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SueTube
I realize that the $1bn lawsuit that Viacom filed against Google and YouTube today is all about negotiating leverage.
But I for one hope that this suit doesn't settle.
I want to see Viacom prove the 'massive and intentional copyright violations' accusations in front of a jury of reasonable people.
Given the number broken links we all experience on YouTube due to take down requests, I have a feeling that Viacom's case isn't so open and shut.
Google has billions of dollars to defend itself. I'd like to see them use some of it. This is not Napster all over again by a long shot as much as Viacom would like it to be.
March 13, 2007 Venture Capital and Technology | Comments (22)
Comments
I have always thought that owning the litigation around online video was the whole point of Google buying YouTube.
We're still suffering over the mishandling of the Napster litigation.
Posted by: Erik Schwartz | Mar 13, 2007 3:16:47 PM
I think it's clear that YouTube could prevent the copyright violations taking place right now if they wanted to. Have you ever seen any porn on YouTube? I haven't - seems to prove that they have the way where there's the will.
Posted by: Rockwell | Mar 13, 2007 3:22:38 PM
I'm ready for some kind of Betamax reaffirmation decision.
If Google fights this [Please please please do!], it's going to be another 2 years before anything comes of it.
What is the mediascape going to look like then?
It's wild to be living this and see these grating, crunchy structural changes happening right in front of our eyes.
Posted by: EthanB | Mar 13, 2007 4:05:36 PM
Rockwell--great point.
Posted by: Andy Swan | Mar 13, 2007 5:19:55 PM
as our host points out this IS about negotiating leverage. another few hundred mil of hard cash in the bank for sumner and then a boffo agreement to put viacom content on youtube. which as i understand it would be a "new" media company paying an "old" media company real money (not linden dollars or any such thing) to essentially advertise the "old" media company's content. i suspect we all remember what amarillo slim said about rubes and tables. this will never go to court. just like napster - google could never afford for this to happen. besides the law, there is just way too much schadenfreude karma lined up against them.
on the other hand if they do a deal with google what happens to the joost deal? hopefully nothing. at the end of the day content is not automatically free unless the author or owner says it is. maybe we will start to get some competition amongst diffenrent content models and the market may show us the way out of this DRM mess.
Posted by: ming666 | Mar 13, 2007 5:42:26 PM
The porn argument is bogus. You can set up simple-to-follow rules for determining whether something is porn or not.
But if I show you 100 videos of car chases, can you tell me which ones were created by the person who posted them?
Posted by: Matt Gifford | Mar 13, 2007 7:11:46 PM
This is entirely negotiation leverage. Without a potentially crippling lawsuit, all Google can say is "here is the offer, take it or leave it" and they continue doing what YouTube does best: employ the Safe Harbor provision. With a lawsuit this large, Google now has to consider Viacom's terms. The tables are turned, that is if Google decides not to fight it.
If they do fight it, I agree that a jury would be on YouTube's side. Think about it, what percent of a potential jury would have at least used YouTube and thought it was an amazing service? Probably most, if not the entire jury.
If these media companies spent as much time innovating and discovering ways to monetize new media (like Google) as they do in creating these lawsuits against them, then maybe their bottom line would actually increase.
Provide value to the consumer maybe?
Posted by: Sam Tarantino | Mar 13, 2007 9:11:38 PM
Time to roll out www.piratetube.com :)
Posted by: Diego | Mar 13, 2007 9:41:20 PM
As much as I'd like to see the decision, it is highly unlikely this gets litigated - but not because Google wants to settle. This is most certainly a negotiation ploy - there's no way Viacom would risk an affirmative decision allowing YouTube-style use for all those without Google's war chest.
Posted by: Tim Marman | Mar 13, 2007 10:42:19 PM
I couldn't agree more, "this is not Napster all over again by a long shot". There are many very compelling legal arguements that should be revisited and thoughtfully presnted before the courts - hopefully reaching all the way to the Supreme Court. The fact is technological advancements are occurring far too rapidly for our cumbersome court system to even remotely keep pace with. So, although unfortunate for anyone to be involved in litigation - let it be Mega Corporate Giants such as Google and Viacom who have the deep pockets and each with an army of attorneys to represent all sides of the debate. The most articulate post I have read on discussing the MGM vs. Grokster case can be found at:
http://www.law.com/jsp/article.jsp?id=1122023112436
Posted by: Brent | Mar 13, 2007 10:55:13 PM
"But if I show you 100 videos of car chases, can you tell me which ones were created by the person who posted them?"
Video anti-piracy software exists, so in theory, yes.
Posted by: Rockwell | Mar 13, 2007 11:16:02 PM
Google wants this fight.
Only recently has ABC started releasing some, not all, of its video online. Is viacom? I doubt it. If they offered their product through the medium their consumers are demanding it they wouldn't have a loss of viewers. Has anyone done a study to see what if ABC share of youtube representation is less then other similar networks?
Posted by: Jamie | Mar 13, 2007 11:43:32 PM
Rockwell, would you mind backing that statement up with a link?
Posted by: Matt Gifford | Mar 14, 2007 12:09:51 AM
Viacom committed suicide in launching this suit against google. At least they won't suffer very long.
Posted by: tomo | Mar 14, 2007 3:17:31 AM
The most galling thing about this suit is its claim that most of YouTube’s $1.65B value comes from Viacom clips.
