Viacom sues 'GooTube' for $1 billion

Parent of MTV, Comedy Central hits Google with first major copyright infringement suit. Will other media firms follow?

By Paul R. La Monica, CNNMoney.com editor at large
March 13 2007: 1:07 PM EDT
NEW YORK (CNNMoney.com) -- Viacom sued Google and its online video subsidiary YouTube for $1 billion Tuesday, the first big lawsuit against the online video site and its parent for copyright infringement.
Experts predicted more lawsuits to come.

In the lawsuit filed Tuesday in the U.S. District Court for the Southern District of New York, Viacom (Charts), owner of MTV and Comedy Central, said that "almost 160,000 unauthorized clips of Viacom's programming have been available on YouTube and that these clips had been viewed more than 1.5 billion times."

In addition to damages, Viacom said it wants an injunction prohibiting Google and YouTube from further copyright infringement.

Google said that it and YouTube had yet to see the lawsuit but added they feel "confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree."

Viacom first demanded that YouTube take down videos from shows on Viacom-owned networks that were posted on the site without Viacom's consent. Google (Charts) bought YouTube for nearly $1.7 billion last year.
Viacom is the first major media firm to sue Google and YouTube for copyright infringement. Other media companies, including GE (Charts)-owned NBC Universal, CBS (Charts), and Universal Music Group, have decided to partner with YouTube, the world's most popular online video site. But Viacom said that it decided to sue Google and YouTube "after a great deal of unproductive negotiation."

"Obviously, they couldn't come to an agreement. Viacom must have felt its back was against the wall and had to pull the trigger and file a lawsuit," said Barry Cohen, partner in the intellectual property practice with Thorp Reed & Armstrong LLP, a law firm based in Pittsburgh.

While other media firms, notably CBS, say they see promotional value in having snippets of their programs posted on YouTube, Viacom has led the charge against YouTube since it feels entitled to advertising revenues tied to viewing of its programming. YouTube typically serves over 100 million video streams a day.

"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," Viacom said in a statement Tuesday.
Viacom CEO Philippe Dauman told investors at an industry conference last week that traffic to Viacom-owned sites has surged since the company asked YouTube to remove its content.

Industry experts predicted that other media companies might also decide to sue Google and YouTube.

"Every copyright holder has to be seen to defend their rights or otherwise they risk surrendering them altogether," said Brian Wieser, senior vice president at Magna Global, a media buying firm based in New York. "So even where there are minor infractions, if you are not defending a trademark or other copyrighted content, you risk losing those rights. It's too important."

Since Google currently has more than $11 billion in cash on its balance sheet, that also makes it a bigger target for media companies.
"If Google and YouTube don't demonstrate that (they're) taking concerns that media companies like Viacom have by implementing filtering technology and being willing to negotiate fair pricing for distribution and ad revenue sharing, then other media companies will pile on with lawsuits," said James McQuivey, principal analyst for television and media technology with Forrester Research.

One lawyer said the case hinges on who should be responsible for keeping watch over copyrighted content on the Web. Is it the responsibility of sites like Google and YouTube to proactively remove pirated videos or should the onus be on media companies to ask online video sites to take down illegal videos after they've been posted.

"The real question is going to be who needs to do the policing on the Internet. That's what this is a battle of," said Mark Litvack, a partner in the intellectual property practice of Los Angeles-based law firm Manatt, Phelps & Phillips "Do I think this is the last lawsuit? Probably not. Not until the rules are firmly set."

But intellectual property lawyer Cohen said he wasn't sure if other media companies would be eager to sue Google and YouTube, which some jokingly refer to as "GooTube." He pointed out that since several media firms have already partnered with Google and YouTube, they may find that it is wiser to embrace "GooTube" rather than take an antagonistic stance against the online video kingpin.

"You're not going to stop technology. You're not going to stop advancement," Cohen said. "Everyone will keep intense eye on this case but you still have to do business with Google and YouTube since they are the 800 pound gorilla."

YouTube's massive reach, particularly with younger consumers, presents a unique problem for media firms. Even though media giants obviously would like to receive revenue from videos posted on video-sharing sites such as YouTube, getting a video seen on YouTube can lead to increased exposure.

For example, many credit YouTube with the recent resurgence in popularity of NBC's "Saturday Night Live" since the SNL skit "Lazy Sunday" from 2005 became a smash hit on YouTube after it was posted there.
"Marketing people love YouTube and legal people hate it and inside media companies marketing people are actively working with them while legal companies are actively thinking of suing," said Magna's Wieser.

Still, the big media companies are also investing heavily in their own online video sites and are partnering with other video upstarts. Viacom, for example, has purchased iFilm and Atom Entertainment in the past two years and earlier this month announced a deal to allow YouTube competitor Joost to host videos from Viacom-owned networks.

