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Viacom vs. Future

3/16/2007 08:00:00 PM Eastern

Does anyone else find it sad that Viacom's $1 billion lawsuit against YouTube is the most newsworthy move the media giant has made since Chairman Sumner Redstone canned his longtime CEO Tom Freston last fall?

Viacom became a revolutionary company by winning the hearts and minds of those prized youthful viewers. That it's turned around, decades later, and sued another upstart for doing the same thing means something's seriously wrong.

I know YouTube has become a formidable brand in part by casting a less-than-vigilant eye on users who post copyrighted clips—including many from popular Viacom properties such as Comedy Central's Colbert Report.

“A-ha!” Redstone and his cohorts would no doubt say. “That's exactly why we deserve a billion dead presidents.” Especially when YouTube's parent, Google, is looking to monetize the clips with adjacent ads.

To bolster their case, Viacom CEO Philippe Dauman—like his boss Redstone, he's a lawyer who doesn't hesitate to litigate—says that the Websites of various Viacom networks have enjoyed substantial traffic surges since the company has taken on YouTube.

I'm not saying Viacom doesn't have a legitimate claim to uphold its copyrights. But consider the long tail here: A nasty legal battle with Google/YouTube will ultimately be bad for business.

Viacom's suit isn't just an attack on YouTube. It's basically giving the middle finger to the hundreds of millions of consumers who want their media and entertainment available anywhere possible with interactivity and ease.

You'd think the folks behind MTV would have learned something in the past decade after watching the recording-industry establishment wage its futile battle against file sharing. Haven't they noticed the way Disney has thrived in the post-Michael Eisner era, by working arm-and-arm with 2.0 leaders instead of hauling them off to court?

It's worth noting that, since Viacom went all cease-and-desist on YouTube in early February, the company's stock has barely budged. Meanwhile, YouTube's traffic continues to grow.

And it's also worth noting that, while Viacom is marshalling its legal forces, Google has been busy cutting revenue-sharing deals with several media companies—including Viacom's onetime corporate sibling CBS.

With one YouTube channel already top-rated, CBS has launched a second focusing on its NCAA basketball “March Madness” franchise. Google and CBS may have failed to reach an overarching revenue agreement in the past, but they've kept it out of court.

Other media giants appear to understand the benefit of having their content distributed for free on YouTube, where it makes its way to eyeballs that might otherwise not know where to look. (Hmm. Sounds a lot like what record labels do when they supply MTV with music videos at little or no cost.)

The Viacom-YouTube suit was Topic A at last week's Hollywood Radio and Television Society luncheon in Los Angeles. Understandably, the panel of cable chiefs on hand were circumspect about the matter. But their ambivalence about Redstone and Dauman throwing down the gauntlet was evident.

Perhaps the most telling comment came from Doug Herzog, president of the MTV Entertainment Group and former Comedy Central chief: “The genie is now out of the bottle in terms of the audience being in control.”

He's right. And no suit will stop that genie from posting and watching clips on YouTube.

E-mail comments to bcrobins@reedbusiness.com

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