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Now Taking Bets On How Long Before YouTube and Viacom Kiss And Make Up

Posted by: Jon Fine on March 13, 2007

The first shoe drops: Viacom sues YouTube for a billion-plus dollars, claiming “massive, intentional” copyright infringement.

Is it the last shoe to fall? Probably not. Is this the end of YouTube? No way.

I should probably get out of the prediction game once and for all, but what I keep coming back to is this:

1. No network—or networks—will be able to build a YouTube on their own

2. The ancillary traffic to Viacom clips will always be much greater at YouTube than it would be at any Viacom or Viacom-plus-whoever-site; control as the networks once understood it is over, etc.

3. Thus, it would make sense for Viacom to partner with YouTube, and especially to partner with a company that’s proven adept out of putting a system to target ads around truly massive traffic … .hmmmm … now who would that be?

4. Google/YouTube have a strong incentive to make the big network players happy, unless they want a million other suits like Viacom’s.

5. The real threat isn’t YouTube, the real threat is file-sharing from millions of other sites like dailymotion and liveleak and on down the line. Cutting a deal with Google/YouTube removes much of the incentive to check Viacom clips out on any one of those sites—and it makes Google an ally in that fight.

6. The networks need the money, and eventually Google/YouTube will, too.

Everyone needs each other too much. This is why ultimately I regard Viacom’s move today as a harder-edged negotiating tactic. Things have escalated beyond the grumbling-in-the-press stage. Which means that things are now about to get really interesting.

Reader Comments

Drew Robertson

March 13, 2007 2:03 PM

It's not negotiating. Rather I think Viacom has decided that it won't stay at the top of the media food chain as long as Google/YouTube is around. From VIA's perspective, it's infinitely better if there are dozens of video distributors rather than one big GOOG. I think they are in this to cripple or kill.

Pierre / Citronjaune

March 14, 2007 10:56 AM

Why is Dailymotion a threat? They signed with majors and delete videos as Youtube...
The real threat is coming from content owners themselves who don't want to contract deals.


March 14, 2007 1:11 PM

This litigation is perhaps only temporary.. Trying to stop the flow of video media via the internet is ilke trying to stop the flow of the greatest of rivers.


March 14, 2007 3:15 PM

I'm glad that a hip content owner like Viacom (Daily Show) is aggressively dealing with advertisers like YouTube trying to sell ads for shows they don't create. Youtube absolutely has to sit at the table with these folks for an equitable solution. I want youtube to survive, but if they somehow don't then will become an index to all the content creators' websites and therefore, just the same as Youtube is now. I'm a heavy user and Youtube has added no value to these videos, unlike Flickr which is a new way to look at images online. I'm a programmer and programmers I know are up in arms about this case because they want billion dollar deals like the Youtube sale and don't want that money going to the entertainment business and not the computer business. Well, who doesn't, but that doesn't mean that people can make movies with music from a recording artist in the background without licensing it, even if they're adding value or if it increases sales. I can say that I've never purchased anything from clips I've seen on youtube and I doubt that more than a few people have. Online video replaces the need to purchase, it doesn't encourage purchasing. I have a friend who canceled his cable and just watched clips of the daily show online. It's quite literally removing money from that revenue stream and as such, it needs to partner, not assume ownership. Passing off the responsibility for the licensing to the account holder doing the uploading is immoral. Just wait for the first skinhead or other awful film with a major artist's music gracing awful images.

josh Camarillo

December 2, 2007 8:31 PM

For the sake of the viewers, i hope Youtube tells Viacom to shove it up their asses. Because that's essentially what Viacom did to THEIR viewers. MTV shouldn't even be called MTV anymore, because they sold out and flooded the timeslots with bullshit shows like "My Sweet Sixteen" and others. It's like a meat grinder for the minds of our youth, and it's already apparent that they're idolizing the rich and spoiled characters that they see in these shows. TRL counts down the top videos of the day, but they don't even play the whole video, because Viacom would rather fill the airtime with shameless marketing. Viacom has lost its credibility. I hope they take it directly up the ass from GoogTube.

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The media world continues to shapeshift as new forms arise and old assumptions erode. On this blog, Bloomberg Businessweek will provide sharp analysis and timely reports on the transformation of this constantly changing terrain.



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