Viacom sues YouTube for $1bn

It was bound to happen.  Notwithstanding YouTube’s recent efforts to cut down on videos under copyright on its servers, it was only a matter of time until one of the media companies launched proceedings for some ridiculous amount of money.  I have been expecting this since Google bought YouTube, if anything because of Google’s deep pockets.

Viacom is alleging that YouTube has engaged in "massive intentional copyright infringement" by allowing 160 000 clips from the Viacom stable to be available on the service for viewing.  These clips have been viewed more than 1.5 billion times.  According to the Viacom press release:

In connection with the filing, Viacom released the following statement:
"YouTube is a significant, for-profit organization that has built a  lucrative business out of exploiting the devotion of fans to others’  creative works in order to enrich itself and its corporate parent  Google. 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. In fact, YouTube’s strategy  has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden – and high cost – of monitoring YouTube onto the victims of its infringement.
This behavior stands in stark contrast to the actions of other significant distributors, who have recognized the fair value of entertainment content and have concluded agreements to make content legally available to their customers around the world.
There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process. This is value that rightfully belongs to the writers, directors and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity.
After a great deal of unproductive negotiation, and remedial efforts by ourselves and other copyright holders, YouTube continues in its unlawful business model. Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused."

While there may have been a violation of copyright here, Viacom’s argument is misguided.  The content has received tremendous exposure on YouTube that it may well not have received were the content not on YouTube.  While this is not an excuse for copyright infringement, it is indicative of a dated old media mentality and a lack of imagination on Viacom’s part.  Obviously having the content on YouTube’s servers creates tremendous awareness of Viacom’s content.  There must be scope to monetise that content aside from a lawsuit.  I do predict that this case will settle in the coming weeks.  Viacom will be paid out some large figure and it may even be part of some sort of licensing deal that was likely the objective of the lawsuit in the first place.

(Sources: Lexblog and Yahoo! News)

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