Numberscruncher: Viacom Sues YouTube

Written by Current Events, Numberscruncher

A video that always makes me happy, and violates Viacom’s copyright:

[kml_flashembed movie="http://www.youtube.com/v/vgMgLjMghuk" width="600" height="344" allowfullscreen="true" fvars="fs=1" /]

YouTube is taking another round of fire in the ongoing debate about intellectual property rights. Earlier this month, the court documents in an ongoing copyright infringement suit between YouTube and Viacom were released.

Neither side looks good. The Google team apparently acknowledged that the reason for the site’s being was the distribution of pirated video. Viacom’s legal team wanted all of its content pulled, but enough folks at the company knew that there was publicity value to posting clips. Contractors from the company’s PR firms allegedly went to Kinko’s to post material to YouTube, in some cases after altering it to make it look amateur.

After all, online video is a powerful form of promotion. It introduces people to new artists and new ideas that they might not find out about otherwise. (Gawker had a great piece on how people can learn about great rock artists from online video.)

It boils down to this: Viacom’s management saw the value in having its videos in circulation, but not all clips and not forever. YouTube’s management knew that a lot of the material on its site violated intellectual property rights, but it had few good mechanisms to allow creators to control the release of the work. You’d think someone could come up with some good policies and maybe even make money off of it, but we’re not at that point yet.

Viacom has another problem, though. The company controls the content that it produces, but it has less control over the distribution. Much of its programming is on cable television. Cable companies pay to carry MTV, Comedy Central, and Nickelodeon, while advertisers pay for time on Viacom’s networks. And, cable television is going to go away at some point very soon. Technology is changing, and no one likes dealing with their cable company. It won’t be too terribly long before we all function with wireless Internet access and the idea of paying for video content is ludicrous.

Demand for content is strong, but creators have to be paid or they cannot continue to create. Jon Stewart and Stephen Colbert make decent salaries, I’m sure, and both have rafts of co-stars, writers, producers, camera people, and stage managers who make their shows work. That takes money. Stephen Colbert is not working for “exposure”.

Viacom’s executives can look to the newspaper industry to see what happens if the delivery system is free so that there is no money left for content. Demand for news remains as strong as it ever has, but the business model changed completely. Newspapers do not know how to make money without pages and pages of classified ads printed on dead trees. They lay off reporters, close bureaus, drop funnies, and stiff freelancers, all of which leads to less content and less profit.

Some of Viacom’s shows and movies have a robust DVD market, but not all. Children can watch SpongeBob SquarePants forever, but Jon Stewart and Stephen Colbert trade in current events. Their jokes lose some punch over time. Likewise, some New York Times photographs look nice framed and hanging in an office, but that’s not really a long-term revenue source that can support reporting on six continents.

Hence the lawsuit. Hence the ambivalence. Hence a few more years of trying to sort out what this means.