As my colleague Fred Vogelstein has noted, March 13 was the day the other shoe dropped on YouTube. The move came six weeks after Viacom, owner of the choice cable network Comedy Central and the no-longer-quite-with-it MTV, stopped talks with Google, YouTube's owner, and ordered its clips pulled from the site. Viacom, which along with other networks had reportedly been offered a mere $150 million from Google over the next five years, said no thanks in language that painted YouTube as Napster 2.0. In diplomatic terms, that was way past recalling your ambassador but somewhat short of sending in the cruise missiles. The cruise missiles have now arrived, in the form of Viacom's $1 billion-plus lawsuit. Shock and awe, dude!
Not that we should prejudge the outcome. As Clausewitz would surely have pointed out had he written a management tome, lawsuits are essentially business negotiations pursued by other means. And this one can hardly have been unexpected—Mark Cuban argued months ago that Google was crazy to buy YouTube because it was bound to be a lawyer magnet. Meanwhile, Viacom chairman Sumner Redstone has been on the march: First he took out Tom Cruise; then he laid waste to Tom Freston, his underperforming CEO. By being the first media tycoon to take on YouTube, he's demonstrated once again his willingness to pull the trigger that other moguls are merely contemplating. The only problem is that YouTube has been far more effective at promoting Viacom's TV shows—Jon Stewart, "South Park"—than any online distribution mechanism Viacom has managed to come up with. Viacom now claims its shows have been viewed on YouTube “an astounding 1.5 billion times”—which would be great if Google weren't putting itself in position to collect most of the ad money that everyone assumes will come pouring in as a result.
But haven't we encountered the idea of selling advertising against somebody else's copyrighted material before? Oh yes, that would be about 25 years ago, with the launch of MTV. Everybody in television knows the story—how MTV became an incredibly hot property for Viacom based on its use of music videos supplied gratis by the labels as a promo tool. There wasn't any question of illegality about this—MTV didn't exactly scoop up the videos after they fell off a truck. Still, one question that's been reverberating around the media business ever since is whether the labels erred in giving MTV their videos. In terms of promotional value, clearly not. But that doesn't change the fact that nobody—including Sumner—wants to see the same thing happen all over again with YouTube. Now if only the MTV Generation hadn't been supplanted by the YouTube Generation....
