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.
Advantage: Google
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."
A day before the United States celebrates its independence, we continue to question our individual freedoms online. In Thursday's Daily Debrief, CNET News.com Editor in Chief Dan Farber and I discuss a federal judge's recent ruling in the ongoing Google-Viacom lawsuit that orders Google to turn over YouTube user activity. This will include videos watched, IP addresses, and usernames as part of an ongoing copyright infringement case.
Understandably, this news is disconcerting for YouTube users. Sources tell CNET News.com, however, that if Viacom uses this information for anything other than investigating piracy issues, it will be held in contempt of court. Regardless, Farber makes the point that this ruling could now set a precedent for other online privacy and security battles. Representatives from the Electronic Frontier Foundation agree, arguing that this court order will slowly erode the online rights we have come to enjoy and appreciate. Sounds like fireworks of a different kind this Fourth of July.
Viacom is getting its hands on some of YouTube's sensitive user data as a result of the copyright infringement lawsuit the conglomerate filed a year ago.
The two companies are in the discovery part of the case and must make certain information available to each other. On Wednesday, a federal judge ruled that Google must turn over YouTube user activity--videos watched, IP addresses, and usernames.
Google responded on Thursday in a statement to the court's order.
"We are pleased the court put some limits on discovery," Google said in the statement, "including refusing to allow Viacom to access users' private videos and our search technology. We are disappointed the court granted Viacom's overreaching demand for viewing history. We are asking Viacom to respect users' privacy and allow us to anonymize the logs before producing them under the court's order."
CNET News.com reported that Viacom is under strict instructions from the court not to use the data for anything other than proving the prevalence of infringement on YouTube.
Viacom, therefore, is forbidden from targeting individual users in the manner of the Recording Industry Association of America's lawsuits against individuals found to be downloading illegal music.
The case is important to Internet users because it could help define the scope of the safe harbor provision of the Digital Millennium Copyright Act. That's the part of copyright law that Google and other Internet service providers claim protects them from being held responsible for the actions of their users.
Don't look for the case to get to court anytime soon. The discovery part of the case isn't expected to end until sometime next year.
What might prove interesting in the meantime is that among the people Google has asked to depose are Jon Stewart of The Daily Show and Stephen Colbert of the The Colbert Report.
Google scored a legal victory in keeping its search source code secret from Viacom, but YouTube users were not so fortunate with their privacy.
A federal judge ruled on Wednesday (PDF) that the search giant doesn't have to turn over the code to Viacom, which filed a $1 billion copyright infringement lawsuit against Google in 2007.
In granting Google's motion for a protective order, U.S. District Judge Louis L. Stanton in Manhattan agreed with Google's characterization of the source code as a trade secret that can't be disclosed without risking the loss of business.
"YouTube and Google should not be made to place this vital asset in hazard merely to allay speculation," the judge said. "A plausible showing that YouTube and Google's denials are false, and that the search function can and has been used to discriminate in favor of infringing content, should be required before disclosure of so valuable and vulnerable an asset is compelled."
The judge also denied Viacom's motion for Google to produce source code for its Video Identification Tool, which helps copyright notify Google of copyright infringement.
However, the judge granted a Viacom motion that records of every video watched by YouTube users, including their login names and IP addresses, be turned over to the entertainment giant.
The Electronic Frontier Foundation called the ruling a threat to YouTube users' privacy.
"The court's order grants Viacom's request and erroneously ignores the protections of the federal Video Privacy Protection Act (VPPA), and threatens to expose deeply private information about what videos are watched by YouTube users," the EFF said in a statement.
At stake in the legal battle is a key part of the Digital Millennium Copyright Act (DMCA), the 1998 law that shields Web site owners from copyright infringement involving material published by users. The "safe harbor" provision in the law can protect against infringement claims as long as copyrighted material is removed upon notification.
After the suit, YouTube launched an antipiracy tool that checks uploaded videos against the original content in an effort to flag piracy.
Viacom's $1 billion copyright infringement lawsuit against YouTube "threatens the way hundreds of millions of people legitimately exchange information" over the Web, YouTube parent Google said in a legal response to the suit.
The response, reported by the Associated Press, was filed late Friday in U.S. District Court in Manhattan. Google says the threat comes from Viacom's attempt to make "carriers and hosting providers" liable for what people post. Google, by the way, has said this suit will only be resolved in court.
Viacom originally filed its lawsuit last year and filed an amended version last month. In the more recent version, the AP reported, Viacom said video-sharing site YouTube consistently allows popular, copyrighted material to be posted to its site, including from Viacom-owned MTV and Comedy Central. Viacom said that it has identified more than 150,000 unauthorized clips on YouTube and that the site has done "little or nothing" to stop the copyright infringement, the AP reported.
"The availability on the YouTube site of a vast library of the copyrighted works of plaintiffs and others is the cornerstone of defendants' business plan," Viacom said, according to the AP.
Google, in its response, said YouTube "goes far beyond its legal obligations in assisting content owners to protect their works." Google added that YouTube has faithfully followed the Digital Millennium Copyright Act and responded to claims of infringement.
Google is willing to fight Viacom all the way to the Supreme Court in the companies' legal battle over YouTube and pirated videos, but Viacom is taking a hard line of its own, executives from the companies said Wednesday.
David Eun, Google's vice president of content partnerships, told Dow Jones Newswires that Google has no plan to resolve the Viacom case outside court. "We're going all the way to the Supreme Court," Eun said. "We're very clear about it."
Separately, Viacom Chairman Sumner Redstone told Dow Jones he's standing up for broader principles.
"When we filed our lawsuit, we not only served our own interests, we served the interests of everyone who owns copyrights that they want protected," said Redstone. "We cannot tolerate any form of piracy by anyone, including YouTube...they cannot get away with stealing our products."
