Has Viacom overblown its case?

March 15, 2007

In my former days in private practice, I had to draft several complaints.  Back then, as a young lawyer, I was big into rhetoric, so I enjoyed throwing in a lot of gloomy, doomsday-sounding words.  Now that I’ve matured (at least as a lawyer) I’m more often turned off by overblown rhetoric.  Overstating one’s case can backfire by raising expectations of the court higher than the evidence supports.

Reading over Viacom’s complaint, I fear that Viacom has overblown its case.  It has the kind of rhetoric–doomsday– appealing to young associates.  In a short complaint of only 27 pages, Viacom uses the word “massive” 9 times, “rampant” 4 times, and “brazen” twice.  Here’s one example:

Viacom:  “Using the leverage of the Internet, YouTube appropriates the value of creative content on a massive scale for YouTube’s benefit without payment or license.  YouTube’s brazen disregard of the intellectual property laws fundamentally threatens not just Plaintiffs, but the economic underpinnings of one of the most important sectors of the United States economy.”   

Viacom goes even further:  “Defendants know and intend that a substantial amount of the content on the YouTube site consists of unlicensed infringing copies of copyrighted works and have done little or nothing to prevent this massive infringement.  To the contrary, the availability on the YouTube site of a vast library of the copyrighted works of Plaintiffs and others is the cornerstone of Defendants’ business plan.  YouTube deliberately built up a library of infringing works to draw traffic to the YouTube site, enabling it to gain a commanding market share, earn significant revenues, and increase its enterprise value.” 

Analysis:  I doubt that Viacom will be able to substantiate most of these bold assertions.  For starters, YouTube only made $15 million in revenue last year and none from Viacom’s unauthorized clips.  Second, to suggest that the “cornerstone” of YouTube’s business plan is based on exploiting infringing works seems to fly in the face of all the legitimate content on YouTube, as Businessweek’s Catharine Holahan points out.  Based on my own review of YouTube files posted daily, I would estimate that the vast majority of works on YouTube do not involve any recorded clips of TV shows.  Most are user-generated videos, which I believe is also the case for the majority of the “most viewed videos,” all time, on YouTube.

Viacom probably has a somewhat inflated view of how important video clips of its shows are to YouTube.  Compete blog’s Max Freiert has a statistical analysis (which I hope to discuss more) indicating that YouTube became more popular after all Viacom’s clips were removed.  I haven’t had a chance to study these numbers, but my hunch would be that it’s probably correct.  Viacom complained about 130,000 clips.  But YouTube probably has several billion clips now, receiving 65,000 a day.  That would make Viacom clips on YouTube less than a fraction of one percent of all clips on YouTube.  I mean, I like Stephen Colbert and all, but he’s not the reason I go to YouTube.

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Viacom’s lawsuit against YouTube: What backlash Viacom may face from YouTubers

March 15, 2007

News: In Viacom Suit Won’t Snuff Out YouTube, Catherine Holahan of BusinessWeek.com has an insightful assessment of Viacom’s copyright lawsuit against YouTube. The article distinguishes YouTube from Napster, and makes several points in YouTube’s favor.

One point that I was not aware of about Viacom’s lawsuit: Viacom has not asked for an order stopping YouTube’s operation (as apparently was the case in the RIAA’s lawsuit against Napster)–which Holahan suggests means the following: “One reason for this could be that Viacom, owner of youth brand MTV Networks as well as Comedy Central, may not want to anger its key demographic in the same way that the RIAA did when it began to sue users of peer-to-peer sites. Another reason, says Rutchik, is that the whole suit is simply a negotiating tactic to make Google more willing to pay Viacom for its content.”

Analysis: I don’t think we should read too much into Viacom’s language describing the scope of the permanent injunction it seeks against YouTube.  It’s pretty generic.  I do think Holahan’s suggestion, though, is on target: given YouTube’s popularity, any company that caused or asked for a shutdown of YouTube, even if only temporary, would face a huge, perhaps cataclysmic backlash among millions of YouTubers. I’m reminded of what happened in Brazil when a court ordered it shut down there due to a sex video of a Brazilian model. The Brazilian model Daniela Cicarelli faced so much animosity from fans that she tried to distance herself from the lawsuit. Ironically, Cicarelli works for Brazil MTV, which is owned by Viacom.

There’s already a movement now on YouTube to “Boycott Viacom.” I’m not sure how successfull it will be unless YouTube becomes truly at risk of losing the lawsuit.