Comments on: Viacom v. YouTube: All Over But the Shouting

By: Paul Sweeting

Paul Sweeting — Wed, 24 Mar 2010 17:44:38 +0000

Michael,
With respect, and with deference to your superior legal credentials, I think your comments actually illustrate the point I was trying to make: this is a costly battle that has become divorced from whatever strategic advantage might have been gained from it, particularly for Viacom.

The points you raise, regardless of how well-taken, are essentially theological. The important strategic questions, it seems to me, ought to be whether there’s a plausible legal outcome here that is likely to materially improve the leverage that Viacom and other media companies have when negotiating deal points with YouTube and other, future user-generated video distributors, and whether the value of that increased leverage can ultimately justify the cost of achieving it. That’s particularly critical if those costs are reckoned not just in terms of the direct legal costs but also in terms of management’s time and attention and, most of all, of the opportunity cost of not doing something more productive. That’s not, fundamentally, an argument about the value of copyright per se, or its enforceability online under the DMCA. It’s an argument about economic costs and benefits.

My argument rests on whether the most likely answers to those questions have changed between the time Viacom filed its lawsuit and now. I would submit they have, in major part—though not exclusively—because of how the law has evolved in the meantime. Granted, Veoh is not legally binding on the court in Viacom’s case, but neither is the court likely to ignore it completely. Nor is YouTube likely to be the last user-generated video site Viacom will need to deal with. So even a contrary ruling in your case won’t make Veoh go away. In any event, Veoh along with other cases, would appear to have increased the odds of a less-than optimal legal outcome for Viacom, which, again it seems to me, would change the cost/benefit analysis.

Ultimately, as your own comments imply, this is an argument about a deal. The fact that YouTube refuses to filter content unless Viacom agrees to a license is simply a deal point (albeit a pretty tough one). It’s possible the court will change the legal framework for the negotiation in such a way as to benefit Viacom. But there’s also a fair chance it won’t. Meanwhile, I would argue, News Corp. and NBC Universal have achieved more in terms of Google’s willingness to deal by launching Hulu in competition with YouTube. The media companies, in my estimation, have more to gain strategically from the fact that Google spent $1.8 billion to acquire YouTube and thus far has been unable to produce a return for its shareholders than from the fact that it may not have adhered strictly to the requirements of the Section 512 safe harbor.

By: Liz Gannes

Liz Gannes — Wed, 24 Mar 2010 16:51:39 +0000

I find it particularly interesting that Viacom is setting aside all post-filtering activity. I know that’s not what’s at stake in the case, but it’s good to see that there’s now a somewhat happy compromise between content owners and YouTube. That seems like a better precedent than a years-too-late court ruling.

By: michaelfricklas

michaelfricklas — Wed, 24 Mar 2010 04:16:11 +0000

Paul, I am having a hard time figure out what you are saying. Set aside the specific facts of this case – if you have a UGC site and are filtering but say “I know a lot about copyright infringement on my site, and I have processes to reduce it, but I’m not going to do anything about it UNLESS you agree to a license” – should that be protected? Why is that different from bandits saying unless you pay me I’m going to keep robbing the train? The DMCA says that if you have knowledge, you’re not entitled to the safe harbor. Grokster says that if you have knowledge and intent, the DMCA does not even apply.

In contrast, in Veoh, Judge Matz found that Veoh didn’t have knowledge. There was no evidence of intentional theft. Veoh filtered for everyone – license or not. In any event, Veoh’s a trial court in a different circuit, so it’s not binding.

If someone beats you over the head, and you get the police, and then they stop, do you think that’s the end of it? Of course not – there is still the wrongful act and you are entitled to compensation. This case is about compensation now, as well as establishing the point that YT needs to keep on filtering and others do, too.

It’s also about the point that copyright theft is serious and illegal, and shouldn’t be deployed for commercial profit.