paidContent.org has a good summary of the meat of Viacom's new lawsuit against Google claiming that the thousands of video clips being posted to Google's YouTube service are violating the 1998 Digital Millenium Copyright Act. A good analysis by CNET of exactly what in the DMCA is germane in this suit points out that the thin ice that Google is treading upon is the alleged encouraging of mass infringement of copyright - in spite of very specific statements in its terms and conditions to the contrary. Financial analyst Henry Blodget notes in his blog that most of this is about heavy-handed deal-making and the ultimate failure of Google to come to terms with Viacom in recent discussions over content use and licensing.
While the legal precedents are not strongly in favor of Viacom's view of this suit there are some important twists to consider. Though there is no user-driven revenue model for Google via YouTube as of yet it could be argued that Google is engaging in trade practices similar to what supermarkets have used oftentimes to penetrate new markets. In years past a chain wanting to dominate a given market would lower to cost of its goods to the point of losing money in that market's stores to force competitors to lose business - and eventually fold. Viacom's claim is in essence that Google set up a store and stocked stolen goods similar to their competitors and made them available at deep discounts - say, in this instance, for free. If this can be argued successfully in the courtroom Viacom has a leg to stand on.
But this argument falls apart from a few angles. First, it's a little ironic that Viacom is claiming in a USD 1 billion suit that Google is using DMCA-sanctioned "takedown" of copyrighted content is a heavy-handed tool to buy them time in negotiating licensing deals. Other media companies have managed to come to commercial terms with Google for the use of copyrighted content on YouTube: what makes Google more "evil" in its relationships with Viacom? These precedent deals for YouTube usage can be used effectively in a suit as examples that Google does indeed want to license copyrighted content lawfully.
Equally important is the question of whether Viacom has demonstrated that it has in fact tried to protect the value of its copyrighted content from duplication. If video clips are as easily "borrowed" by audiences as apples from an unattended fruit stand then the "stolen markets" issue is not easily argued - willful neglect could be argued fairly easily by the Google side. Had these clips been behind a firewall or in a DRM wrapper that Google had cracked directly, the DMCA angle on this suit would hold much more water. As it is, Viacom has no effective technology that prevents audiences from "borrowing" its online content.
All of this boils down to one key factor: Viacom and many other media companies have given little or no thought as to how to make content automatically monetizable through social media services such as YouTube. Yes, Viacom, your copyright has been abused by some posters on YouTube, and yes, you shouldn't have to ask Google after the fact for documentation showing where content was in fact being abused, but why are companies like Viacom failing to implement tools and policies to help monetize their content more effectively? Consider Viacom's suit perhaps the last loud "bang" of anti-Google legal maneuvers - due in large part to Google's having anticipated the needs of video producers far more effectively than any other major content outlet. The case could break the other way but for today I'd bet on Google continuing its push towards video posting as it awaits reasonable action being taken by courts to validate its thinking about what makes a successful content play in today's New Aggregation.