Wednesday, March 14, 2007

Google And Viacom - This Is What The Battle Is REALLY About.

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When Google Inc. bought YouTube last year, critics warned the Internet search giant was exposing itself to big legal battles over copyright infringement. Those predictions came true yesterday when Google was slapped with a billion-dollar lawsuit.

In a case that will pit the old guard of media against the new giant of Internet video, Viacom Inc. said yesterday it is suing YouTube and Google for $1-billion (U.S.), accusing them of "brazen disregard" for copyright laws.

Viacom owns networks such as MTV, which was among the most powerful youth brands a decade ago. But much of that ground has since been ceded to Internet sites such as YouTube, said Kaan Yigit, a new-media consultant with Solutions Research Group.

"Every so many years, a pivotal event happens that defines the tenor of the times and the fight between new and old . . . this is probably be as close to that as we will get," Mr. Yigit said.

"If there is one trial that I would want ringside seats to, this is it. On one side, you have the ex-champion of the content world in analog times, Viacom and all of its brands. And on the other side, you've got the newly minted champion of the digital world."

Though often threatened with legal action by television broadcasters and movie producers upset about their content posted on the popular video website, YouTube has managed to avoid major legal disputes in its short two-year existence.

However, when Google bought the operation last year for $1.6-billion (U.S.), the deal suddenly linked YouTube to the big-league profits of its new owner. The lawsuit comes after months of talks to reach a deal with Google over Viacom programs such as The Daily Show, The Colbert Report and a host of MTV programs.

Legal experts said yesterday's announcement was inevitable. Some dismissed it as a bargaining tactic in the negotiations.

"As long as YouTube was a very small upstart, nobody saw the deeper pocket. Once you're bought by Google, people see the deeper pocket and that's what breeds this sort of litigation," said Samuel Trosow, an associate professor in the Faculty of Law at the University of Western Ontario.

YouTube draws more than 130 million visitors a month, according to ComScore Networks Inc., which tabulates Internet surfing data. That represents an increase of 14 times over a year earlier, reflecting the remarkable rise of YouTube since its inception in 2005.

Google makes money from the site by linking advertisers with Web surfers. Television companies such as Viacom, which has 130 networks around the world, want a piece of the action.

In a statement issued yesterday Viacom said Google and YouTube have "deliberately chosen not to take reasonable precautions to deter the rampant infringement on its site."

Last month, Viacom ordered YouTube to take down 100,000 unauthorized clips of material it owns, which the company said have been viewed more than 1.5 billion times.

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