Viacom Confronts YouTube

Viacom (VIA) sues Google (GOOG) over YouTube. Read the WSJ clip:

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After months of negotiations that failed to produce any settlement, media giant Viacom sued Google and its recently purchased YouTube unit, alleging that the immensely popular video-sharing Internet site engages in “massive intentional copyright infringement.” The suit, filed in a New York federal court, seeks over $1 billion in damages and an injunction preventing Google and YouTube from further copyright infringement. It comes weeks after Viacom demanded that all its content be removed after the two sides failed to reach a distribution accord. Viacom, parent of MTV Networks and Comedy Central, claims that more than 160,000 unauthorized clips of its programming have been posted on YouTube, that the company and its parent have done a poor job of policing the site for any violations, and that settlement talks have been “unproductive.” Viacom charges YouTube with building “a lucrative business out of exploiting the devotion of fans to others’ creative works in order to enrich itself.” Other media companies have clashed with YouTube on copyrights, and some, such as CBS and General Electric’s NBC Universal, reached licensing agreements.

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This is an absolutely EXCELLENT piece of news. In general, Google’s practices related to online advertising are extraordinarily cavalier, paying little respect to those thoughtful and creative minds, hearts, and souls who actually invest energy, time, money in producing and publishing content. They pay hopelessly little to the publishers who use AdSense.

YouTube is the absolute extreme of this sort of malpractice, a parasitic existence of sorts, violating copyrights rampantly, and thriving off other people’s carefully and expensively produced shows.

No, I don’t want YouTube to go out of business. Neither do I want Viacom to go out of business. What I want to see, as the market becomes more efficient, is a win-win eco-system business model develop between content producers, portals and ad networks, such that everyone makes their fair share of money in the process. Not just Google.

The reason I am ready to celebrate Viacom’s bold, sharp move, is that it will make Google sit up and hopefully start behaving. I assume, they will settle the suit with a licensing agreement. That is not the big issue. The big issue, however, is that through this and other steps, the industry will develop its sustainable business models.

Disruptive technology alone certainly does not give any innovator the license to apply their technology freely. Einstein was quite sad about his part in the atom bomb.