Viacom sues YouTube for $1 billion

[The Fiddler]

http://money.cnn.com/2007/03/13/technology/bc.viacom.youtube.reut/index.htm?cnn=yes

Suit accuses Google of 'massive copyright infringement' of Viacom's entertainment assets.

March 13 2007: 9:53 AM EDT

NEW YORK (Reuters) -- Media conglomerate Viacom Inc. said Tuesday that it was suing Google Inc. and its Internet video-sharing site YouTube for more than $1 billion over unauthorized use of its programming online.

The lawsuit, the biggest challenge to date to Google's (Charts) ambitions to make YouTube into a major vehicle for advertising and entertainment, accuses the Web search leader and its unit of "massive intentional copyright infringement."

CNN's Abbi Tatton looks a YouTube's ability to bring a candidate's political evolution to light. (March 12)
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Google's stock was down 1 percent at the start of trade on Nasdaq; Viacom's were up 1 percent on the New York Stock Exchange.

Viacom (up $0.00 to $39.55, Charts) filed the suit with the U.S. District Court for the Southern District of New York, seeking more than $1 billion in damages and an injunction against further violations.

Viacom contends that almost 160,000 unauthorized clips of its programming have been uploaded onto YouTube's site and viewed more than 1.5 billion times.

"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."

Viacom said its decision to sue Google followed "a great deal of unproductive negotiation" with the company.

Representatives for Google and YouTube were not immediately available.

 

[Stingray11214]

http://money.cnn.com/2007/03/13/technology/bc.viacom.youtube.reut/index.htm?cnn=yes

Suit accuses Google of 'massive copyright infringement' of Viacom's entertainment assets.

March 13 2007: 9:53 AM EDT

NEW YORK (Reuters) -- Media conglomerate Viacom Inc. said Tuesday that it was suing Google Inc. and its Internet video-sharing site YouTube for more than $1 billion over unauthorized use of its programming online.

The lawsuit, the biggest challenge to date to Google's (Charts) ambitions to make YouTube into a major vehicle for advertising and entertainment, accuses the Web search leader and its unit of "massive intentional copyright infringement."

CNN's Abbi Tatton looks a YouTube's ability to bring a candidate's political evolution to light. (March 12)
Play video
Google's stock was down 1 percent at the start of trade on Nasdaq; Viacom's were up 1 percent on the New York Stock Exchange.

Viacom (up $0.00 to $39.55, Charts) filed the suit with the U.S. District Court for the Southern District of New York, seeking more than $1 billion in damages and an injunction against further violations.

Viacom contends that almost 160,000 unauthorized clips of its programming have been uploaded onto YouTube's site and viewed more than 1.5 billion times.

"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."

Viacom said its decision to sue Google followed "a great deal of unproductive negotiation" with the company.

Representatives for Google and YouTube were not immediately available.

These suits are geting stupider and stupider by the hour. The sad thing is that Viacom, unfortunately, may have precedent on their side.

 

[Jibrille]

While other company's have been actively asking youtube to remove copyrighted material it seems that Viacom has been waiting in the wings to launch this hefty lawsuit instead of request material being removed. I've experienced material being removed within minutes of being posted because of company's having previously requested things not be posted. This includes SNL skits (prior to NBC actually setting up their own thing on the site) and tons of wrestling matches owned by WWE. I somehow doubt NBC had someone checking youtube 24/7 to make sure their stuff was not kept up for any prolonged period.

 

[Force10]

I somehow doubt NBC had someone checking youtube 24/7 to make sure their stuff was not kept up for any prolonged period.

I don't doubt that at all; I'm sure they have people monitoring these things.

 

[Jim LotFP]

What's funny is this is going to be resolved through some shifting of money that doesn't exist in real life (some astronomical amount to make everyone go "oohhh... ahhhhh") and everybody is going to be satisfied.

 

[Michael TEOF]

These suits are geting stupider and stupider by the hour. The sad thing is that Viacom, unfortunately, may have precedent on their side.

Guys, I understand that you enjoy watching You Tube videos (as do I), but lets be real here. This is the same moral dilemma we had with Napster. Its one thing to share music with your friends and let them watch your videos. It is entirely something different for you to broadcast all that material and then profit off of it from millions in advertising dollars.

Honestly, this is no different from NBC suing ABC for broadcasting one of NBC's TV programs... and you all just bitching because ABC has a clearer picture for you to watch said programs on.

