Not a stretch where I would come out on this, but it never ceases to amaze and amuse me how liltle understanding of the content business, or the business world in general that many in the blogosphere have.
Let me provide a simple scenario for you.
HBO. HBO charges a monthly fee to subscribers. If someone can watch an HBO show on Google Video or Youtube, even if its divided into 1,3 or 6 parts and re assembled into a playlist, they have far less incentive to subscribe or retain their subscription(s).
HBO in turn, syndicates those shows to cable networks. As an example, A&E paid a reported $2.2 million dollars PER EPISODE of the Sopranos. If the content is available online, do you think maybe it might reduce the value to A&E and HBO of the Sopranos ? And thats before we even get to overseas syndication. Youtube and Google VIdeo have a great deal of popularity overseas because in many cases US shows are not as readily available. Online international viewing reduces the international revenue opportunity.
THen of course there are DVD sales. Youtube downloads every video right to your PC. Google Video not only downloads to your PC, it provides the option to convert it into a PDA format including the Ipod.
So tell me why it makes good business sense for HBO to let users post the content they sell for a ton of money ?
Now some of those who are so self absorbed in net culture and have no idea how the real world works might think that all of this leads to more viewing and consumption. Maybe it does. Maybe for some shows, like those on broadcast TV, it really does help to have as much promotional video for the show, even to the point of full episodes available both on Youtube and Google Video. There are definitely situations where it could help a show gain viewers and increased sales of DVDs. All of which has nothing to do with whether Viacom or any content provider should let users upload video.
I have a secret for you. ITS EASY FOR END USERS TO UPLOAD video to Youtube and Google VIdeo. ITS EASIER FOR THE CONTENT OWNER to do the same thing.
VIacom doesnt need John or Sally to upload video for them. They are more than capable of doing it themselves. If Viacom wants to put up snippets, scenes, mashups, mockups, quarter, half or full episodes of anything they own, there is nothing to stop them. Its their choice. If they are smart, they will fill every Gootube Server they can reach with their content in a manner that drives viewers back to Viacom properties. They will experiment with every option, including those that engage and involve their viewers, to see what works and what doesn't work and what makes them the most money. Why not ? Google is paying for all the bandwidth. And by the way, if the content owner uploads a ton of content and DOESNT do a deal first with Gootube, Gootube cant sell a nickels worth of advertising on the play pages.
And while they are experimenting , they should continue to sue the hell out of Google. Google blew it. They had no confidence in user generated content generating enough traffic to drive Youtube so they closed their eyes to the obvious. There is absolutely no value to a media company in letting users actually upload video. If they want to know what users want, they can create their own version of twitter that lets people tell them "what they want to watch right now" and respond to it.
My hope is that this lawsuit is not a negotiating ploy. I dont think it is. Why ? Because there is no downside to Viacom to run this one out to the end. If they win the suit, they make their Billion Dollars, which given this lawsuit could take years, could grow to 10s of Billions in damages if Gootube doesn't take any action to stop the ongoing infringing uploaders. If Viacom loses, they lose legal fees of course, but Google still has to negotiate to get their content. The only real hassle is that Viacom must continue to send takedown notices. Thats such an easy choice, 10mm in legal fees vs the potential for BILLIONS and BILLIONS of dollars. Its so easy, that I expect many suits to follow this one.
So who wins ? On the legal side, I wont pretend to be an IP lawyer, but I will invoke my blogger's right to speculate on some of the Safe Harbor Issues, so here goes.
On the issue of Red Flag Knowledge of Infringing content, thats an easy win for Viacom..."Mr Schmidt, have you used Youtube ? What have you looked up in your searches ? Google captures this information doesnt it ? Could you turn over your searches for the last 12 months...Oops. Who knew you loved Beavis and Butthead and won't miss the interviews on 106 and Park." Lucky for Eric, mini piratebays run amok on Gootube. People take ownership of shows and even genres and upload the same show(s) over and over , switching IDs when the previous ID is cancelled. They are there working just like piratebay and bit torrent trackers, switching IDs rather than having to change servers or URLs. Bottom line is that Gootube is a haven for pirates operating under Gootubes cloak of respectability. The sad part is Google Video in particular makes it easy for people who could never figure out bittorrent or even know what it is in the first place to download videos. Here is where eps of Entourage of easily available.
I cant imagine the powers that be at Google and Youtube havent used their own product and its features with infringing content.
