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ShareSAN JOSE, Calif. - In a move that could end up setting the terms for how content is distributed on the Internet, Viacom demanded YouTube remove more than 100,000 unauthorized video clips from its site Friday morning after a months-long negotiation over licensing terms broke down.
“It has become clear that YouTube is unwilling to come to a fair market agreement that would make Viacom content available to YouTube users,” the entertainment giant said in a statement.
YouTube said it would comply, saying in a statement: “It’s unfortunate that Viacom will no longer be able to benefit from YouTube’s passionate audience which has helped to promote many of Viacom’s shows.”
However, as of late Friday afternoon, YouTube was continuing to screen videos produced by Viacom properties like Comedy Central, Nickelodeon, BET and MTV Networks.
Viacom’s action comes as big Hollywood studios have grown increasingly frustrated by YouTube’s flagrant use of copyrighted material despite a promise last September that it would install filtering technologies to weed out that content. YouTube was purchased by Google in October for $1.65 billion.
According to Viacom, which owns more than 120 networks around the world, YouTube has shown clips of its television shows, music videos, movies and documentaries more than 1.2 billion times.
“We are asking to get paid,” said Mike Fricklas, Viacom’s general counsel, in an interview with the Mercury News. “Our content is very valuable and we think that has obviously contributed to YouTube’s growth and to Google.”
An agreement between Viacom and Google would have “major implications for the value of content online,” Ben Schachter, an analyst at UBS wrote in a note Friday morning. According to comScore Networks, YouTube had about 41.5 million U.S. visitors in November, who streamed roughly 773 million videos. During the same period Viacom’s Web sites had about 19 million visitors, who streamed roughly 327 million videos.
Josh Bernoff, a vice president at Forrester Research, said YouTube has been playing a “game of chicken” with some of the world’s largest entertainment companies by removing their copyrighted content after they identified it but not doing anything to prevent the content from getting uploaded in the first place.
Technically, YouTube seems to be complying with the requirements of the Digital Millennium Copyright Act; however, it is unclear if a judge would agree. “It wouldn’t surprise me if this ended up in the Supreme Court,” Bernoff said. “It goes to the fundamental question about the rights of consumers and the rights of copyright holders on the Internet.”
As Google has grown into a media behemoth, it has struggled to be a responsible corporate citizen while remaining true to the freewheeling, egalitarian ethos that characterized the early Internet.
Google itself implemented filtering technologies at Google Video, a one-time YouTube competitor, to identify professionally produced content. But YouTube far outstripped Google Video in popularity, as its servers filled with pirated content that could not be found anywhere else.
YouTube has struck deals with large music companies that have involved both equity stakes in YouTube and compensation for use of their catalogs. Television and movie studios have also entered into limited promotional arrangements. But they have not been able to reach more comprehensive licensing agreements.
Fricklas said Viacom had reached the point of “zero tolerance” after sending YouTube tens of thousands of takedown notices since the video-sharing site went live more than a year ago.
He said Viacom used automated technology to identify its content on YouTube, and that Google could do the same.
An insider at another major entertainment company said YouTube’s copyright violations have become “epidemic” and need to be addressed.
Viacom, Newscorp’s Fox, CBS and General Electric’s NBC Universal have reportedly explored the idea of forming a YouTube competitor. At least three of the companies have also talked about filing a joint lawsuit against the video-sharing site, the Wall Street Journal reported.
Google has taken a public position that it is willing to compensate the creators of content, and last year Google and Viacom undertook a joint experiment to include advertising in video clips from shows like Nickelodeon’s “SpongeBob SquarePants” and MTV Networks’ “Laguna Beach,” when they were distributed to different Web sites in Google’s advertising network, giving both companies a chance to profit from the clips being posted online.
Both companies have said they were happy with the results of the test, which was limited in scope. “Our hope is that YouTube and Google will support a fair and authorized distribution model that allows consumers to continue to enjoy our very popular content now and in the future,” Viacom’s statement concluded.