The Michael

 

[mloanna]

Howard Stern yesterday mentioned that he his legal team contact YouTube about some of his material that is on the site without permission.

Also, all avenues of entertainment have people monitoring the competition. I worked at a radio station in the 90's that use to have the interns monitor what another radio station was playing.

 

[Unca Kev]

Howard Stern yesterday mentioned that he his legal team contact YouTube about some of his material that is on the site without permission.

Also, all avenues of entertainment have people monitoring the competition. I worked at a radio station in the 90's that use to have the interns monitor what another radio station was playing.

I figured as much. There would be times that I would be listening to a song on one station, change stations and hear the same song on that one too.

As far as the suit goes, Youtube has been around for years now (and well known), but after they get bought out by Google, which is worth more, they get sued by Viacom. And as someone said earlier, they do pull copyrighted videos when asked. So this is pretty obviously about the opportunity for a large sum of money and not about at all about about copyright infringement.

 

[booB]

While other company's have been actively asking youtube to remove copyrighted material it seems that Viacom has been waiting in the wings to launch this hefty lawsuit instead of request material being removed.

Not necessarily... Comedy Central, for example, actually started out as a "friend" of YouTube, but then began forcing them to remove their stuff from YouTube's site.

 

[Jibrille]

I figured as much. There would be times that I would be listening to a song on one station, change stations and hear the same song on that one too.

I think my mom & I were driving out to CT to visit a college I was looking at when something like that happened to the extreme. We seriously heard Faith Hill's "This Kiss" about 5 times within a 10 minute period switching from station to station. It was being played all over both the pop & country stations at the time. Two of the stations were even at the same exact place in the song.

And Michael, your example kind of fails, though I understand your point. The quality of videos on youtube are extremely poor because of the compression they go through before being added to the site once uploaded by a user. They are certainly not a good substitute for the real thing.

 

[SeaStorm]

As far as the suit goes, Youtube has been around for years now (and well known), but after they get bought out by Google, which is worth more, they get sued by Viacom. And as someone said earlier, they do pull copyrighted videos when asked. So this is pretty obviously about the opportunity for a large sum of money and not about at all about about copyright infringement.

This would be a great theory, if Youtube hadn't already gone through this process with Universal Music, CBS, Sony BMG, and Warner Music BEFORE Google's acquistion of Youtube. All of them were threatening to sue or otherwise exerting pressure on Youtube for their copyright violations then. Deals were struck with all of these companies in the wake of the Youtube acquistion.

This lawsuit is probably just Step 1 of a process that will ultimately end in a content distribution agreement between the Viacom and Youtube. It's all part of the negotiation process.

 

[Unca Kev]

This would be a great theory, if Youtube hadn't already gone through this process with Universal Music, CBS, Sony BMG, and Warner Music BEFORE Google's acquistion of Youtube. All of them were threatening to sue or otherwise exerting pressure on Youtube for their copyright violations then. Deals were struck with all of these companies in the wake of the Youtube acquistion.

This lawsuit is probably just Step 1 of a process that will ultimately end in a content distribution agreement between the Viacom and Youtube. It's all part of the negotiation process.

I knew about those other companies threatening to sue or exerting pressure, but those corporations didn't end up actually suing Youtube right? I won't claim to be an expert on the subject but, they came to some sort of settlement (removal of the copyrighted material), right? I hadn't heard that any of the others followed through and sued for money and removal of the copyrighted material, like Viacom did. If true, then this shows that those other companies were concerned with copyright issues, as opposed to Viacom, who wants to have them remove the copyrighted material and make some money! Please correct me if I'm wrong though. I don't have enough time to research it right now before work.

 

[nvandyk]

I hate to correct anybody who is a supporter of my band...so forgive me.

As this intersects with my "day job" I can say the following, though I am not speaking ex cathedra vis-a-vis my job.

The "Safe Harbor" provision of the Digital Millenium Copyright Act essentially says that networks aren't responsible for policing their content because they can't possibly account for every piece of information that flows through them. The DMCA has historically placed the onus for content protection on the owner of the content. Vis-a-vis Google / YouTube, this means that Viacom has had to send them a notice every time they want a clip taken down.

Now, however, commercially available technologies (filtering, etc.) make it easier for Google to determine what is there, and remove it automatically. That, combined with the growing power of the YouTube network, and Google's determination to profit from it, are acting to shift some of this onus to Google.

