i'm engaging in the kind of piracy this article talks about, but I wanted it n front of you tonight because it's a big aspect of the youtube thing
The Wall Street JournalOctober 14, 2006; Page A3
In an apparent display of saber-rattling aimed at nudging video Web site YouTube Inc. into cutting favorable licensing deals, a number of major media companies have banded together to explore the legal implications of the video site's unauthorized use of copyright material, people familiar with the matter say.
The move comes just days after YouTube agreed to be acquired by Google Inc. for $1.65 billion. If the deal goes through, deep-pocketed Google could be held responsible for YouTube's legal liabilities.
YouTube, a hugely popular video-sharing site, carries both homemade videos, as well as professionally produced video clips from television networks and movie studios -- some uploaded illegally by users, and some available with the companies' consent. YouTube contends that it hasn't run afoul of copyright laws, because it immediately removes clips when rights holders complain about their inclusion on the site.
But lawyers for the group of media companies, which includes News Corp., General Electric Co.'s NBC Universal and Viacom Inc., have concluded that YouTube could be liable to copyright penalties of $150,000 per unauthorized video, people familiar the matter say. Viacom believes that pirated versions of video clips from its cable channels -- including MTV, Comedy Central and Nickelodeon -- are watched 80,000 times a day via YouTube. At that rate, potential penalties could run into the billions of dollars.
Time Warner Inc. hasn't joined the group, but has also warned YouTube about what it considers to be the site's repeated infringement of its copyrights. In an interview that appeared in Britain's Guardian newspaper Friday, Time Warner Chief Executive Richard Parsons made ominous hints about what course he would pursue if YouTube doesn't agree to a deal.
Whether the media companies eventually will file legal action is unclear, but the legal maneuvering comes as each of them is holding separate negotiations to allow YouTube to carry their programming in return for a slice of advertising revenue. Executives hope the possibility of legal action could prompt YouTube to improve terms it offers the media companies, according to people familiar with the matter.
The media companies have an ambivalent view of Google. On the one hand, they fear its size and clout. On the other hand, the media companies know that Google can be a valuable partner in distributing their content around the Web and also in drawing advertising. Indeed, Google already has separate links through partnerships and ownership stakes to a number of media companies, a fact that could ease the companies' negotiations with YouTube.
YouTube has been negotiating with content owners throughout the year as it tries to reach licensing pacts with them and head off any copyright lawsuits. So far, YouTube has struck deals with TV companies NBC Universal, CBS Corp. and with most of the major music companies, including Warner Music Group Corp., Vivendi SA's Universal Music Group and Sony Corp.'s and Bertelsmann AG's joint venture. YouTube is building a system that would help automate identification of videos containing copyright material on its site, and allow the content owners to get a portion of any related ad revenue.
The negotiations leading up to those pacts have sometimes included public criticism of the video-sharing site. Universal Music CEO Doug Morris told investors last month that YouTube violated copyright laws by allowing users to post music videos and other content. Universal Music had considered taking legal action against YouTube over that issue prior to announcing its pact with the video site Monday, say people familiar with the matter.
The media companies now contemplating legal action have generally turned a blind eye to YouTube's use of their video. One reason for such tolerance is that the site guarantees their programs a degree of exposure hard to find elsewhere on the Web.
In June, NBC inked a deal with YouTube to make available promotional video clips for some of its popular programs, including "The Office" and "The Tonight Show." But NBC has had repeated run-ins with YouTube over its use of videos the company hasn't approved. It has been asking the site to take down as many as 1,000 clips a month, according to a person familiar with the matter.
The person says that Google's involvement with YouTube has added a sense of urgency to the negotiations for a resolution, because the deal is likely to sharply improve the video site's reach.
Google said that pacts it and YouTube announced this week with content owners demonstrate their "commitment to respect the rights of content owners and to work with them to create new revenue streams."
The media industry has been keen to avoid the mistakes music companies made in attacking Napster, an online service that allowed users to download pirated music. Although the original version of Napster was shut down, the move also spawned scores of imitators that continued to undermine the industry's business model. Meanwhile, music-industry litigation relating to Napster has dragged on for years.
Legal experts debate how much liability YouTube faces. Some say that YouTube has the benefit of a set of special "safe harbors" enshrined in the Digital Millennium Copyright Act of 1998. Under that process, Web-hosting sites such as YouTube have to comply with "takedown" notices that copyright holders may send when they become aware of content uploaded without their permission. Some entertainment companies have privately expressed frustration with the process, since it requires them to track down infringing works on a multitude of video-sharing sites.
"YouTube looks to be on relatively firm legal ground," said Fred von Lohmann, a lawyer at the Electronic Frontier Foundation in San Francisco. But, according to John Palfrey, an intellectual-property professor at Harvard Law School, media companies will argue that YouTube shouldn't fall within the safe-harbor protections of the copyright law because, among other reasons, YouTube is deriving direct financial benefit from the infringement.
YouTube already faces a copyright suit filed in July in U.S. District Court by Los Angeles News Service owner Robert Tur over several videos he alleges appeared on the site without his permission