– Thoughts on Strategy and Management

Youtube and Viacom

At mid of December last year I posted about the legal disputes (in terms of copyright issues) and the opportunities to generate “Web 2.0-returns”.

Now we will face the next level of the copyright battle. Viacom (the media company) takes Youtube to the court and claims compensation for copyright violations. The amount of money or better to say “capital”, which is calculated for compensation, is 1 billion US Dollar (= 761 Million Euro). 

To understand this strategic strep we have to take into account that “some” Youtube-clips contain material from MTV, Comedy Central and Nickelodeon; all stations that belong to the Viacom empire.

Some more figures? Okay; Viacom argues that around 160.000 clips would contain copyright protected material and that around 1,5 billion times these clips have been downloaded. (one could argue, that less than one buck per show is not that expensive…). Very fascinating: Youtube seems to benefit from those measures. According to the information of this article, “…YouTube’s market share of U.S. Web visits to increased by 13.9% in the two-week period after Feb. 3, when YouTube was told to remove clips to popular Viacom-owned TV ….”

It seems to be that the mass of uploads (around 70.000 per day) is the major problem. In November last year I argued: “A manuell and exact tracking of copyright violations will not possible due to the huge number of uploads. I can also not imagine to check incoming clips: How will you decide about a video clip from a foreign country, whether you have a copyright problem or not?”
This is still the issue. Everyone can upload clips. In the case that you are the copyright owner you have to search for yourself, to identify those clips and to require elimination. To solve this problem Youtube had announced to install a software filter. But it is not in place. One month ago Viacom required to delete all clips that contain “Viacom material”.

Well, in summary it is all about business 2.0. In the last couple of months Youtube made agreements with Universal music, Sony BMG, Warner Music as well as with the TV stations CBS, NBC and BBC. Opposite to this Viacom seems to support other ideas. Possible targets might be another clip platform or even the establishment of its own video portal. At the end of the day every company wants to achieve a good market position in the battle for content delivery. Technical development in the last couple of years (in particular broadband services) enable customers to receive large amounts of data in “0” seconds, hence content is still the key. Last time (2000) we had some content as well, but not that type of data transport technology. If you own the content….you will win the customers.

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