Let's not make Google out to be an altruist here...they aren't putting those clips up as a public service. They are selling advertising against them. Essentially, they are permitting content to be exhibited by people that have no right to do so, and charging people money to advertise in connection with this exhibition. That's not very nice.

One thing, however, does seem likely: this is a step in a distribution deal with them.

 

[The Fiddler]

And Michael, your example kind of fails, though I understand your point. The quality of videos on youtube are extremely poor because of the compression they go through before being added to the site once uploaded by a user. They are certainly not a good substitute for the real thing.

The quality of the video has nothing to do with YouTube raking in advertising profits. Crappy quality videos or not, obviously advertisers see enough traffic through YouTube that they deem it profitable to spend their advertising dollars on YouTube. The copyright owners don't get any of the profit generated by people wanting to watch their fuzzy, low-quality video and that's the problem.

YouTube is great for sharing home videos, and that's what I think the whole concept was at the beginning. But then people started posting stuff they recorded on TV, movie DVDs, etc., and it quickly got out of control. Lawsuits like this will correct the copyright infringement, although 1 billion in damages seems over the top. Regardless, it's a windfall for Viacom and they didn't have to do anything to earn it other than hire a few lawyers. Had people not posted copyrighted material on the site (and had YouTube not permitted it), Viacom wouldn't be in this situation to make boku bucks from the short-sightedness of others.

 

[nvandyk]

Viacom has to prove damages. You don't get $1 billion just for putting your finger up to your chin like Dr. Evil.

 

[Valarien]

Guys, I understand that you enjoy watching You Tube videos (as do I), but lets be real here. This is the same moral dilemma we had with Napster. Its one thing to share music with your friends and let them watch your videos. It is entirely something different for you to broadcast all that material and then profit off of it from millions in advertising dollars.

Exactly.

 

[SeaStorm]

I knew about those other companies threatening to sue or exerting pressure, but those corporations didn't end up actually suing Youtube right? I won't claim to be an expert on the subject but, they came to some sort of settlement (removal of the copyrighted material), right? I hadn't heard that any of the others followed through and sued for money and removal of the copyrighted material, like Viacom did. If true, then this shows that those other companies were concerned with copyright issues, as opposed to Viacom, who wants to have them remove the copyrighted material and make some money! Please correct me if I'm wrong though. I don't have enough time to research it right now before work.

I think your general premise is wrong. As far as I can find, none of the other companies ended up suing. But the deals they struck were not to remove content (Google legally has to do that anyway), but to actually put the media companies' content on YouTube (I'm assuming they paid money in exchange for the content). In each case, the threat of a lawsuit was the negotiating leverage AKA "look, you can't use our content w/o permission; we're going to sue you, unless we come to an agreement where you pay to get our content". I contend that Viacom is doing the exact same thing here, expect that they actually filed the suit.

To put my money where my mouth is, I'll bet you $10 this case does not end in a verdict. It'll get settled and there will be a deal where Youtube will carry Viacom content.

 

[SeaStorm]

Regardless, it's a windfall for Viacom and they didn't have to do anything to earn it other than hire a few lawyers. Had people not posted copyrighted material on the site (and had YouTube not permitted it), Viacom wouldn't be in this situation to make boku bucks from the short-sightedness of others.

From a copyright perspective, Youtube took money out of Viacom's pocket by giving away for free content that Viacom has the legal right to sell. It's not about doing anything to "earn" it, it's about mitigating for damage incurred (and it's a deterrent).

 

[SeaStorm]

Viacom has to prove damages. You don't get $1 billion just for putting your finger up to your chin like Dr. Evil.

Actually, that's not true. Damages for copyright infringement can be calculated based on the gain of the defendant, the plaintiff's actual losses, or as determined by statute (up to $30,000 per occurrence; $150,000 if willful). My guess is that the $1 billion comes from $30,000 X the # of infringements.

BTW, if you ever get a cease and desist letter from someone for copyright infringement, follow it. People think the letter is to scare you into taking the content down. While that may be true, it's also to prove willfulness. If you get the letter and ignore it, you just moved from $30,000 to $150,000 in statutory damages.

 

[Nightmare1z]

Yeah, its mentioned partly why the $1 billion number is so high (Something like 1.5 billion views for video's that Viacom technically owns)

That's a ton of views!