Wednesday, March 14, 2007

Viacom/Google Fallout: Prime Time For Smaller Competitors To Woo Content Partners

by Shankar Gupta


IT'S PRIME TIME FOR SMALLER video players to step in and make content partnerships as relations between Google and traditional media companies grow increasingly frosty. That was the assessment of industry watchers in the wake of the $1 billion copyright infringement lawsuit filed Tuesday by Viacom against the search giant and its subsidiary YouTube.


Viacom is likely to seek out other partners who are more responsive in developing strategies to pay media companies whose content appears on their sites, said Forrester Research analyst James McQuivey. "They think they've waited long enough for Google and YouTube," he said. "What they're going to do is work aggressively to get distribution everywhere else."

Citing a major deal with YouTube rival Joost and smaller initiatives that allow small site owners to create custom clips of Viacom content and syndicate them on their Web sites, McQuivey said that major media companies' dissatisfaction with Google-YouTube is an opportunity for up-and-coming players.

"Viacom does want that content out there--make no mistake, they just feel like they didn't get enough cash for the value they're providing for YouTube," he said. "There's an opportunity for smaller players to run to companies and say, 'we're your friends, we'll protect your interests, come do a deal with us.' "

Some smaller players, however, have also faced major litigation. In February, Bolt Media, another online video sharing site, sold itself to another video-sharing site, GoFish.com, to raise money to settle a lawsuit with the Universal Music Group.

Aaron Cohen, founder of Bolt Media, said that the spate of DCMA lawsuits, culminating in the Google-Viacom suit, shows that the legal system surrounding copyright on the Web is broken. Video sharing sites say the DCMA (the Digital Millenium Copyright Act) protects companies from copyright infringement suits as long as they remove infringing content when the owner complains.

"I settled in part because I think the system is broken, and that it's simply not a winnable solution over the long-term, no matter how the court cases play out," he said. "This is obviously very flawed legislation; it isn't working for anyone. So, content owners and content distributors need to work together to improve the business system and the legal system."

Google on Tuesday released a statement that seems to suggest that the search giant intends to battle the case out in court rather than settling.

"We have not received the lawsuit but are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree," the statement read. "We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube and its ability to attract more users, more traffic and build a stronger community."

Google CEO Eric Schmidt likewise made a strong statement last week in an interview on Bloomberg TV, saying that partnerships between media companies and Web distributors are inevitable. "The growth of YouTube, the growth of online, is so fundamental that these companies are going to be forced to work with and in the Internet," he said.


Source: MediaPost