Then there is the issue of what business are you in and removing repeat infringers. In previous cases, there was always a financial link between the "Service Provider/Host" and the uploader. Ebay knows their customers. Loopnet knows their customers. I happen to believe that its key that the "Service Provider" have a real business and infringing action by its users is as much a problem to the Provider as it is to the copyright owner. An ISP makes money with the monthly bill. Ebay makes money from transactions. A real estate hosting company makes money from listings. They all know exactly who their customers are and if one of them uploads infringing materials, they can actually identify the person and if they do it repetitively remove them. In either case, it doesn't change or impact their core business and it helps identify those who dont respect copyright and gives the content owner the option of taking action.
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.
You Go Viacom !
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(Page 1)2. You totally missed this one Mark! Of course Viacom prefers making shitloads of money over "sharing" and of course they dont need Google to share. I totally understand why they protect their aging golden cow! That's not the point. Their suit is counter productive and sad, that's the point.
Counter productive #1 - Even the best legal team can't stop technology. What are they going to do now? sue everybody? go back to film?
Counter productive #2 - The spin Google will pull will really hurt the Viacom brand. Nobody wants to pay for an old episode of the Sopranos. Syndication my ass, HBO made too much money already anyway. Guess who from? The same people who want it on YouTube. Remember Lars and Napster? This will be perceived for what it really is - just too much greed.
Sad #1 - I'm not sure the real artists who need MTV prefer to stay controlled by Viacom.
Sad #2 - Because so many legit business will now lose funding due to uncertainty.
Posted at 12:28AM on Mar 14th 2007 by Aner Ravon
3. Mark, why didn't Viacom go after YouTube BEFORE Google bought it, if Viacom was losing a ton of money because of YouTube? They waited... and waited... until they could sue someone with big pockets. It's not like Youtube's traffic skyrocketed after their deal with Google. The amount they were losing was pretty much the same...
And I have a question for you. If I burn mix music CDs
(copyrighted material), and send it to my friends via USPS, would it be fair to sue USPS, since obviously they are delivering the CDs? What's the difference?
Posted at 12:39AM on Mar 14th 2007 by Mike
4. Right on Mark - I think you hit it on the head.
Aner - your sad points are irrelevant. Your counter-productive points fail to hold water when you look at it this way: (in response to #1) the technology has not been stopped, it's here and it's widely used... Viacom only wants to retain control of their content with technology they've developed themselves. (in response to #2) Google can claim whatever they want about what Viacom will do with their content - but I think we'll see more of what we're seeing with FOX and NBC - streaming their shows online on their sites, with short advertisements. They retain control, they make money, and the consumer only has to endure a short commercial (10-30 seconds).
The fact is - the content owners will always own their content and will always take it off of sites not paying them for it.
Gootube should capitalize on where their strength lies - a versatile, scalable, proven video delivery technology. I feel like selling their platform to these networks for the networks to control, customize, and host their content would do better for Gootube than trying to do it the other way around - grabbing content from the content owners and putting it on Gootube.
Posted at 12:46AM on Mar 14th 2007 by George Shaheen
5. I don't always agree with everything you have written about YouTube, but I certainly agree with the following quote:
"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."
I believe the DMCA is currently broken and needs to be fixed in order to address consumer facing file storing products, particularly those that are indexed and can be searched and reviewed by other users.
It will be very interesting to see how this case unfolds, as well as the future of the DMCA in the coming years.
6. OK, so the safe harbor provisions appear to be:
(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(A)
(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive 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; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
In thinking about it, I'd say viacom probably fails A(ii), since they obviously have someone who checks the stuff that's uploaded for porn.
They may also fail B. Because while the playback pages won't have any ads on them, the search listings do. So is ad revenue from when I search for a viacom property directly attributable to that property? I don't know, but I believe you certainly could argue that it is.
Hmm, reading further in the statute its clear that revenue from indexing infringing content definitely falls afoul of this. Those 3 sections are essentially repeated for indexing and searching sites.
This will be interesting. I think it's possible that the ad revenue on the search pages won't count, but think it's very unlikely that they survive the "is not aware of facts or circumstances from which infringing activity is apparent" test. I mean, when a movie's been split up into 10 minute chunks and uploaded, it's hard to argue that the infringing activity is nonapparent.
Posted at 1:43AM on Mar 14th 2007 by Skip
7. I understand the whole content issue as I have to get content rights from the major networks and advertisers on a weekly basis. I also understand where VIA and other networks are coming from when they want to protect their assets, i.e. content.