That’s just ridiculous. Viacom itself claims only 100,000 clips. YouTube hosts two million new clips per month.
Posted by: Mike Abundo | Mar 14, 2007 5:16:34 AM
The big difference between this case and the Napster case is the solvency of the defendants.
Napster had $13M on Hummer Winblad's money and large negative cash flow (not counting legal bills).
Google has ~$10 Billion in cash, an in house legal team that loves a fight, and has such strong cash flow that the money is piling up in giant warehouses.
Viacom can't kill Google with the death of 1000 cuts. There's no clock ticking on when Google needs to finish this by or they have to turn off the lights.
Posted by: Erik Schwartz | Mar 14, 2007 7:47:04 AM
its time to temper the grisham fantasies of jury nullification regarding shiny gootube and the big bad ugly viacom. this is a property rights issue pure and simple. if this goes through the courts and ultimately ends up on the floor of the supreme court, given the current precedent & state of the law, google will lose. my bet is that this will never end up in court - viacom will be paid off. and by the way - money has nothing to do with this. Google could be flat broke and you would find A list litigators falling all over themselves to take this case.
The court could throw a curveball and make a ruling ala Kelo and try and legislate from the bench for the greater good. i doubt that would happen and if it did the issue would flip back to the state and federal legislatures. it will be interesting to watch the money and lobbyists do battle.
I love youtube - think it is tremendously clever. I loved napster (pre-gelding), thought it was tremendously clever. however, the adult world intrudes and as my attorney wife pointed out to me 10 years ago when i was showing her this cool new business called Napster she said, "doesn't that violate copyright law?"
oh yeah. duh.
Posted by: ming666 | Mar 14, 2007 8:22:50 AM
Money has everything to do with it Ming. But it's not the cost of the litigation.
Napster raised $13 million.
I don't know what their burn rate was but they had a lot of people there. I'd be stunned if it wasn't north of a million dollars a month.
While there was an active court case in place, there was no way Napster was going to raise more VC money (HumWin ended up getting sued too).
Of course you're right that this won't end up in court and will get settled. But there's no ticking clock of making payroll sitting over Google's head. Google doesn't need to settle fast, they can negotiate a deal on better terms.
Napster got a crappy settlement (and screwed up online audio for everyone) not because the litigation was necessarily bleeding them dry, making payroll was bleeding them and they had no way of raising money until the lawsuit went away.
Posted by: Erik Schwartz | Mar 14, 2007 10:39:40 AM
I predict Viacom will not settle. (And should not.) Why? Because in the end no content or intellectual property creator wants to let the Safe Harbor provision of the DMCA continue to a loophole big enough to fire a Saturn V through, an open invitation for piracy, and IP violations.
Yes, I too love YouTube. But since when does that mean its the right thing to do under law? Since when does mob emotion outweigh the rights of minorities (e.g. property owners)? Lots of people like looting. Lots of people would like to arbitrarily redistribute your personal net worth. Should we make that legal?
I predict the Safe Harbor provision of DMCA is doomed, and I for one, can't wait. We need to replace the DMCA language (almost ten years old now) with forward-thinking law.
Posted by: Grand Egress | Mar 14, 2007 12:12:11 PM
erik i believe my point was that it doesn't matter how much money youtube has in the bank - like napster - cases destined for the supreme court get supreme court talent. if i remeber correctly napster was repped by David Boies of Cravath - veteren of IBM antitrust, msoft, etc. - at the end of the day this is all about money. some folks have tried to put forth the argument that its not like napster since it is the user & submitter of the clip that is violating the copyright. so then we are to assume that youtube should be held harmless and we will all go on our merry way since this is web 2.0 and look how many downloads there are per day. having watched justices like scalia at work, the day would end pretty quickly. youtube might find itself being judged and "constructive nuisance" and shut down in short order.
I think the danger in all of this is the hubris factor - which both parties have no short supply of. also with unlimited resources the legal actions will be like an exchange of nuclear weapons - with each throw it will get worse and worse. the collateral damage will begin to bite.
Since congress makes law, i lay this mess at their feet. Stop doing the celebrity hearings and get down to crafting some law. vote on it. get it signed. run it through the courts, - you know how it is supposed to work. if this this goes the distance it will hurt everyone.
Posted by: ming666 | Mar 14, 2007 12:41:49 PM
@Sam,
"If they do fight it, I agree that a jury would be on YouTube's side. Think about it, what percent of a potential jury would have at least used YouTube and thought it was an amazing service? Probably most, if not the entire jury."
Is not relevant. It doesn't matter whether jurors would find the service interesting. It's a question of whether it abides by the law or not.
Posted by: ChrisD | Mar 14, 2007 12:58:44 PM
Hi Fred – while pondering how this lawsuit affects the opportunities for investors I hit a hypothetical question that I’m curious to hear your thoughts on. Specifically, if a VC backs a video sharing site AND a content protection company (like Audible Magic, Advestigo, iPharro, etc) they appear to be complementary companies but practically it could cause some conflicts of interest. Have you encountered any situations like that and do you agree it’s a problem?
http://www.libraryhouse.net/blog/2007/03/16/viacom-more-than-a-lawsuit/?s=fd
Posted by: Scott Eblen | Mar 16, 2007 6:39:55 AM
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