To that end, Forrester's McQuivey said that the lawsuit against Google and YouTube could benefit other smaller online video firms. But it was shame that Viacom and Google couldn't agree on a deal without litigation, he added.

"Now everybody is going to suffer. We are going to tie up the exciting revolution of consumer video in the courts," he said.

Google said, however, that it did not expect the lawsuit to affect YouTube's business. "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," the company said in its statement.

Shares of Google sank more than 1.5 percent in trading on Nasdaq Tuesday morning while Viacom's stock rose nearly 1.5 percent on the New York Stock Exchange.

isn't this just aching for some robin hood related political cartoon to accompany it? i think so. except political cartoons suck nowadays.

Actually, they always did.


As for this, basically, Google.com are right. They take clips down when they're ask, they clearly state that YouTube should not be used to show copyrighted material. I don't see what else they're meant to do. Sueing them is like sueing a paper mill for allowing rude words to be written.

Um, it's the Internet. Viacom is seriously overreacting. This would explain how 70% of my favorite clips are gone now.

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Here's a spoiler for you: Chinese Democracy is shit

*yawn theyre really all the same corporGAYtion sotospeak anyway

Um... so?

i don't think they'll be successful.

it's a good way to go about getting what you want though, they wanted all of their stuff removed, now googles will have to employ just as many people to monitor this shit as there are people uploading it. hilarious!!

way to boost the economy!
yay!

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I was agreeing with you, I think Google does the right thing when they try to regulate videos...I just think Viacom is going a bit apeshit over this. Google/YouTube has always had warnings about uploading copyrighted material.

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Here's a spoiler for you: Chinese Democracy is shit

I'm guessing Viacom and most others like them would like to see the thing closed down completely, or to at least bloody its nose a bit. Despite it being "only the Internet", they probably do lose a buttload of money. If people watch their shows on YouTube, there's a good chance they're not watching them on TV. Thus ratings loss, thus less advertising revenue coming in during that slot, thus bye bye show.

I understand, I totally see why they are suing...my comments are probably based more on personal frustration than logic...because they removed all of my favorite Chappelle's Show moments.

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Here's a spoiler for you: Chinese Democracy is shit

Much like the movies and music they're freaking out over. We should really get a consumer act together that states a 'This shit sucks' clause to buying anymore CD/DVDs. Opened or unopened, if it sucks, you get your money back.

I'm not going to speak for everyone, but I do not generally watch entire shows online. I like my television for viewing stuff in full. I do like to watch bits of shows online sometimes--like my favorite bits from The Daily Show, etc.

My experience has been that the full shows have tended to be taken down, with the "funny moments" being left up. But that's entirely at the network/programme maker's discretion. Some, like Comedy Central, don't really bother taking anything down (South Park is an example; most of the episodes are readily available, and the sites they can be found at are well established enough that there's no way they don't know about it). Personally, I will watch whole episodes of things like Family Guy on-line, but I have the excuse that I will buy the DVDs. The show's makers acknowledge that they do much better from DVD sales than they do from airing the show (which is basically an advert for the DVD now; they deliberately make stuff that can't or won't be aired to provide an incentive to buy), and that most people who buy them - and thus provide their income - don't ever watch the show on television. I think they said it was something like 60%. I don't know if they include those who stream the show in that, but even if they don't, it's a sizeable chunk. Eitherway, it makes sense for them to allow their stuff to be on-line, if only for a short while, as promotion.

But yeah, basically it's the copyright holders' choice whether to pursue a copyright issue and to what degree. You're throwing yourself on their mercy if you put clips of their shows up, but I'm pretty sure no-one is so naïve as to be unaware of that.



If I had this kind of power, I'd use it to get rid of all those awful "fan manga edit" things, where they dub South Park dialoge onto Itsumo Joji-Xtreme 23 or whatever for no apparent reason. Seriously, that shit is the gayest.

They're doing a Lars Ulrich. And considering most other companies have started using youtube themselves i wonder what youtube wouldn't agree to with viacom? As far as i know all viacom owned videos have been removed and are still being removed. God knows i wouldn't want that job

Oh right. So that's kinda weird, didn't realise Viacom owned Comedy Central, they seem to have been letting people get away with posting up CC stuff for ages.

since youtube sold out to google, it will forever be spiraling into the shitters.

If I watch a television show I usually watch it in full... I like youtube cos you can see stuff you missed or stuff that's not going to be repeated for a while. Actually I used to send clips of funny stuff from Chapelle's show to friends if I was referencing something that they hadn't seen I'd just send the clip.
Youtube actually probably caused more people to watch stuff from comedy central because if they liked what they saw they'd be more likely to tune in on tv. It was free advertising.