My problem is that the major networks constantly discount the quality of YouTube video and how it compares to content watched on TV, yet they turn around and claim that YouTube is costing them $1B. If they are basing this off the fact that they can't monetize the content with ads, then that's a completely lame claim. Why don't they then sue TiVo and every cable company that provides their viewers with a DVR? Everytime a show is time shifted just one minute, the entire revenue for that program and that user is gone. (Don't believe me? Wait until this year's upfronts are sold.)
Now, if they are basing this claim on Showtime content and their movie content in regards to lost subscriber and DVD sales, then ok, I can see that.
I think the real issue is that the cable companies and the networks weren't able to figure out how to monetize VOD content quick enough and web technology took over; now they are scared as hell. Had the major media companies come to an agreement and the majority of this content was availabe on VOD, then a lot of these users would just be downloading it and watching it on their TVs through the set top box. Would this have eliminated clips on the Internet, of course not, but it would have limited the need for full episodes on the internet. Instead users would have focused on samples to send to their friends. Heck, that's most of what's on YouTube anyways. When I get clips of John Stewart sent to me, it's not the whole program, just a funny segment.
8. "Now some of those who are so self absorbed in net culture and have no idea how the real world works might think that all of this leads to more viewing and consumption. Maybe it does."
You must have missed the tv pros talking about how viewership went up for CBS shows after posting on YouTube:
http://www.dtg.org.uk/news/news.php?id=2085
I've seen better articles on the topic but my volunteer teaching time is short and I don't have them handy.
I don't have a problem with Viacom suing Google. That's just good business. I don't have a problem with you not drinking the Web 2.0 koolaid. That's just good dietary practice.
What I have is a problem with this nonsense:
"If they are smart, they will fill every Gootube Server they can reach with their content in a manner that drives viewers back to Viacom properties."
I hate sp@mmers.
Posted at 2:19AM on Mar 14th 2007 by Clyde Smith
9. So while you make fine points, I still see a huge gap that's begging for a business/group to step in and fill it. Whether it's pay or ad-supported, there should be a one-stop shop to get/download music & video content, someplace that distributes the full catalogs of all the major labels, and that even the minor labels can get in on. Whatever it takes to make that happen, should happen. Consumers are obviously willing to do whatever it takes to make that happen. I mean, look how long it's taken the industry to realize that consumers would pay for 1980s TV shows... and given how slow the industry is, people are going to make it happen, and that's what YouTube is somewhat built on. I'm still EXTREMELY annoyed that I can't go to NBA.com (or NFL.com or MLB.com or ESPN.com) and find a downloadable version of the 1996-98 NBA Finals, or the last X NCAA Tournaments... these should all be things I can get in high-quality if I'm willing to pay for them, but no one out there has the content, and so those lucky people who were smart enough to record it are now putting it up on YouTube and I can see at least small, bad-quality versions of it... but that's SO much better than nothing, which is what's being offered. I'd gladly pay for that content, given that I'm somewhat price-insensitive when it comes to moments that have had major impacts on my life. And yet this is something over which I imagine you have some level of control, and yet I don't see Mavs content available anywhere except through the current standard media outlets. Anyways, sorry about that rant there, but sports is the single most important video out there, and yet it's even more controlled than TV shows, which I at least now have a chance to see if the studio decides to make some money on its back catalog. I'd love your feedback on what the constraining factors are on the sports thing, too, if you can talk about it. Cheers.
Posted at 2:21AM on Mar 14th 2007 by hootenany
10. Geogre,
You are trying to convert YouTube to a technology play but YouTube is a content play. It's where people tell each other what they love and talk about it. YouTube an't just outsource it and frankly, I don't think what NBC needs is a technical solution.
And who do you think pushed CBS and NBC to start streaming online? Would they have done so if it weren't for YouTube?
YouTube will never replace TV, and therefore TV shows will continue to make money on TV. On the internet, however, it's a different story - a new model needs to be figure out - and not in court.
And as for my sad point - why is it irellevant? Why does MTV own a music video it has never developed? isnt that a copyright abuse of natural justice?
Posted at 2:59AM on Mar 14th 2007 by Aner Ravon
11. People are giving USPS as analogy to GooTube, how lame!! First of all someone making a mix music and sending it across to friends itself is in gray area. But problem is not there, problem is if USPS makes millions of copies of what you sent and distributed it free, would'nt you sue?
I would say more appropriate analogy would be that of a cable or satellite provider distribute all contents free with tons of advertisements without paying anything to HBO or others!
I do believe that this will boomerang for viacom. But I guess all they are trying is better terms in their negotiations. All these big guys are pretty dumb and bad.
