By Richard Menta 3/13/07
Viacom announced today that it is suing YouTube and its parent Google for $1 billion over claims that videos from Viacom properties posted on the site constitutes copyright infringement. The suit, which was filed in the U.S. District Court for the Southern District of New York, seeks both monetary damages and an injunction that will force YouTube to prevent the use of such clips. In a statement Viacom said built a lucrative business out of exploiting the devotion of fans to others creative works in order to enrich itself and its corporate parent Google.
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The suit follows several months of sabre rattling by Viacom which declared the YouTube business model is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws.
Other media companies have complained about YouTube, but several, including CBS and NBC, reached revenue sharing agreements with Google to allow the clips to continue to remain online. Furthermore, CBS attributed an increase in the broadcast viwership of some of its shows to YouTube.
Several months of negotiations between the two companies broke down last month as neither company could come to financial terms. It is very possible that the lawsuit itself is overall just part of an agressive strategy to extract much more favorable revenue sharing terms from cash-rich Google. Ultimately, court is expensive for both sides and no one knows for sure what favorable or unfavorable precedents may be set during the course of the trial. That means there is strong incentive for both sides to come to terms before a judge gets into the heart of the case.
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