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Viacom Sues Google-YouTube: Wants More Than $1 Billion In Damages, Injunction

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Viacom continues its aggressive assault on Google and subsidiary YouTube policies with a lawsuit in U.S. District Court claiming more than $1 billion in damages. That’s the headline — now the details. (We’ve posted the pdf for you to read or download.):
Several Viacom entities — Viacom International, Comedy Partners, Country Music Television Inc., Paramount Pictures and BET — are parties in the 27-page suit filed this morning in the Southern District of New York against YouTube and Google. The media company alleges that the innovations that have fueled the internet revolution “also have been misused to fuel an explosion of copyright infringement by exploiting the inexpensive duplication and distribution made possible by digital technology.” And, Viacom claims, in a lengthy introduction, some “have sought their fortunes by brazenly exploiting the infringing potential of digital technology.” That group, from Viacom’s perspective, includes YouTube, which, the suit says in the often grandiose wording of such documents — not only “fundamentally threatens” Viacom “but the economic underpinnings of one of the most important sectors of the United States economy.” The sale of YouTube to Google generated “extraordinary riches for YouTube founders and investors.”
— Despite reports that many clips identified in its recent major cease-and-desist demand weren’t Viacom content after all, the company says it has identified more than 150,000 unauthorized clips that have been viewed “an astounding 1.5 billion times.”
— Viacom claims YouTube deliberately “shifts the burden” completely to copyright holders because it allows the site to profit.
Copyright protection as bargaining point:
— Perhaps most important, Viacom claims that YouTube “has deliberately withheld the application of available copyright protection measures in order to coerce rights holders to grant it licenses on favorable terms.” And that YouTube has actively kept copyright holders from finding infringing videos through searching the site. (Later, the suit also claims the “purported copyright protection tools” being offered to partners isn’t even that effective.)
What Viacom wants (besides attention):
— A declaration that YouTube and Google “willfully” infringe on Viacom’s copyrights.
— A permanent injunction requiring the defendants “to employ reasonable methodologies” to limit or prevent infringement.
— And, the real attention-getter, statutory damages or actual damages plus profits of at least $1 billion.
The fine print:
— The list of legit distribution points includes Joost, which isn’t yet public, “and numerous others that currently exist or are just emerging.”
— Viacom points to Google’s decision to include YouTube clips in its own video search.
— Lots of detail about how Viacom thinks YouTube operates.
Where’s the money?:
— YouTube’s actual profitability has been the subject of much conjecture. Truly, the only profit anyone can be sure of externally is the actual sale to Google. Viacom contends YouTube derives ad revenue from video on its own site and the embed feature and that infringing material made the site attractive to users more quickly and aided the quick jump to a $1.65 billion valuation.
Viacom makes much of Chad Hurley’s comments and press reports that YouTube will only offer its copyright tools to business partners. The suit acknowledges Google CEO Eric Schmidt’s recent comment about working with all copyright holders but notes the lack of specifics and assurances that the level of protection would be the same for parters and non-licensees.
Immediate effects:
— None beyond the inevitable claim that certain issues can’t be discussed in detail now because they’re the subject of a lawsuit. It’s basically business as usual. Viacom gets to look aggressive; Google execs get to talk some more about how media companies use law as a form of negotiating.
Update: Google’s response: “We are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree.”
— <a href="" title="Viacom and YouTube

9 Responses to “Viacom Sues Google-YouTube: Wants More Than $1 Billion In Damages, Injunction”

  1. Viacom could be seen to be suing the site that feeds its addional viewers. if a Youtube uploader claims they have permission and are not infringing copyright, even when they blatantly are. Are Viacom claiming that Youtube supports and provide a platform for people to upload Viacom content from their own Viacom viewers.

    Under the DCMA Youtube does remove material infringing copyright when asked to do so.

    But how many uploading copyright infringers are Viacom planning to sue en masse, when many of these infringers are from their audience?

    This is reminiscent of RIAA vs Napster and its the fans doing the file sharing/swapping using Napster or other P2P not application or the site. I wonder how many homes will be raided to find illicit uploaders or laptops, mobiles, ipods, computers seized, people/students being fined or being taken to court.

  2. f. chong rutherford

    This is simple business. Many Viacom properties currently host their own videos. For example, Comedy Central Motherload uses similiar technology as YouTube and Google to deliver short form content, sometimes with sponsorship. The dollars paid for sponsored videos have a direct relationship to the exclusivity of the product. The advertiser is paying for views. If the reality (or even the perception) is that views are elsewhere (like on YouTube), then the dollars paid will likely be lower and Viacom makes less money on Motherload.

