Whatever attempts may have been made behind the scenes between Viacom (VIA-B) and Google (GOOG) evidently didn't work out, as Google CEO Eric Schmidt announced that he will aggressively fight the $1 billion lawsuit filed against them by the media giant, which means things must be going forward with the suit.
The lawsuit filed by Viacom asserts that Google's video-sharing site YouTube is a gigantic breaker of copyright law as it allows its users to continue to upload video clips of copyrighted video as they want. They say the business is built upon their content, as large numbers of videos from popular shows like Nickelodeon and Comedy Central make up on the alleged user-generated site.
Schmidt has always claimed that the law is on Google's side, which of course has yet to be determined in court. But Google has said from the beginning that they are only required to take down copyrighted clips when they are notified. Of course that's pretty ridiculous when as soon as a clip is taken down, another one of Google's users can put it right back up again.
Viacom has asked Google to put measures in place which will block the videos from being added to the site. Google has yet to respond practically, although they continually throw a carrot out that they are going to introduce something in the near future.
The idea of this case going to the courts, to me, is a good thing. While the law does seem to be clear, there is also the "spirit" of the law that can be taken into consideration. The whole industry is being held back on this issue, which needs to be resolved once and for all. The only way it can is to go through the courts. If it doesn't, all sorts of problems will continue to arise over the uncertainty.
All the public bantering and going back and forth now is an effort to win the public opinion war, but in the end, it will take the courts to sort it out.
I think all Viacom wanted was for Google to put up the blocking technology, which a lot of other companies have already done. Is that too much to ask of them? Or are their actions proving that the site can't survive without professional content. It's been shown that it will be very slow going for advertising on user-generated videos, as companies are still extremely cautious about the pitfalls that come with it, and it may take years before it's sorted out, if ever. With increasing number of semi-professional and professional video, it's becoming less attractive to take a chance on amateur video.
The upcoming introduction of the partnership between News Corp. (NWS-A) and NBC Universal (GE) for the professional video site will also put more pressure on Google.
Google has found out that YouTube may be a popular site, but it's worthless from a monetization point of view at this time. It would take decades to get their investment back at the rate generating revenue from it.
A number of other businesses, including the English Premier League, has lawsuits filed against Google at this time.
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