Viacom Sues YouTube, Google for $1 Billion

In a landmark faceoff between programming owners and Web sites purporting to comprise user generated content and social networking capabilities, media giant Viacom Inc. said Tuesday it is suing YouTube and Google for more than $1 billion because of unauthorized use of its assets.

Specifically, Viacom filed suit in the U.S. District Court for the Southern District of New York for massive intentional copyright infringement of its entertainment properties. The suit seeks the damages as well as an injunction prohibiting Google and YouTube from further copyright infringement.

The Viacom complaint contends that almost 160,000 unauthorized clips of its programming have been available on YouTube and that these clips had been viewed more than 1.5 billion times.

“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,” Viacom said in a statement. “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,” Viacom continued, “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’s brands include the multiplatform properties of MTV Networks, including MTV, VH1, Country Music Television, Logo, Nickelodeon, Nick at Nite, COMEDY CENTRAL, Spike TV, TV Land and more than 130 networks around the world, as well as digital assets.

The conflict pits the rapid rise of sites that boast user-generated content but don’t create traditional TV shows or movies against content providers such as Viacom. At the heart of the dispute, as has been the case as the lines between content provider and service provider blur, has been compensation.

"We are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree,” Google said in a statement. “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.”

While telcos and Hollywood have worked to create acceptable content carriage deals for the latter’s TV services, there’s little evidence of any major relationships between content owners and sites such as YouTube, which have fast become extremely popular Internet destinations.

However, YouTube has cut deals with content owners such as the National Hockey League and England’s BBC where it will provide their content in short-form videos or as round-the-clock “channels” to the masses through its Web site

YouTube has also teamed with at least one mobile operator, Verizon Wireless, to have its content accessible on select handsets as part of its V CAST mobile service. The deal was announced in late November.

“After a great deal of unproductive negotiation, and remedial efforts by ourselves and other copyright holders,” Viacom said, “YouTube continues in its unlawful business model. Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused.”

Google Inc. www.google.com  

Viacom Inc. www.viacom.com  

YouTube www.youtube.com

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