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YouTube Should Call Viacom’s Bluff

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“Copyright infringement is still a theft. A crime. A felony. Plain and simple.”
— Viacom chairman Sumner Redstone, Aug. 22, 2006

Given Sumner Redstone’s recent opinion on unauthorized Internet video-sharing, Friday’s call from Viacom for YouTube to take down 100,000 video clips was probably inevitable. What was striking, however, was its timing, coming a couple days after Google CEO Eric Schmidt was waxing poetically about how media owners should submit copyrighted content willingly to Google, to then monetize the audience that gathered to watch.

Clearly, Schmidt’s thesis isn’t one that Viacom subscribes to — yet. But some stats sent over to us by the folks at Hitwise show that Viacom’s websites are losing more traffic to YouTube than they are gaining — a trend Hitwise attributes to the ease of viewing on YouTube vs. Viacom’s less friendly sites.

Seems to us that after letting the old lion roar a bit, YouTube should call Viacom’s bluff and let it see how well Colbert and the Daily Show do without their “free” advertising outlet. Since online video these days is YouTube and not much else, in the end Viacom really has little choice but to make a deal.

These days, nothing online is truly viral video until it lands on YouTube, which is perhaps why CBS and NBC have already made baby steps in the direction Schmidt talked about. But Viacom’s shot across the bow won’t be the last big legal challenge the GooTubers face; waiting in the legal wings are licensers in Europe, along with some friends from Fox, who made a smaller, more targeted legal swipe at YouTube last month. Call it negotiating, old-school style.

Listening to Schmidt on the conference call last week, the partnering plan sounded a bit arrogant — like, “well this stuff is going to get out there anyway so you may as well partner with us and get some cash for it.” We’re sure legally he’s on sounder ground than that. But Mark Cuban also has a beef with YouTube’s you-tell-us enforcement scheme, and even proposes a novel test (upload porn to test GooTube filters) whose success we sadly don’t have time to assess right now.

Still, YouTube’s success means that Viacom and others will probably come to terms, since YouTube might be doing a better job of promoting their shows online than the owners are. Hitwise’s research director LeeAnn Prescott offers the following analysis:

Viacom’s cable network sites may be losing more traffic to YouTube than they are gaining, although YouTube serves a wide distribution vehicle for their content, particularly in the case of the Daily Show and the Colbert Report. Because their own sites are not as user-friendly and do not have the established community of YouTube, it seems they are not being used for watching clips of shows.

So it may be a crime, and a felony, but at the right price, it’s also probably a good marketing partnership. Now it’s up to the lawyers to find out what that price is.

8 Responses to “YouTube Should Call Viacom’s Bluff”

  1. @Chris D

    When I said the Verizon brand, I meant brands as in the ones you’ve listed.

    And by heavy handed, I was referring to all of the legit content that got caught in the DMCA requests. (see my post linked to above)

  2. @Steve, %99.9 of the population have no idea who Viacom is – they only know it’s separate brands (which I was suprised to hear included powerhouses such as Paramount Pictures and SKG Studios [Spielberg, Katzen, Geffen], I thought Viacom was purely cable TV). So how are they damaging the Viacom brand if no one knows that name.

    How is “take down our content per the DCMA regulations” considered heavy-handed? Sounds perfectly reasonable to me. You may disagree on the promotional benefit, but there’s no way one can argue that Viacom is being heavy handed.

  3. I don’t know what you mean by “call their bluff”. They have to take down the content, pure and simple. I’d say it’s really Viacom calling YouTube’s bluff here: “The promotional value that you (YouTube) claim here is less than we think our content is worth”

    YouTube is going to be under pressure here. If there is a general sense of unease among major advertisers that YouTube is still not “ready-for-prime-time” due to all of this legal threats, they are likely going to withhold advertising interest in the near term until thing settle down.

    YouTube’s mission for 1st half ’07 is to stablize the “platform” businesswise through licensing to allow for monetization. That’s going to be a big challange until all of this goes away. Plus with Japan and Europe all in a huff, that’s going to be the next big hurdle coming up.