While I'm at SXSW with thousands of earnest techies trying to change the world one Twitter at a time, Viacom had to go out and get all old media on Google/YouTube. Since everything has already been said by everyone else, let's review the best reactions.
But, even before we get there, we can look back at an op-ed by EFF attorney Fred Van Lohmann in the Hollywood Reporter that laid out YouTube's legal defense against lawsuits in a straight-forward, easy to understand way for non-lawyers. Lohmann may work for an organization that some view overly strident, but, while they may disagree on points, he seems to have the respect of even those most anti-YouTube (see Mark Cuban). Lohmann wrote last July...
YouTube has an important legal shield that was not available to the old Napster: the so-called "online service provider safe harbors" created by Congress as part of the DMCA. One provision, Section 512(c), was designed to protect commercial Web-hosting services, which feared they might be held responsible for the posting habits of their customers....
...Because YouTube essentially stores material at the direction of its users, it can find shelter in the same safe harbor that Web-hosting providers do.
The safe harbor works like this: So long as YouTube plays by a few rules, content owners can't collect damages from it, even if its users infringe their copyrights.
Rule No. 1 is the implementation of a "notice and takedown" system to respond to infringement notices from copyright owners. YouTube, of course, has this in place and takes down material once properly notified by an owner that a clip is infringing. Section 512(c)(3) sets out exactly what a copyright owner must include in a takedown notice. (Note to content owners: If you use takedown notices to remove noninfringing content, you can be sued by YouTube or its users for abusing the system!)
The safe harbor will not protect a Web host if it is "aware of facts or circumstances from which infringing activity is apparent" â in other words, if you make your living providing hosting services to pirates-R-us.com, don't look to the safe harbor for protection. YouTube doesn't appear to be sheltering any obvious pirate fleets, so this shouldn't be an issue.
A hosting provider also loses the safe harbor if it "receives a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity."
Here's where things might get a bit sticky for YouTube....
And, indeed, no matter what you might think about the lawsuit, getting sued by a big media company for a billion bucks is a sticky distracting proposition that has a real perceptional impact on your business. As a communications consultant, it will be interesting to see if Google can keep from getting too defensive about the suit and play effective offense on (re)defining the most mutually beneficial future of Internet video. While the suit isn't Napster all over again (for, one, the unprofitable Napster was sued by the RIAA for $20 billion), the issue of dealing with a major lawsuit as you try to effectively compete in a market that changes by the week is very similar. Already, a Google statement says that the suit will not be a distraction.
But, enough of what I think. Let's take a trip around the Web for reactions....
Google Watch lays out Viacom's arguments in digestible bullet points.
Jeff Jarvis says Viacom really has an issue with their own viewers...
Viacom complains about YouTube but, in truth, theyâre complaining about their own viewers. They whine about theft but, in fact, theyâre whining about recommendation, about their audience finding them more audience. Viacom is trying, singlehandedly, to turn the TV industry into the music industry. They are trying to spread stupid. From the complaint, notice what theyâre really complaining about is their fans
VC Fred Wilson, for one, sure hopes the 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.
Public Knowledge made this statement on the suit:
Without commenting on the specific allegations involved, we note that simply because material is âunauthorizedâ does not make its use illegal. There are limitations to copyright law, known as fair use, that do not require the copyright ownerâs permission before use of a work. Many of the users of YouTube who have posted short clips of main-stream mediaâs works have done so using their fair use rights, for reasons of criticism, comment, education, and news reporting.
We are confident YouTube and Google will continue to take appropriate actions in accordance with the safe-harbor provisions of the Digital Millennium Copyright Act (DMCA). By a previous request of Viacom, YouTube has already removed some 100,000 clips.
Public Knowledge also posts a video the CBS' boss praising the value of YouYube. (CBS split from Viacom).
Jim DeLong at PFF says he can "feel Grokster II coming on."
TechDirt ponders the supposed damage in question....
The suit illustrates Viacom's misunderstanding of the web and YouTube: its claim for $1 billion essentially says that's the amount of money it thinks it's missed out on because of YouTube (just to put it in perspective, Viacom's 2006 revenues were $11.5 billion). That's pretty ridiculous, and should Viacom's own video site ever become popular enough to deliver similar viewer stats, the revenues it generates will underline that. What's more likely to damage Viacom's business is removing the clips from YouTube, since it offers a free promotional outlet -- something other broadcasters have noticed -- that may not directly generate revenue for the company, but indirectly drives viewers to its revenue-generating products.
