Seven years ago Viacom (VIA) demanded $1 billion from Google (GOOG) because YouTube was rife with videos that had been posted without regard for Viacom’s copyrights. The two companies finally settled the dispute on Tuesday, with Re/Code reporting that no money changed hands.
In a sense, Viacom finally gave in after signs mounted over the years that it wasn’t going to win. A judge ruled in 2013 that it was Viacom’s responsibility, not Google’s, to find the offending videos.
The settlement is also a sign of the times. Back in 2007, YouTube seemed a threat to content owners. Now it seems to be an opportunity that contains some threatening aspects. When Viacom filed its initial suit, Google had just begun to experiment with YouTube ads, and the entire online video advertising industry brought in about $580 million, far less than what Viacom itself made from advertising for its media networks. This year, video advertising, as a whole, is expected to be 16 times the size it was seven years ago, and companies such as Google are hard at work coming up with viable alternatives to traditional television models in the hopes of grabbing a bigger share.
Media companies are wary—and maybe a little intrigued. Last summer Viacom reached a preliminary agreement with Sony (SNE) to stream its programming. While little is known about the deal, it certainly seems as if Viacom will be working with Google and its video-sharing ilk a lot in the near future. “This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together,” the companies said in statement.
It’s not all good feeling and fellowship. Media and tech companies had a bitter fight over federal legislation to address copyright issues in 2012, and the tension hasn’t completely subsided. This week marks the beginning of discussions between the industries, facilitated by the Department of Commerce. The goal is to come up with a better way for copyright holders to convince Internet companies to take down infringing content. Representative Jerrold Nadler (D-N.Y.), who sits on the House Judiciary subcommittee focused on intellectual property issues, said Congress would step in if the two sides can’t find a way to work together. “You can amend the statute, in what way, we’re just beginning to explore,” he told the Hill, but “it’s better if they came to an agreement.”