Written by Liz Gannes
Posted Tuesday, March 13, 2007 at 7:50 AM PT

 

Viacom Sues YouTube for $1B

Viacom sued YouTube and Google today, seeking an injunction against the video site’s display of copyrighted materials and more than $1 billion in damages for 160,000 copies of its content on the site seen 1.5 billion times.

In a press release accompanying the lawsuit (download full lawsuit here), Viacom said,

“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.”

Viacom had previously demanded Google pull more than 100,000 clips from YouTube seen 1.2 billion times, an order YouTube had complied with, though the accusations appear to have risen in size since then. Viacom has also announced it will be sending its content to emerging YouTube alternative Joost.

YouTube has yet to formally roll out any copyright filtering technology, something the site promised it would do before the end of last year.

Just last week, video site Bolt settled a similar lawsuit for approximately $10 million with Universal Music Group, something it had to sell itself to GoFish in order to manage.

Update: Reuters has a report out as well

Update 2: Google’s response, as quoted on various sites:

We have not received the lawsuit but are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree. YouTube is great for users and offers real opportunities to rights holders: the opportunity to interact with users; to promote their content to a young and growing audience; and to tap into the online advertising market. We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube and its ability to attract more users, more traffic and build a stronger community.

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Topic: Legal, Money & Power, Networks & Studios, Online Video

Comments (11)

  • of course, they sued them. young companies innovate, grand old companies litigate.

    Om Malik, NewTeeVee — 8:08 AM on March 13, 2007 Reply

  • How exactly is it innovation to give paid content away for free with no ads. Kazaa (and torrents blah blah) do it well. Youtube simply had the pockets to scale the network to handle the incoming traffic.

    That almost directly contradicts your other article.
    http://gigaom.com/2007/03/13/free-a-tactic-not-a-business-model/

    It is pretty clear now youtube has very little watchable user generated content, and quite a bit of content from media companies.

    anon — 8:23 AM on March 13, 2007 Reply

  • Actually, MTV/Viacom could have done the same thing – profited from this whole movement and instead they sat on their asses and now are litgating.

    Look they could have made money from this, been more proactive about this and instead of fighting YouTube, they could have gotten a piece of the pie.

    Viacom has all the assets and they can monetize them whenever they want – free but ad supported. they could have but they didn’t.

    this is nothing to do with “free” article. why because it is simple – the youtube folks put up ads and got paid for their part of the business.

    i agree, content infringement is not a good thing and it should be stopped. why sue them now – like almost a year after the two companies started negotiating? why now? Google dollars!

    Om Malik, NewTeeVee — 8:45 AM on March 13, 2007 Reply

  • Whether or not content infringement is good — the decision of the case will have to set a precedent for all the other small and large companies dying to get a small slice of youtube dollars for users posting their copyrighted content. It’ll be interesting to see how it plays out. It could open the floodgates?

    Chris — 8:53 AM on March 13, 2007 Reply

  • There is a larger issue at play here — which is that content owners want to monetize their assets themselves as opposed to having other people take a cut of the pie.

    The days of companies making money without paying for it are gone – basically YouTube got $1.65B without paying the folks who made them successful.

    In my opinion, this will change going forward.

    Sameer Mithal — 8:58 AM on March 13, 2007 Reply

  • I was just talking to my non-techie friend last night, trying to explain the sheer number and variety of video sharing sites, and it hit me — what’s the value of YouTube beyond all the copyright infringing content on the site?

    It’s not a particularly innovative site in terms of social features, the content that people post to the site isn’t as good as what you can find on Blip or Revver, there are few if any ways to make money on your own content at YouTube, and the quality of the actual video…don’t get me started.

    YouTube offered a great search engine for old and new clips from television, film and the like. Take away all that content, and you’ve got yourself ‘yet another video sharing site.’

    I’m not saying Viacom is right in bringing suit (in fact, doesn’t the DMCA explicitly protect YouTube from this very litigation?) — but seriously, I’m not really sure what Google was thinking when they bought it.

    Jackson West — 9:14 AM on March 13, 2007 Reply

  • I have no problem with this suit. If you remember back to the months before Google purchased YouTube, most analysts and bloggers were expecting YouTube to be out of business in a number of weeks due to either ligitation or bandwidth costs.