Liz Gannes at NewTeeVee agrees and reminds Viacom that YouTube only made $15 million in revenue last year.
Michael Arrington counters that this doesn't look so good for Google and that they are going to have to pay-up one way or another...
Thereâs no way this gets settled with Google paying any actual damages. Google will be furiously working to sign a deal with Viacom to get this lawsuit to go away and a licensing deal in place. Theyâre on a very slippery slope right now, with the Napster carcass lying limp at the bottom.
Cynthia Brumfield makes the excellent point that Viacom has their own Web video properties that rely on the DMCA for safe harbor and discusses...
There is nothing in this complaint at all about the DMCA and whether YouTube is violating that law, which protects websites from infringement liability if the sites comply with rights holdersâ take-down requests. Which is ironic and a sloppy oversight indeed because Viacom itself relies on the DMCA as protection against infringement lawsuits across a dozen or so video sharing sites that it owns.
Take, for example, Viacom-owned Atom Entertainment, which runs a video sharing site. AtomFilms has a special section for users entitled notice of infringement, which cites the DMCA.
Atom Entertainment, Inc. will investigate notices of copyright infringement and take appropriate actions under the Digital Millennium Copyright Act, Title 17, United States Code, Section 512(c)(2) (âDMCAâ). Pursuant to DMCA, written notification of claimed copyright infringement must be submitted to the following Designated Agent for this site.
Does Atom Entertainment fail to actively and repeatedly sweep its uploaded user submissions for copyrighted content, an allegation that Viacom levels against YouTube in its complaint? I would bet a lot of money that Atom doesnât take the proactive steps to prevent infringement that Viacom demands of YouTube. Why? Because the law doesnât require it.
What about iFilm, another Viacom-owned video sharing site, which also relies on the take-down provisions of the DMCA? Are any iFilm employees aware of copyrighted content that is uploaded to the site, content that may stay in iFilmâs archives until a take-down notice appears, which places an impossible burden on copyright holders? Viacom says that YouTube relies on this impossible burden to get rich.
If YouTube is violating the law, so is Viacom. Or is it just a question of degree? YouTube is phenomenally successful while Atom Entertainment and iFilm are not. Can a judge enjoin YouTube from the same behavior he or she would permit for Viacom?
Paid Content provides a timeline of YouTube/Viacom interactions and links to past stories.
Henry Blodget says all this isn't a big deal, anyway...
The bottom line: If/when Google finally makes a concession or two, Viacom will declare victory, and the lawsuit will disappear. Then, a couple of years later, when every media company in the world has a distribution deal with Google and Viacom's content is even less of a percentage of total views than it already is, the deal will probably get renegotiated on more favorable (to Google) terms.
Silicon Valley Watcher covers the Viacom statement and posts a YouTube Daily Show just for fun.
Valleywag, makes the inevitable and tortuously predictable Dr. Evil/Summer Redstone juxtaposition.
UPDATE: This post isn't complete without Mark Cuban's reaction...
Gootube has no earthly idea who their users are. They make no effort to find out. So if someone wants to repetitively upload movies, shows, whatever, they just jump from user id to user id.
Finally, this last point goes to the heart of how poorly Gootube relates to copyright law in general. THe DMCA Safe Harbors as they are written will not exist for very long. You can bet the same companies that spend tens of millions of dollars to extend copyrights to ridiculous extremes, or that want to push for truly ridiculous things like a Broadcast Flag, or the new Webcast Royalties, will spend whatever it takes to get the law changed to their liking. Just as they have done multiple times before. One thing is certain, our lawmakers and lobbyists are relatively cheap compared to the dollars at stake here.
Google may not know it, but they have already lost. They will lose this case if its fought to the end, and whatever moral victories they may be able to gain in a legal battle or settlement will be ripped from them when the DMCA is changed. Then they will still have to negotiate with copyright owners to get their content. THe entertainment industry may not be great at many things, but getting copyright law changed to meet their expecations is one thing they are better than any one at.
Finally, and appropriately, a random guy with a pipe and a video camera tells us why the DMCA protects YouTube.... No word if he is on Google retainer yet...