31 Comments

Summary:

The ever delightful Mike Masnick over on Techdirt pointed out that young companies innovate, and old timers litigate. One is reminded of his words when reading about Viacom’s decision to YouTube-Google and seek a billion dollars in damages for copyright infringement. Cynthia Brumfield describes the lawsuit […]

The ever delightful Mike Masnick over on Techdirt pointed out that young companies innovate, and old timers litigate. One is reminded of his words when reading about Viacom’s decision to YouTube-Google and seek a billion dollars in damages for copyright infringement. Cynthia Brumfield describes the lawsuit as “fluffy.”

Viacom argues that YouTube has knowingly infringed on others’ copyrights, but I guess it is the “knowingly” part that is going to be hard to prove. As Cynthia points out, “There is nothing in this complaint at all about the DMCA and whether YouTube is violating that law, which protects websites from infringement liability if the sites comply with rights holders’ take-down requests.” The whole thing is a little kooky, including the math behind the numbers, as Liz points out.

Someone over on NTV comments pointed out that YouTube has very little watchable user generated content, and quite a bit of content from media companies. I am not sure, given the pace with which YouTube’s traffic has grown even after Viacom asked them to take down their videos.

According to Hitwise, a web traffic analysis company, Viacom sites had 0.12% and 0.16% of weekly market share of total US visits in January and February 2007. In comparison, YouTube had 0.44% and 0.66% of the total visits.

I have argued in response to that comment that Viacom Inc. could have done something about this a long time ago, but didn’t and basically are using this lawsuit to paper over their own incompetence.

mtvyoutube1.pngmtvyoutube2.pngHere is proof: Viacom’s MTV vs YouTube traffic and visitor comparisons. See for yourself, who really missed the boat here! (Data Source: Compete.com) So why sue now? My guess is that they have been reading Google’s SEC filings and trying to figure out how to get some of those billions sitting in the bank!

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  1. Sameer Mithal Tuesday, March 13, 2007

    There is a larger issue at play here — which is that content owners want to monetize their assets themselves as opposed to having other people take a cut of the pie.

    The days of companies making money without paying for it are gone – basically YouTube got $1.65B without paying the folks who made them successful.

    In my opinion, this will change going forward.

  2. the whole I’m innocent and I’ll take down what you ask me to act is old…..you can make a mistake once but if you have to be asked more than once to take down copyrighted content then it should be punished….if youtube can’t monitor copyright content being uploaded on their site then they shouldn’t be in the business because they are helping to steal and are an accomplice

  3. come on OM, how many times would you go to YouTube if there was only user generated content ? traffic is raising because of all the illegal content. Remove all of them..youtube traffic will fall.

    if gigaom starts a Vlog tomorrow, would you host it on youtube ? Youtube is not the platform for quality user generated content. Not unless they pay you to host videos. Pay per view or something.

  4. I second the anti-youtube comments above.
    Also, while I can understand the point that Viacom could have had better reach to the consumer through Youtube coz of the traffic share .. I think comparing youtube’s traffic share to MTV’s share is just plain wrong!
    Could you compare a Merc showroom’s visitor strength to a showroom that houses ALL the brands incl. Merc? Agreed it is kinda likely that more people who just come to see other brands might see Merc as well, but the visitors who come to Merc excl. showroom would be very very focused in checking Mercs out alone!

  5. The stats from compete.com prove viacom’s point – Note that they had a 46% surge in last month after youtube removed content, but overall drop in last year, which we can say was because of youtube taking away traffic from them. I don’t think copying copyrighted content and wrapping them around with text ads is a fair business. It is very unfair to all those people who have put in their heart and soul in making the content. I like watching shows in youtube but don’t support their model – the money needs to be shared between creators/producers/distributors, but in this case only the distributors are at gain.

  6. I think the issue is less that YouTube “knowingly” enabled copyright-infringement, but rather that there have monetized illegal content via banner ads.

    Nobody talks much about this, but if one actually reads the DCMA law, there is a line which says that a ISP loses safe-harbor if they receive revenue from the material.

  7. Some time ago, when the GooTube deal was done, we noted that all the music studios except EMI had got in on Google’s acquisition, but the TV and Film studios hadn’t.

    We wondered then how they would get their hands on their share of the loot, after all it was mainly their content that made YouTube worth $1.65bn.

