The global multimedia company Viacom announced today that it has filed a $1 billion lawsuit against the video-sharing Web site YouTube and its parent company, search engine giant Google.
Viacom asserts that the defendant companies have engaged in massive copyright violations, allowing nearly 160,000 clips of Viacom-owned content to be downloaded and viewed an estimated 1.5 billion times.
Viacom is the owner of several media outlets that have proved popular on YouTube, including MTV, VH1, and Comedy Central.
'Fruit of Our Efforts'
Viacom filed its lawsuit in the U.S. District Court for the Southern District of New York. Under federal rules, defendants Google and YouTube have 30 days to respond to the complaint.
"There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process," Viacom said in a statement. "This is value that rightfully belongs to the writers, directors, and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity."
Viacom went on to say that, after a great deal of unproductive negotiation and remedial efforts, YouTube continues in its unlawful business model.
"Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused," Viacom stated.
Scott Kessler, an analyst with Standard & Poor's, was not surprised by the morning's news. "Viacom is one of the most outspoken and active media company when it comes to fortifying its rights and protecting its content on YouTube," he said. "This lawsuit is a continuation of those activities. It certainly is not surprising that Viacom is concerned that its content is appearing on YouTube without Viacom's control and for free."
Since its acquisition by Google, YouTube has successfully negotiated content-distribution agreements with a variety of media and entertainment companies, including the BBC, the National Basketball Association, and CBS. The site's traffic also continues to grow, with nearly 20 million unique visitors each week.
Despite months of negotiation, however, YouTube has been unable to strike a deal that would enable it to distribute Viacom's popular content. YouTube did remove over 100,000 unauthorized clips of Viacom content in early February, but the parties still have been unable to resolve their differences.
Kessler suggested that the lawsuit, while headline-grabbing, might be primarily a negotiating tactic.
"I think it is clear that sites like YouTube are the future," Kessler said. "A lot of companies have online content but they fall considerably short of what YouTube can do."
He said he believes the lawsuit is "positioning and politicking" by Viacom to "pressure YouTube to ramp its revenue-share technology, its distribution channels, and most relevantly, to be more focused on copyright protections."
Kessler also noted that he expects the companies to keep talking even while the lawsuit progresses.