Last Updated Mar 24, 2010 2:49 PM EDT
The company proved it can't sort out the good content from the bad, even with three years and hundreds of expensive lawyers. And while Viacom has been fiddling in court, YouTube has grown into a mature, legally sound business.
Viacom wants to equate YouTube with Grokster, an early file-sharing service that was shut down in 2006 over copyright concerns. Strengthening that case are emails from Google employees comparing YouTube to a "video Grokster" and discussing the "truckloads" of illegal content uploaded there every day. There is no question that in the early days, YouTube was rife with copyright infringement.
But the documents also reveal that Viacom just dropped 187 videos it originally claimed were infringing on its copyright. This follows 100 videos which were pulled back in December, after Viacom realized the videos were actually uploaded by its own employees. It's going to be difficult to argue in court that YouTube should be able to police thousands of hours of new content every day, when Viacom can't even identify its own clips after three years of intense legal research.
More importantly, during the past three years, YouTube has improved its standing as a business and brand. The site has developed a legitimate revenue stream for sponsored video and music, including $1 million in Viacom dollars from 2006-2008. From record labels to presidential candidates, YouTube is now a powerful, widely accepted platform for content.
The filing subtly reveals this. Viacom isn't pursuing litigation related to any clips after May 2008. Maybe deciphering which videos infringe copyright is so tough they've just given up pursuing new claims. But legal scholars believe it's more likely that even Viacom is satisfied with YouTube in its current incarnation. Viacom should quit crying over spilled milk. They're spending a lot of money to win a judgment against an incarnation of YouTube that no longer exists. The smart move for Viacom, and companies like them, would be to strengthen and expand the partnerships they now have with sites like YouTube to develop software that identifies copyrighted content. The faster this is accomplished, the sooner everyone can get out of court and go back to making money.