    This can’t be that much of a surprise…

  8. Om – Honestly this is the first time I have fundamentally disagreed with you. Your premise is way off the mark.

    First let’s agree that taking down 160K clips was not about traffic. Furthermore, YouTube has been integrated into Google video so with two fronts doors it’s not surprising that traffic is going up.

    Second, this is a shaping move about the industry. If i can take all your content, host it, serve it, have users consume it and provide you nothing in exchange then we are all in trouble.

    How about i screen scrape GigaOm, republish it at an aggregator site where I screen scrape all FM blogs, NYT, WSJ, take out all the ads and replace with mine. Have no referral back to your site. And say – you should thank me for the promo.

    Work for you?

    Google is the new microsoft, bottom line. They would not have done this 2 years ago. They should have paid and unleashed the content and taken the long view.

  9. Adam,

    thanks for the disagreement, and I think it is good you are offering a counter argument. my argument is

    1. they could have done this, but didn’t
    2. they could have prevented the infringement early on, but they didn’t or weren’t paying attention.
    3. the infringers were consumers who were putting up the videos, not the management of YT, though they turned a blind eye, and they are guilty of it.
    4. Why now? Because Google’s money.
    5. I agree, it is a shaping move about the industry.
    6. On the scraping issue – well that works if you have massive scale, and there are scrapers who are doing this on a daily basis.

    whenever we find them, we get them to take the content off, and basically that’s exactly what youtube is doing for all media owners.

    a lawsuit? lets see… how that works out.

    but have to admit, it is one heck-of-a tuesday morning … why even you and i are arguing about it.

    thanks for your comments. really appreciate that.

  10. Venkatesh,

    when i start a vlog, and if YouTube decides that they can sell ads for me and make money for me, hell ya I will host it with them. In fact I plan to – as long as there are dollars for me there.

    That’s exactly what Viacom should have done. Take a big cut of the advertising pie.

  11. How about some credit to You Tube in and of itself? I for one am an admirer of the voyeuristic elements YouTube has given us. Not all has to be packaged in bubble gum wrap, programmed and scheduled.
    YouTube has given us some grainy, dirty, sad and humorous realities. Like all good aggregators YouTube gives us the best of the best, democratically elected and distributed. Some of the best maybe choice tidbits from the commercial heavyweights, but I doubt it is their traditional programmed material that really attracts the YouTuber. It is a reinterpretation, a retextualisation of the material that the commercial heavyweights manufacture. YouTube lets us all define the content we consume.
    YouTube will continue to be successful because WE choose to use it as a medium to interpret and consume material that is commercial, personal, rare or common. Material that is as diverse as we can offer. YouTube, I believe, will remain a player beyond such trolling efforts by institutionalized parties.
    Who really is the content creator?

  12. I don’t condone stealing content but aren’t we talking 30sec clips? One would think these were generating buzz for the shows rather than taking away from them.

    Traditional media companies have no clue what creates demand for their shows nor can they figure how to make money off their own product. YouTube figured that out, so Viacom’s dumb response – instead of negotiating a smart deal with YouTube, let’s kill that proverbial goose.

    Dumb is as dumb does.

  13. 7 Questions to Viacom about the Google Suit…

    For those of you who missed the Viacom vs. Google suit
    1. Where did you come with $1 Billion? Is it the highest number you could think of? A random exponent of 10? And why such a neat number? why not $3.141 Billion? or $2.71 Billion? or simply $GOO…

  14. Laddie I think YouTube’s got enough credit $1.6 Bills is helluva a lot of credit…..how about sharing some of that credit with people who created that content….agree they were not smart enough to market it like youtube, but its still their content and it takes a lot of hard work to create a music video, tv show and a movie and watching some 16 year old rip it off and put it up on youtube can be painful….

    @Mia….you just know what the end result was….you don’t know what happened behind closed doors, I am sure they tried to negotiate some “smart deals” but were unable to….so don’t jump to conclusions….
    and to your point about YT figured out a way to make money? I seriously doubt that….$15 MM a year is probably equal to the cell phone bills of Viacom executives

    Im sure some of you would have seen this but there was an interesting post on Mark Cuban’s (who hates GooTube with a passion) blog a few months back which should be revisited in light of recent developments….

    http://www.blogmaverick.com/2006/10/30/some-intimate-details-on-the-google-youtube-deal/

  15. XYHD.TV » Blog Archive » Economics of the Viacom vs YouTube suit Tuesday, March 13, 2007

    [...] Malik Doesn’t get it. He writes about how  Viacom missed the boat and this is just an MTV vs. You Tube issue.  But he misses that [...]

