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Lawsuit over YouTube video: It's what everyone's watching

By Daniel B. WoodStaff writer of The Christian Science Monitor / March 23, 2007


At an Internet cafe here, Barry Delatto toggles his computer screen from stock prices to e-mail and finds a URL for YouTube, the free website where users can post and watch video clips.

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"It's [an e-mail] from my girlfriend," he says, clicking on a clip from the "Colbert Report," a mock-news TV show on Comedy Central. "I better watch this before the courts shut YouTube down. Either that, or make them pay so much nobody will do this anymore."

It's a scene repeated so often – 160,000 free video clips viewed at least 1.5 billion times – that Comedy Central's parent company, Viacom Inc., is asking the courts to make YouTube stop unauthorized postings of copyrighted video.

The suit has been followed by news Thursday that News Corp. and NBC Universal plan to create an online video site stocked with TV shows to compete against Google by controlling how their own shows are watched online. The new idea may launch as early as summer and help News Corp. and NBC from losing advertising dollars that have been siphoned off to the Web.

Viacom's lawsuit, filed March 13 in a US District Court in New York, seeks $1 billion in damages and asks the court to make YouTube, acquired by Google last year, halt the practice.

Much is at stake. Most obvious is billions of dollars in advertising for YouTube and Google. The outcome could also set precedent governing when and how video content crosses from TV screen to computer screen, as well as determine how Delatto and other users post, watch, and share videos online.

At the center of the case is a major federal copyright law: the 1998 Digital Millennium Copyright Act (DMCA). It endeavors to strike a balance between "promoting the continued growth and development of electronic commerce and protecting intellectual property rights."

"One [question] is whether the DMCA has teeth or can content owners sue hosting sites willy-nilly, thereby forcing such sites to block all content," says Mark Sigal, cofounder and CEO of vSocial Inc., an online video service provider. "Second is the larger question of whether consumers have the right to capture snippets of their favorite shows and virally distribute them. Is that a 'fair use'?"

No matter what happens – a finding for or against YouTube, or a settlement – the suit will help define the future of digital media for millions of users of online video sites, say experts.

The case "is the one everyone is watching because these are the two giants in the Internet kingdom, each representing a different philosophy on how to grow and succeed," says Leonard Fuld, president of Fuld & Co. in Cambridge, Mass., a research and consulting service for Fortune 500 companies. "Google wants to be the arbiter of all knowledge, and Viacom wants to control its own destiny, and those are sometimes competing objectives."

In its court filings, Viacom states that YouTube willfully infringes on copyrighted material from its shows on MTV Networks, VH1, Nickelodeon, Comedy Central, and other cable networks. It does so "on a massive scale," Viacom says, by streaming video snippets of shows ranging from "The Daily Show" to "SpongeBob SquarePants" to "MTV Unplugged" more than 1.5 billion times. The real number is much larger because, Viacom alleges, YouTube makes it difficult for copyrighted content to be easily detected.