Viacom sued Google for "massive intentional copyright infringement" in 2007, seeking more than $1 billion in damages.
At stake in the fight is a key part of the Digital Millennium Copyright Act (DMCA), the 1998 law that shields Web site owners from copyright infringement involving material published by users. The "safe harbor" provision in the law can protect against infringement claims as long as copyrighted material is removed upon notification.
After the suit, YouTube launched an antipiracy tool that checks uploaded videos against the original content in an effort to flag piracy.
A screen shot of one of the shows offered at Logoonline.com
(Credit: MTV Networks)Execs at MTV Networks say the best way to distribute media over the Web is to "go an inch wide but a mile deep."
Instead of one central Web destination, Viacom-owned MTV Networks is building hundreds of sites around its content. An example of that strategy can be found at Logo, the unit that serves the gay and lesbian community.
Logo launched a new video hub on Wednesday that Lisa Sherman, Logo's general manager, said will feature 3,000 ad-supported clips and be the largest central library of videos for the gay and lesbian audience.
"This is the kind of content that has only been available at art houses," Sherman said. "But the LGBT (lesbian, gay, bisexual, and transgender) audience, can now check out content that has never been available to them nationally."
Some of the full-episode shows that can be found at Logoonline.com are Big Gay Sketch, Noah's Arc, and Outlaugh Festival on Wisecrack. Documentaries include Elephant in the Room and The Two Cubas.
There are also short clips, news, and music.
Sherman said the site reflects Viacom's "super niche" strategy, which is about delivering content to very small markets in addition to the big ones.
Logo's digital cable channel launched three years ago and is now available in 32 million homes in 25 markets.
A joint venture featuring heavyweight Hollywood studios is looking to fall 2009 to launch a premium television channel and video-on-demand service that will offer feature films and original television series.
The unnamed venture, and the unnamed channel it will produce, has the backing of Viacom and its Paramount Pictures unit; MGM Studios; and Lionsgate. Films to be offered will include new titles from Paramount and Paramount Vantage released in theaters after January 1, 2008, and new titles from MGM, United Artists, and Lionsgate released after January 1, 2009, according to a statement from the companies on Sunday.
The studios will also make available many older titles, including Braveheart, Forrest Gump, and The Blair Witch Project, along with titles from the Godfather, Star Trek, and James Bond franchises.
In addition, the venture will feature new, original television series.
The companies made no specific mention of an online component for the venture, but did make reference to "the digital marketplace of the future," and offered this rather generic promise: "We are building an innovative service that will use traditional and new digital distribution technologies to bring great film and television entertainment directly to the consumer."
LAS VEGAS--Big TV networks are rushing to attract Internet audiences, but there are signs that the payoff won't be that sexy.
One of the burning questions television broadcasters face is whether the Web can be mined for big advertising dollars. NBC Universal, CBS, and Viacom are just a few of the media conglomerates moving quickly to offer full-length TV shows over the Web.
What will surely be debated here this week at the National Association of Broadcasters' annual conference--which gets rolling on Monday--is whether the masses will welcome TV on a PC.
Actor Tim Robbins
What about commercials? Will audiences resent being forced to watch commercials online, when TiVo and other digital video recorder, or DVR, models enable them to skip ads on plain-old TVs?
Earlier this month, Toronto-based Convergence Consulting Group released a report (PDF) skeptical of TV's prospects on the Web and urged cable, satellite, and broadcast executives to stay focused on their traditional businesses.
"There is no current economic rationale for broadcasters and cable networks to abandon traditional TV or attempt to accelerate a transition to a total online model," the group said in its report. "To do so would put $66 billion in traditional TV advertising revenue and $30 billion in cable, satellite, (and telecommunications companies') TV provider programming fees at risk."
One of the main sticking points for online TV shows is commercials. TV executives are using the technology to once again ram ads down the throats of viewers. Convergence argues that in head-to-head competition, the public will choose traditional TV and commercial-zapping DVRs over watching on the Web.
The "bottom line," Convergence wrote, is that "the DVR will limit full-episode online viewing."
Meanwhile, NBC Universal trumpeted an important milestone last week. Hulu, the video portal founded by NBC and News Corp., sold out of available ad inventory after being open only a month. NBC President Jeff Zucker announced that Hulu is looking for ways to make more ads available.
Director Doug Liman
In addition, the Associated Press reported Saturday that networks are getting better ad rates for Internet distribution than they are for traditional broadcasts.
"Advertisers pay more online because there is a better accounting of how many viewers see the ads," the AP wrote. "An extra benefit that an impulse to purchase can be acted on with the click of a mouse."
NAB notes
Actor Tim Robbins, star of the "The Shawshank Redemption" and "Mystic River" is scheduled to give the opening keynote address at NAB. Robbins will speak about how new content and distribution methods will impact Hollywood.
Other notables due to speak at the conference are Jeffrey Katzenberg, CEO of Dreamworks Animation; Doug Liman, director of The Bourne Identity; and Jason Kilar, CEO of Hulu.
Someone apparently hacked into a computer belong to an employee of MTV Networks and possibly gained access to names, birth dates, social security numbers and compensation data of 5,000 employees.
MTV Networks, a unit of media conglomerate Viacom, notified employees of the security compromise on Friday and said that while the computer files pertaining to employees' private information were password protected, the company can't be sure they haven't been opened.
"Once we learned of the incident, we immediately launched an internal investigation," the company said in a statement. "We ... contacted appropriate law enforcement authorities, who have begun a criminal investigation."
The company apologized to employees and provided phone numbers to credit-monitoring services to help protect them from identity theft.
