February 6, 2007
In the Heat of Battle, Viacom and YouTube Are Forgetting Something Important--The Consumer

While we were still recovering from the aftermath of the havoc, doom, and devastation brought onto Boston by cartoon characters, linked to our partner organization in the consortium Turner Broadcasting, the parent company of another of our partners was wreaking some havoc of its own.

Viacom, the company that owns MTV Networks, decided to make a statement on Friday, I guess, when it drew a Friday afternoon response from YouTube that about 100,000 YouTube clips featuring copyrighted material from Viacom properties be pulled down.

The Viacom statement released stated the reason being that "YouTube is unwilling to come to a fair market agreement," pointing out that these clips have been viewed 1.2 billion times but that there has not been a busienss arrangement worked out. Instead, Viacom indicates plans to come to a deal for authorizing distribution for YouTube to allow consumers to make its content available through the site, similar to the deal YouTube has struck with CBS and NBC, among a variety of other entities.

But never fear! The company has some of that content available on its own Web sites for the various cable networks. (The problem here is that the industry seems to not be able to legally distinguish between piracy and quoting and seem to want to define fair use as, "None," in fear of what legal precedents might be set--the recent Second Life decision notwithstanding.

Strangely missing from this business move from Viacom is the consumer, (or perhaps not strangely, sadly enough, considering the limited focus of many media companies that persists despite the fact that they have seen example after example of why this prohibitionist stance does nothing to fix the problems while further straining consumer relationships).

While this press release sounds good from a business perspective, that Viacom would pull its content from a distributor who is not working out a fair sharing agreement, what's missing is the fact that YouTube is not the entity posting this content--it's the fans, fans who see quoting from these shows and sharing their favorite moments with each other as part of expressing their love for these programs.

Instead, Viacom and Google--through their squabble with YouTube over how big the piece of the pie will be--has lost perspective of the fan in the process, the whole force driving the power of both entities. I'd personally like to see Viacom's bottom line and figure out any use for YouTube at all if it weren't for these massive number of copyright infringers and all those people who are seeking out those content through such viral means.

The company has generated quite a few "f*** you" remarks from fans, particularly those angered by the fact that the backlogs of these shows are not available anywhere, yet Viacom is calling for them to be pulled down. Take, for instance, The Daily Show and The Colbert Report, two particularly strong media properties that have gained significant power from the college-age viewers who are also posting and viewing older clips from this show on YouTube. These fans both enjoy quoting from the show but also viewing clips from episodes past that are not only no longer being played but aren't made available on DVD or in any other format. In other words, fans are particularly mad about content being pulled that Viacom has shown no current plans for being made available commercially, anyway.

See some of these comments from personal and industry watch-blogs here, here, here,

See also John Palfrey's writing on this move, as well as here, here, here, and here. Palfry writes about those who are victims of accidentally having their material removed in the Viacom purge as well, that even if there are only 60 of these people out of the 100,000 people who have had their videos removed, "What rights do those 60 people have when they choose to push back?"

David Brain, CEO of Edelman Europe, writes, "I can imagine the type of discussions going on in Viacom HQ between the here-and-now arguments of those citing the court of law and copyright infringement versus those citing the court of public opinion and marketing potential. Looks like the lawyers won." He goes on to point out that, from his perspective, it's difficult to decide who is in the right, but "there is a generation growing up with very different experiences and expectations and if you aren't where they want you, when they want you in the form they want you, you'll be toast."

While I don't think the newest generation of viewers are QUITE that fickle, Brain indicates a truth I think the TV industry is missing right now--for all their posturing, all their pride, viewers are the reason they are in business, and they are more than just impressions on a Nielsen report. The fact that many people are becoming disenfranchised at feeling like they are an afterthought in Viacom's posturing a deal with Google is far more damaging to the conglomerate than whatever lost advertising revenue there is from someone posting up a quote from last night's Daily Show. If anything, those quotes drive people to want to see more, so the company is shooting itself in both feet by making customers angry and cutting off tools for their own viral marketing, all in the attempt to get a better deal out of Google.

I'm not saying Viacom shouldn't be disgruntled that Google/YouTube hit this business model and are getting the benefits from other people's content, but their legal posturing is not going to change that fact. YouTube popularized this platform, and it's become a site of cultural relevance. The soooner Viacom quits playing these public IP games and starts using YouTube to its advantage, the better for them. People will have a great amount of tolerance for these types of squabbles because viewers are becoming used to them, but there's seldom a good reason to damage the goodwill of your company with no clear sign of gain.

Jon Lafayette with TelevisionWeek writes, "Viacom's demand that YouTube remove the videos highlights the tension between traditional media companies that want to be compensated for their copyright content and video-sharing sites that host the clips without authorization."

I think this sums it up. The industry sees it as a war between old media and new media, intellectual copyright holders and those who empower piracy. The problem is that this isn't just an industry battle. It involves the users, too, and Viacom--and every other media conglomerate--better not forget that.

As Cory Doctorow writes, "This is shockingly bad behaviour on the part of both Viacom and Google."

No one from MTV Networks was consulted on the writing of this piece.



Viacom is commiting slow suicide by letting their legal types get their way. You are right, it's the fans who post the content. If Viacom continues with this maddness their artists will have no fans and Viacom will have no business.....!


While I think that you may overstate the case a little, since Viacom has so many beloved media properties, the key is that it's never a good idea to generate ill will from the very people who drive your business. Wish consumer diplomacy and relations were figured a little more into the bottom line, since they do have a pretty big impact (as in, they make up the bottom line).


Thanks for a good review of the situation. It will be interesting to see what the other TV channels do. My guess is if they stay the course with YouTube, Viacom will have to go back. It's certainly a high risk apporach if it was a negotiationg ploy.


I think Viacom will have to reverse this situation because there's far more to lose than there is to gain by sitting it out for any length of time, in my opinion.