Are You Kidding? A Billion Dollars?

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Viacom sued YouTube in U.S. District Court today for more than $1 billion in damages.

According to U.S. copyright law, when a copyright owner’s claim of willful infringement is upheld, the court can award damages of up to $150,000. That would be for every instance of infringement, which could possibly mean every clip.

Take a trip to the calculators, noting that Viacom today pegged the number of infringing clips at 160,000. At up to $150,000 a pop, that’s potential total damages of $24 billion. Seriously. $24 billion.

Viacom, by comparison, didn’t go for the big money (yeah, right). The company said in its suit it was seeking “statutory damages for Defendants’ past and present willful infringement, or actual damages plus profits, of at least one billion dollars.”

Just so we’ve got all the relevant numbers out there, YouTube was, of course, bought for $1.65 billion by Google late last year.

But according to Bear Stearns’ analysis of Google’s SEC filings, YouTube made just $15 million in revenue in 2006.

Of course, Viacom has to win this lawsuit to get to the money stage, but it sounds like a whole lot of things are being overvalued here.

10 Comments

xxdesmus

This is quote from a smart guy over at TechCrunch…he said it just about as well as I ever might so just read this:

“you are forgetting that the DMCA Safe Harbor provision only applies to hosts. I would anticipate that part of Viacom’s strategy will be to question whether YouTube reasonably qualifies as a host. Unfortunately, the DMCA does not do a great job at defining a host (it was written in the late 90s), however I believe that it did not intend for a service such as YouTube to be considered one. See my post above (#39) for the three arguments against YouTube being a host. As PJ correctly points out, one of the arguments against YouTube being a host revolves around the transcoding of videos into FLV format. I don’t see how the traditional definition of a “host” as contemplated when the DMCA was drafted would apply to a service that formats content. Essentially, YouTube is directly involved in the infringement not only because it has a significant financial incentive but because it directly facilitates infringement through the prepartion of the content for display. It is not as if users are simply uploading their content to a YouTube server where other users can download it in raw format. YouTube is involved in all aspects of the infringment: putting content into a format that enables it to be played and shared via YouTube’s player and then providing tools to easily organize and locate content. And to top it off it is benefitting financially by showing advertising.

Using Napster as a comparison, Napster simply provided a “directory” of where infringing content was located. It didn’t host it, didn’t transcode it and actually didn’t benefit much financially (although it did raise substantial funding which counts). On the surface, it seems to me that Google is facing a serious legal challenge.”

It sounds like unless Google strikes a deal they will be in for a world of hurt.

Matt_

Liz I think that Viacom are claiming high so they can either force Google to sign a deal on their terms and not Youtube’s or receive a judgement that will force YouTube and Google video to put filters in place like many of the companies p2p have had to do after Grokster .

Kazaa is still in business and Joost only came to life after Zenstrom and Friss paid 20 Million of their own money in the $125 million suit against Kazaa.

MovieWalah

If YouTube made 1.6 billion by spreading southpark and Daily show videos….they should be ready to pay a chunk back to Cartman and jon stewart….”respect my Authoritah youtube”

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