Posted at 3:10AM on Mar 14th 2007 by its4us2think
12. Mark, I think you're a smart guy but I think on this issue your are myopic. Everyone who doesn't have their head jammed up their portfolio doesn't care. This is purely an issue for people who are already rich who want to exploit their IP to become richer. Real artists are happy when people see their art.
If you make money on a business model which relies upon withholding your content from the masses your model is over. Maybe there is money to be made by fighting content-sharing for another decade (maybe a lot). In the long run the more you get your content out the better. There are a lot of people out there who can get it for free who will pay for it especially when they know the companies they are dealing with are not the corporate equivalent of retarded whores. I honestly think people should go out of their way to download corporate music rather than buy it because the RIAA is such a dastardly organization.
If you've ever explained your fascination with this issue other than bitterness--because they are sort of doing what you wanted to do with broadcast.com--I missed it. Are you going anywhere with all these posts other than you think what youtube is doing isn't going to work? Do you have an alternative? are you hating ?? what?
Anyways I love the Mavericks and think you've done a great job with them. Few things would give me greater joy than to see the Lakers beat your team in the playoffs, but if I have to settle for the Suns beating them I'll take it. That's one thing about NBA games, they're generally not fun to download because you already know who won, and you make a lot of money on an experience that can't be copied--the game LIVE.
Peace and keep posting
Roland
Posted at 3:14AM on Mar 14th 2007 by Roland
13. Finally!
As far as I'm concerned, Youtube grew large by blatantly ignoring copyright. As well know, pirates are the enemy of civilization. Civilization is the reason why we don't still sit around in a fucking cave.
Anyway. Obviously, the "morals" of most people are guided by their interests. Gootube doesn’t cost them anything and delivers the content free. So: Good. Content creators/holders cost them money and want to move against Youtube: Bad. I personally think that regardless of my personal interests, STEALING is bad. For the greater good. Everything else is a obviously a rationalization (going with technology, exposure, etc.).
So yeah Mark: Right on. Keep it up. As far as I'm concerned, you are defending the very values of civilization itself.
Posted at 4:19AM on Mar 14th 2007 by Lascap
14. Mark, The thing I just can't get my head around is how your approach to Gootube is consistent with your having funded the defense of Grokster. I'm not calling you a hypocrite, far from it. I'm trying to understand whether there is a consistent philosophy guiding these two apparently opposite positions, and actually understand it if there is one. Nothing wrong with someone's thinking evolving either. Nobody can say you're not thoughtful on these.
Posted at 4:54AM on Mar 14th 2007 by Brad Hutchings
15. I thought that you favored a technical solution to dealing with YouTube hosting copyrighted clips (from your post about the Oscars). Why the love for lawsuits on this?
In my opinion a lawsuit isn't going to help control copyright issues. It just makes lawyers richer.
16. hi mark!
i am here in china!
the maverick has a good maybe the best season this year, i am looking forward to seeing the first NBA champion.
however, i disagree with the choice that you send nash away, it is not a reasonable deal.
Posted at 5:46AM on Mar 14th 2007 by J.
17. Looney Tunes (Warner Bros Online) is using YouTube exactly as you suggest. They post short cartoons, package them up with info about the web site and use them to whet everyone's appetite for more. Here's an example... http://www.youtube.com/watch?v=-ndm1v-juJQ
Posted at 6:22AM on Mar 14th 2007 by Bob Russell
18. Yep, sorry. Totally missed the point. The real argument should be closer to "should content be locked up by default, or open by default".
And the answer should not be, "whoever has the biggest legal department and the most influential lobiests". We do live in democrocies (most of us reading this anyway). We actually do get to decide how the copyright ballance works.
And I am having my say here.
Posted at 6:53AM on Mar 14th 2007 by Andrew Davies
19. http://action.eff.org/site/PageServer?pagename=ADV_homepage
Posted at 6:54AM on Mar 14th 2007 by Andrew Davies
20. This is just simply something you called months ago coming to pass. Anyone with any sense knew this was coming.
Posted at 8:07AM on Mar 14th 2007 by Rebeccalee Coventry
1. Mark, As much as I want to believe you when you say Google does not know who their users are - I have to look at common sense. The Google toolbar collects information about it's users such as their search queries and online surfing habits, and it's quite possible that they even are able to sniff out a name and general location of the person uploading or viewing their videos. If they are smart enough to scan my email and show me ads relative to the content in my email - I am sure they are collecting data on my demographics. They probably won't admit this however because then they would be liable. So we shall see what this lawsuit really does to the big G, personally - I don't believe that it will do much of anything.
Posted at 11:24PM on Mar 13th 2007 by www.firelead.com