  16. Moviewallah..your guess is as good as mine or anyone else’s. Maybe Viacom tried or maybe they didn’t…end result = they didn’t succeed.

    As far as “YT making money”…well, that depends on who you ask. What you consider pocket change seems to be serious money to Viacom, but then again, that’s not all they are after.

    Viacom’s claim is that a large part of YouTube’s popularity and the $1.65billion price tag is “directly attributable to the availability of..”Viacom’s copyrighted work on YouTube.
    (Does anyone else think these guys are seriously deluded?)

    This cracked me up, “Defendant’s conduct is causing…Plaintiffs great and irreparable injury that cannot fully be compensated or measured in money.”

    Translate: But please be assured that won’t stop us from trying very very hard to squeeze whatever money we can from YT/Google. You gotta love these lawyers :)

    Rest of the official complaint’s here -http://online.wsj.com/public/resources/documents/ViacomYouTubeComplaint3-12-07.pdf

  17. This cracked me up (from the official Viacom complaint), “Defendant’s conduct is causing…Plaintiffs great and irreparable injury that cannot fully be compensated or measured in money.”

    Translate: But please be assured that won’t stop us from trying very very hard to squeeze whatever money we can from YT/Google. You gotta love these lawyers :)

    Moviewallah..your guess is as good as mine or anyone else’s. Maybe Viacom tried or maybe they didn’t…end result = they didn’t succeed.

    As far as “YT making money”…well, that depends on who you ask. What you consider pocket change seems to be serious money to Viacom, but then again, that’s not all they are after.

    Viacom’s claim is that a large part of YouTube’s popularity and the $1.65billion price tag is “directly attributable to the availability of..”Viacom’s copyrighted work on YouTube.
    (Wow! Does anyone else think these guys are seriously deluded?)

  18. Viacom vuole un miliardo di dollari da YouTube e Google Tuesday, March 13, 2007

    [...] la crescita di Youtube e la sua capacità di attrarre nuovi utenti. Infatti, come sottolinea Om Malik, Youtube aveva acconsentito alla rimozione del materiale che Viacom aveva segnalato, e quindi in [...]

  19. Sramana Mitra on Strategy » Blog Archive » Viacom Confronts YouTube Tuesday, March 13, 2007

    [...] is that through this and other steps, the industry will develop its sustainable business models. Disruptive technology alone certainly does not give any innovator the license to apply the technolog…Einstein was quite sad about his part in the atom [...]

  20. Mia agree on the money part….regarding that line from the complaint I know it sounds a bit dramatic…..but I would agree that it does causes enough nuisance….I remember the first time someone copied one of my blog post and refused to respond to my emails….I was really pissed, but then they ultimately did…and that was just a small post and the guy wasn’t even trying to monetize it by showing google ads….so I totally understand that if someone’s showing off your movie or parts of your movie….as a creative person you have the right to be pissed…..and especially with a site like youtube that refuses to filter the content…..there was a line in the complaint where YT will take off only a specific video whereas some other user would have similar video uploaded by a different name…..imagine how messed up that is when you’ll have to employ an army of people who go through every video and then point to YT to take it off…..it’s plain arrogance on their part

    regarding the delusion part….I don’t have the numbers but I can talk about the YT viewing behavior of my co-workers and only things they watched over last year or so was clips from southpark, dave chappelle, Jon stewart and entourage…..and looking at the number of views of those videos we were talking some serious numbers…..It’ll be hard to find people who’ll go to YT everyday to watch videos of dogs pissing over cats….or people lighting up their farts….it gets old after a while

  21. Noticias » Blog Archive » Demandan a YouTube por mil millones de dólares Tuesday, March 13, 2007

    [...] GigaOm y Error [...]

  22. This is a mating ritual, nothing more, IMHO. Just part of a natural process of shaking Google down for better economic terms and more to the point, defining an ORCHESTRATED strategy by which the companies can work together.

