I'll buy that maybe some people do need an incentive, and that some creative talent could be more creatively productive if they had a certain economic security. As the point of an intellectual incentive system would be to maximize creativity, that leads to the conclusion that we somehow may need to finance creativity beyond what a fully competetive market would do. So, say, a popular creative work of value to many people should conceivably generate enough revenue for the creator/participants to live off for a certain time (too short would be bad and an insufficient incentive, too long and there would be no (again, claimed) economic incentive to create further works (and spend too much on a single creative work, and you get fewer works for total economic resources spent instead).

So, how do we determine what works merit incentive? Let the free market handle it; works that get copied the most, ie, are most highly desired should probably be the first to receive incentives (until their useful payout is exceeded, the authors et. al die, etc, and the incentive no longer serves the creative purpose). As there would be no right to prevent copying anymore, there would be no particular reason to avoid reporting the numbers of copies being made, ie, it would free up anything from p2p networks through youtube, IPTV broadcasters, network radio broadcasters, etc, to record popularity of works and lay the foundation of who gets paid.

Then the final question becomes, how does one finance the system? First, realize that the current system is essentially a tax. The costs to the economy are very real and altho the copyright holders have a strong incentive to shut up about the actual costs to the economy, the billions they collect are as real as the billions the IRS collect. The difference is, with the billions the IRS collect, there's actually some theoretical and nominal responsibility and accounting of the costs to the economy and what they're used for.

As responsibility, accounting and some form of democratic control over incentive systems is generally regarded as a good thing, I'd say moving the collection of revenue and responsibility for the system over to the state agencies usually responsible for such things to be fairly reasonable. So where in the economy would it be most equitable to collect the funding? Personally, I'd say, where the money's made. IE, slap a tax on youtube ad revenue. Slap a tax on movie theatres. Slap a tax on IPTV revenues. In fact, slap a tax right over anyone who makes money off selling, distributing, or performing the works in question. As the works being played is recorded and accounted for (something which is already done in most cases), the funds gathered from display of that work will primarily be going to the creators of the work, making sure the incentive generated is both as equitably gathered and a

Re:Please:

[Atlantis-Rising]

People suggest this every time, and every time the same response is valid: That's not a good solution on Google's part, because it ends up negatively impacting Google.

Tit for tat retribution really only works on the playground. And maybe in international spy rings.

Re:What the

[russotto]

The DMCA is badly drafted because the companies which wanted it -- content providers like Viacom -- deliberately had their lobbyists draft it that way. They expected to use the power of their corporate takedown-letter-writing department to shut down anything they didn't like. They didn't count on a service provider with the capacity to not only host enough content to give their takedown-letter department writer's cramp, but to actually be able to handle all those takedown letters without shutting down.

Re:Just numbers relevant to "IBM/SCO on their ass"

[xenocide2]

I'm not sure thats exactly true. Google's P/E is only 3 times IBM's, and earnings growth is ridiculus with Google (barring accounting irregularities). Just going by PEG, Google seems more undervalued.

Re:Just numbers relevant to "IBM/SCO on their ass"

[Red Flayer]

Most analysts consider GOOG to be inflated, but not hyper-inflated -- here's a quick Yahoo finance hit for GOOG key stats, note the market cap vs. enterprise value numbers. I don't have the specifics for how Yahoo calculates enterprise valuations, but they are in line with most analysts -- who, of course, could be wrong.

IBM is considered slightly undervalued.

Re:I predicted this a while ago

[tha_mink]

YouTube has much more chance of landing a Betamax-type verdict than Napster did. I'm not saying it's cut and dried, but I'd be surprised if they can't at least deflect the bulk of the liability to their (copyright infringing) users, which is arguably as it should be. $1 billion dollars? IANAL, but I just don't see it. I kind of agree with you. The same can be said for all the MySpace lawsuits out there. It's really a question of how courts will view the newish paradigm of websites being merely conduits for user behavior and simply trying to monetize the traffic. Maybe that's oversimplified though. I suppose if there was a magazine that printed reader submitted stories and happened to print excerpts of Moby Dick, the magazine publisher would probably be liable.

Re:supply and demand

[ObiWanStevobi]

Well, the Comedy Central site does have a pretty large amount of video up, with their own advertisements. That has to be pretty annoying to them, that they put up their own infrastructure for web video, yet everyone is watching the same clips on YouTube and Google is getting the advertising $. Plus it's the same content they are trying to sell over Windows and Xbox Live.

Re:looks good on them!

[Furry Ice]

It would surprise me very much if Viacom was paying people to post their content to Youtube, simply because they don't need to. Everyone is doing it for them.

As much as it's wonderful that indie directors and artists now have a distribution channel, people still wish to watch things that they like. And oftentimes what they like has had its copyright assigned to a large corporation. I would never personally post an episode of Aqua Teen Hunger Force to Youtube, but I *would* watch one that someone else had posted. Maybe the copyright owners themselves are posting these files, but I doubt it. The users have learned that they can post things faster than the operators can remove them, so they do it.

The obvious solution is to not allow others to view videos until they have been reviewed and approved, but I can also see why Youtube wants to avoid doing that. It's too much work, and it might not always be obvious what is copyrighted and what is not. It's easier to let someone else inform you about violations and remove them when you see them, but it's not clear if that practice is going to be defensible in court. I'd sure hate to see services like Youtube and Google Video disappear entirely, but they are probably going to have to change a bit. I just hope the copyright giants don't destroy the spirit of the sites.

Re:Please:

[forgotten_my_nick]

I think the consumer could end up worse for it.

For example. Take littlekuriboh. For anyone who doesn't know him he created a parody called "Yu-Gi-Oh The Abridged Series". Basically a poke at the stupid cartoon. Perfectly legal (as its parody and not a straight rip of the cartoon).

Extremely popular series as well, as soon as he posts an episode it goes to the top of the page.

However YouTube started nuking his episodes claiming copyright infringement. There are still a couple left on his account.

The end result, everyone copied the episodes nuked and started reposting them back to youtube. Meanwhile littlekuriboh has moved to other sites like Dailymotion (full series here).

I think Youtubes honeymoon is over and you will find people will just move to other sites that will cater for what they want.