Despite winning an important legal victory against Google last week, Viacom's public image is taking a beating.
Ever since Viacom, parent company of MTV and Paramount Pictures, filed a $1 billion copyright suit against Google's YouTube last year, Google has won kudos for championing the rights of Internet users. On the other side, Viacom was blasted by critics who accused it of trying to lock down information and block people from enjoying South Park and The Daily Show.
Neither of these two perceptions is entirely accurate. But what is true is that there is little Viacom--or any other big media firm trying to enforce its copyright online--can do to avoid being saddled with the image of a corporate bully. Companies considering whether to follow Viacom's lead should carefully weigh the risks of potentially alienating consumers.
Last week, Viacom was widely criticized on the Web after a judge ordered Google to turn over information that included YouTube usernames, Internet Protocol addresses and the viewing histories of YouTube's users. Viacom representatives denied that the company had ever requested any personally identifiable information.
By then, the damage was done. Viacom was branded an enemy of the Internet and of privacy. This kind of public relations drubbing shouldn't come as a surprise to anyone.
Look at what Viacom is up against. Many Internet users have simply come to think of free Internet content as their right. Any attempt to restrict access is perceived as an attack on Web freedom. Google, which has a long history of facing down copyright owners, including book publishers, newspapers, and Hollywood studios, has earned respect from those who see content owners as money grubbers and many copyright laws as anti-consumer.
Google is also savvy when it comes to public-relations scuffles, say critics. Not all of Viacom's image problems are self inflicted, says Louis Solomon, an attorney representing a group of copyright holders who have sued YouTube for copyright infringement and are working with Viacom.
"I think there is little doubt that Google has been trying to be effective in its use of the press," Solomon said. "How else do you explain why they have been collecting and using IP addresses to monetize their site (for a while now), yet only now, with great self righteousness, claim to be concerned about producing IP addresses?"
Responding to Solomon's assertion, Ricardo Reyes, a Google spokesman, said Viacom's ailing public image can be traced to another Google advantage.
"The law is on our side," he said.
A judge will be the one to determine that. What is more certain is that Google has been more willing than Viacom to debate the case in public.
Last year, Google CEO Eric Schmidt made news several times by suggesting that Viacom was overly litigious. At a conference in April, Schmidt said this about Viacom: "You're either doing business with them or being sued by them."
At a retreat for media and tech CEOs, Schmidt claimed Viacom was a company "built on lawsuits."
And this week, Viacom's supporters, such as Solomon, accused Google of helping to whip up controversy over the privacy issue.
Google-Viacom deal in the offing?
On Monday evening, sources close to the discussions between Google and Viacom said they were close to reaching an agreement which would allow YouTube to redact IP addresses and usernames.
Did the bad PR affect Viacom's decision? A company's public image certainly can impact business.
Companies dueling it out in court often hire public relations firms to take their case to the masses. They may sense that their opponent is sensitive to negative press. A well-designed PR strategy can hurt the other guy's bottom line, and possibly bring on a settlement.
One way Viacom could instantly improve relations with Internet users is to simply drop the lawsuit, according to Erick Hachenburg, the CEO of Metacafe, a video-sharing rival of YouTube's.
Hachenburg argues that content companies have to decide between one of two ways to handle copyright issues on the Web.
He said the first way is the one chosen by Hulu, the video portal created by News Corp. and NBC Universal. Hulu allows users share videos and the company has syndicated content across the Web (Viacom has traditionally preferred to host its own content but has recently been boosting the number of syndication deals).
The alternative to the Hulu-esque strategy is to follow in the footsteps of the Recording Industry Association of America and solve problems with lawsuits.
"I hope Viacom doesn't use the (YouTube user) information to sue consumers," Hachenburg said. "Clearly there is an underlying question: how much do you want to adapt your strategy to live in Web. 2.0? Hulu is embracing Web 2.0 ideas, and I think they are finding success."