    I continue to believe that the real value of such short form content is in its role as the virtual water cooler since these clips generate buzz, attention and conversations around a content owner’s long form content (i.e., the actual broadcasted program), which is where they make their real coin.

    These same companies after all SPEND millions of dollars advertising these very same programs.

    That said, the paradox is as much about CONTROL as it is about economics. Control of brand, control of content quality and control of monetization decisions.

    One such approach that reconciles these issues is my own company’s vQuote video sampling technology, which deals with branding, attribution and monetization in a systematic fashion.

    I won’t arm wave as this isn’t the forum but if interested in such things, here is a URL: http://thenetworkgarden.com/weblog/2007/01/vsocial_launche.html

    Regards,

    Mark Sigal
    vSocial, Inc. – Say it with Video
    http://www.vsocial.com

  23. The model of advertising is different between the web and the traditional media companies. And this can be a cause for concern for Viacom since Google would control what ads would be placed and where for the content that is available on Youtube. And this could be further trouble for traditional media companies as they might get paid based on actual views rather than on the dicey viewership ratings that are used now-a-days.

  24. Om, surprised to see you justify G-YT so much here. Surely’s it is about Google’s money, Viacom would probably not have sued if it was still a garage entity. Surely it is becuase negotiations must have failed on revenue sharing or some other commercials. But that does take anything away from the copyright infringement part.

    You Tube did not just show a blind eye. They have enabled users to search for illegal content and monetise it. What is the blind-eye here. When you say YT is taking content off for all media owners, it sounds like Google PR speak. Even now if you search for a Comedy Central on YT you have 100s of clips which come up.

    How different is YouTube from Napster in what it is doing, from the point of view of respecting the copyright.

  25. There are two questions here. One is whether Viacom is right. I would contend that if YouTube is hosting copyright material and profiting from doing so, then unequivocally YES. The second question is, what if Viacom can actually convince a jury that it’s right? When this whole Google-YouTube deal went down, we all kinda expected that Google could either sooth relations with media companies or muscle them to stay quiet, but it seems that Google can do neither. I don’t think that anyone has been thinking what might happen if this whole thing actually backfires.

  26. The question is if you give Gubyuby an inch will they take a foot. Does anyone have a mental deficit that blocks them from knowing that Gubyuby is just another corporation that wants to win?

    This is the time when precedents are set. The guys who produce and own the content do not need to kiss Google’s ass at this point and they are going to make sure that never happens. That would be like letting TV manufacturers have any real power over studios and broadcasters, no matter how slight. Ain’t going to happen. But Google clearly will attempt it.

  27. this will be very funny if they go to trial and judgement turns up just $1 to viacom and YT gets to send a list offending ip address.
    my hope is they settle this with some ad rev share and let YT grow towards a nicer model forward. all this legal lawsuit is certainly not constructive for bussiness.

  28. David Mullings Wednesday, March 14, 2007

    As someone who started and runs their own video streaming website, AND had copyrighted content end up on YouTube, I agree with the consensus that YT is profiting from FAILING to police their own website.

    It is not merely 30 second clips, it is entire shows and segments, and Viacom is merely the first to sue, there will be more because it really does take away from these traditional media companies being able to monetize that content video digital video.

    You can’t illegally punish a company for being a digital dinosaur. Too many video websites are too happy to allow COPYRIGHTED content to show up on their sites – because they KNOW it drives traffic and then they can sell and become millionaires – bad precedents have been set.

    Lastly, revenue sharing? YT made all of what, $15 million last year by most estimates? And the attitude of “well if you don’t license the content to us we won’t prevent it from showing up” wreaks of Microsoft-stle bullying

  29. » Viacom vs. Google’s YouTube: Fuggedaboutit? | Digital Markets | ZDNet.com Tuesday, May 22, 2007

    [...] or not, Malik misses the Google YouTube mark once again, $1 billion mark this time. Malik, succinctly on the $1 billion Viacom copyright infringement lawsuit: “kooky” [...]

  30. A Look Back At A Very Google 2007 – GigaOM Monday, December 24, 2007

    [...] March 2007: Viacom sues Google for $1 Billion. [...]

  31. Judge Dismisses Parts of YouTube Copyright Suit Wednesday, July 8, 2009

    [...] decision wasn’t about Viacom versus YouTube. Rather, U.S. District Judge Louis Stanton ruled that plaintiffs in a separate class-action [...]

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