    I agree with the points on the content. Once you get past the copyrighted material there just is not much there.

    Content producers need to be protected. Say all you want about Viacom being a slow, tired old media company. Some of that is true but some of that is that these guys play by the rules (for the most part) and were trying to figure out ways to make sure everyone gets paid. Not out of the goodness of their hearts, but also to insure that they got paid.

    http://www.hungryflix.com is trying to build a community of great content, that is accessible and compelling. Content providers are our bread and butter and we will ensure that they are taken care of.

    Brian Andrews — 9:22 AM on March 13, 2007 Reply

  • Actually, MTV/Viacom could have done the same thing – profited from this whole movement and instead they sat on their asses and now are litgating.
    —(1)>
    See my above comment, the service gootube is a free “hosting service”, as you stated in the other article. As such it has no business model. Gootube will have to jump through quite a few hurdles (legal/licensing) to put ads up.

    Cuban has actually made the interesting point that Gootube uses safe harbor previsions designs for hosting services, but does not actually operate with a hosting business model.
    http://www.blogmaverick.com/2007/03/08/supoenas-and-gootube/
    “Contrast that with Gootube that flaunts their position that when pirated content is hosted on Youtube or Google Video, they are legally safe. ” ( in the context of comparing actual hosting services with infringing material to gootube services)

    Last I heard, MTV/Viacom are not in a charity business. Their business is content, so of course they will go to great lengths to protect the loss of control over that content on a large scale.
    /—–
    Hence, the new comedy central as you have reported in the Newteevee section of your website. Users can now get most of the same clips for embedding on their websites.
    http://newteevee.com/2007/03/02/viacom-online-jumps-after-youtube-split/ (In your own words).
    /—–
    Look they could have made money from this, been more proactive about this and instead of fighting YouTube, they could have gotten a piece of the pie.
    —-(2)>
    You know the licensing deals offered to Viacom by Gootube for their own content?(or what they have shown publicly is static?) Interesting.

    —->
    Viacom has all the assets and they can monetize them whenever they want – free but ad supported. they could have but they didn’t.
    —-(3)>
    Variation of above— You know the strategy Viacom has?(or what they have shown publicly is static?) Interesting.
    —->
    this is nothing to do with “free” article. why because it is simple – the youtube folks put up ads and got paid for their part of the business.
    —–(4)>
    It has everything to do with it. No way the ads covered hosting then or now. It is another sign of the bubble.
    + Who cares if it is evil, lets get a lot of eyeballs. (:P at copyright holders, content providers. Up next Google Print!)
    If (Youtube == Napster++)
    print ” We are in a bubble!n”
    .
    ——>
    i agree, content infringement is not a good thing and it should be stopped. why sue them now – like almost a year after the two companies started negotiating? why now? Google dollars!
    ——(5)>
    Yeah of course, but if you get large enough off of copyright infringement it is OK.

    Don’t Google dollars spend the same if found in the pockets of a google lawsuit?

    There is still going to be a problem if google won’t pay you what you think you are worth, AND removes the concrete for the long-term errorsion of your cable and online brands.

    It would be foolish to settle for less than your market projections. (At the same time Google has a strong incentive to UNDER pay, after all they do not want competition from content holders that would make their expenditure on Youtube only about furthering “video search.”)

    ———–THE RESULT——–!
    Viacom does NOT want to look back like Yahoo (Search is Dead! and not buying google for 5 billion or there abouts), and see that they passed the keys to google for peanuts on a long term deal in a market not yet clearly defined. I would think this was obvious.

    anon — 9:32 AM on March 13, 2007 Reply

  • There would never have been a need for YouTube if MTV wasn’t the unadventurous, RnB fixated, unadulterated rubbish it is these days. Most of the MTV content on YouTube is from the “good old days” when said channel actually made some kind of effort to introduce NEW music.

    heshter — 10:10 AM on March 13, 2007 Reply

  • I know a of CEOs of a online content services and he told me the eyeballs from YouTube are just not profitable at the moment and is one reason his service never bothered launching a consumer ingestion platform ,which gets back to the question What is the value of offering Free content? .

    Then there is the issue of advertisers not wanting to have thier products associted with content that may not be in line with the companies policys or interests .

    Matt_ — 11:31 AM on March 13, 2007 Reply

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