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YouTube vs Viacom

May 26, 2010

Many are writing the battle of YouTube vs Viacom as a classic new media vs old media battle. So the recent news that Viacom tried to buy Youtube prior to suing it for $1 Billion seems to suggest that this is more about business with copyright as the proxy:

YouTube, frankly, has moved the video market forward faster than any other player, and that high risk game is ultimately good for users. If it had been left to Viacom and its ilk to move forward with Internet TV, we’d still be watching everything in Windows Media or Realplayer (RealPlayer) format, with no progress made over the past two years. These companies didn’t innovate, and suddenly found themselves contending with a young upstart that was driving more viewers to their content than they ever could. Fearing loss of control, particularly of the distribution channel, suing seemed like the best option for a company that’s anti-innovation. That said, YouTube was also so incredibly slow to roll out its copy protection, and only delivered a deal with AudibleMagic when we expected an in-house solution, that it gave these lawsuits the opportunity to bubble up.

As more and more details of the case appear online – it also gives an interesting insight into a older, larger corporation deciding how to approach a young upstart:

[A] July 2006 e-mail exchange between Jason Hirschhorn and Viacom General Counsel Michael Fricklas as Viacom deliberates about buying the video portal. Fricklas replies to an Ars Techinca explainer Hirschhorn sent around on YouTube and copyright: “Mostly, YouTube behaves—and why not—user-generated content appears to be what’s driving it right now. Also the difference between YouTube’s behavior and Grokster’s is staggering. while the supreme court’s language IS broad; the precedent is not THAT broad.” Hirschhorn carefully responds: “I believe that more than 60% of youtube’s traffic is from copyrighted material.” … Viacom execs, who missed out on MySpace (NYSE: NWS) the year before, are beyond keen to get YouTube. Not surprisingly, Google highlights gthe most, um, exuberant parts: MTVN CEO Judy McGrath telling M&A execs: “Help us get YouTube. We cannot see it go to Fox/NBC” and “I want to own YouTube. I think it’s critical asnd if it goes to a competitior!!!!!!!!!!!!!!!!! Even if we have to buy it with a partner to keep it below the line.” Then-Viacom CEO Tom Freston:”If we get UTube… I wanna run it.” McGrath: “You’ll have to kill me to get to it first.”

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