    Viacom and YouTube/Google have been negotiating for months now. The negotiations broke down sometime in February–more than likely over revenue sharing between YouTube/Google and Viacom, and over illegal content. A $1 Billion lawsuit is designed to produce one thing; a settlement. If it goes to court, the matter would (likely) take the rest of the decade to go through the legal system. None of the parties involved wants to wait that long. It is highly unlikely it will go to court. A settlement will come sometime within the next 3 to 6 months. Probably.

    The video delivery platforms that YouTube, Google and Viacom use are all strikingly similiar. The race that YouTube/Google is trying to win is to marry contextual search with video. The first step of that is google adwords. The next step is to have contextual search produce relevant commercials before a video. This requires both business infrastructure and technical infrastructure to pull off. Even if the technology exists, you still need customers.

    No other company is likely as close to this as YouTube/Google. Once YouTube/Google has this in place, the game changes very quickly for all players–including Viacom. YouTube is far from over, and if Google is able to get that model in place first, they're going to be sitting like a lion on a mountain of beef. If someone beats them to this, however, then all bets are off.

    Could be wrong, but that's my guess on how it all plays out in the end.

  3. is Google Microsoft.

    Mark Metz – good insight. Fragmentation has massively benefitted search and is what YouTube is hoping for.

    Here is the fundamental issue – youtube is not as a search engine – passing folks back to the original content owners. It is by no means promotional. This is consumption.

    As far as DMCA I'm no expert but there is a difference between the "dumb pipe" argument for ISPs and a hosting, we would be hard pressed to say YouTube is of that ilk. This is a discovery and consumption engine that serves ads against content.

    So in a world where i can scape every site, host it, serve it, strip the ads from it, not pass back traffic and monetize it on my site, seems like a bad precedent.

    Seems like Google is loosing that we are cuddly feeling, and looking more like Microsoft of old every day.

  4. Agh, the very loud rumblings of the death rattle of the Studio/Network/Media Conglomorates — who barely share a dime of their actual profits with the "real creators" behind the Content.

    Wonder what a boycott-Viacom viral video could do to Viacom's ad revenues?

  5. The damage done goes far beyond copyright in my opinion. YouTube uses other people's content to establish itself as a starting point for internet users looking for video. But Viacom and the other media companies are powerhouses in their own right, and don't need YouTube to help get people to their websites or promote their videos. They are, in fact, valuable Channels with a Capital C, not just channels within YouTube. People can, and do, bookmark Viacom's sites and come to them directly. But, if YouTube establishes itself as the first place to go, Viacom has lost much more than just copyright control of their IP. They've ceded their audience.
    The search engine model works for websites because there are billions of them and they want the traffic. It probably won't work for video since the big media companies are capable of getting that traffic on their own, and don't need interlopers. Users can, using their bookmarks, set up each major media company's website as a defacto "channel" and direct navigate.
    Keep in mind, and I have said this for many years, the search engine's worst nightmare is the specter of direct navigation. Viacom's sites all have direct navigation potential and they should guard that with their corporate lives. This may be Google's waterloo (googaloo?).

  6. Web 1.9

    The anti-Viacom sentiment is surprising. Is there a marketing benefit to the clips appearing on YouTube? Probably, but shouldn't Viacom be the one that gets to exercise control over whether and to what extent the content is used in that manner?

    It's one thing to say that the democratization of content has made it impossible for media companies to control their content — it's another to say that Google and YouTube don't have a responsibility to try to prevent it on the services they operate.

  7. Hanuman67

    Good point. It's simply greed without principle. The idea behind a copyright was to expand the public domain, but large media companies have used their lobbying clout to expand the copyright to undermine the idea of a public domain.

    Google gives huge visibility to these media companies and their content; they should be grateful. It's also a serivice to the public. Instead of griping, these guys should be getting on board.

  8. whoindatgarden

    It was in the making for sometime, just that it took sometime for Viacom to see how best to get some financial rewards. This lawsuit is not about principles but more about money.
    Viacom feels it has a case against Google's Youtube unit, yet prior to Youtube's acquisition by Google, Viacom had not bothered to try and sue Youtube (Sequoia Capital made the initial investment). Viacom's content was being shared with the world without any permissions then even.
    So to make a case now is all about wanting a share of the money.
    In the long run it is not going to amount to anything. These folks are sleeping with one another constantly to be principled in anyway or from.

  9. I'm a bit lost here…why the total slant against Viacom? Was or was not their copyrighted material used without their permission? And did YouTube profit from that use?

    What actions should Viacom take? Can you provide some insight?