The simmering tension between Hollywood and the new Google/YouTube combination exploded on Friday as Viacom demanded that the viral video giant take down every single clip of its copyrighted content after talks about a revenue sharing and distribution deal between the two companies broke down.
YouTube said it will comply with the request, though it will likely be a long process as Viacom identified more than 100,000 clips from MTV, Comedy Central, BET, Paramount, and its other properties.
After more than a year of tolerating huge amounts of its content being illegally uploaded onto the site, Viacom is now issuing the massive legal takedown notice in an attempt to pressure Google and YouTube to bend its way in negotiations. Thus far, companies have been unable to reach terms on a formula to give Viacom a portion of the advertising money generated by its clips.
Conglom also expressed frustration that YouTube has not yet fully implemented a long-promised content identification system that would allow it to identify and automatically delete copyrighted clips, or let media partners share in the revenue from ads around the content they own, regardless of who posted it.
Viacom apparently concluded that private talks wouldn’t go its way and took the dispute public, issuing a hostile public statelent saying that Google and YouTube are “unwilling to come to a fair market agreement that would make Viacom content available to YouTube users.”
While no other congloms are currently joining Viacom, all are in some stage of active negotiations with YouTube and many are also believed to be frustrated by their inability to reach a deal.
All are hoping to get a big payout from YouTube’s new owner, Google, which bought the website for $1.65 billion last fall. Search giant ended 2006 with nearly $4 billion cash and has a market cap of close to $150 billion.
In the meantime, however, all are passively allowing YouTube to keep up many clips of their content. By not issuing takedown notices, as Viacom did, they’re demonstrating they think the video site has some promotional value, or that they don’t want to alienate its users.
Viacom previously had the same strategy. Even in October, when it asked the Netco to take down only about 10,000 of the longest clips of its shows, it allowed tens of thousands of shorter ones to stay online.
News Corp., which has its own Web properties like MySpace and isn’t as dependent on YouTube to distribute its content online, also hasn’t been getting along well with the video site recently. Last week it demanded that YouTube not only take down episodes of “24” and “The Simpsons,” but identify the users who uploaded them.
If other traditional media companies aren’t able to find common ground to forge an agreement with Google and YouTube, then there will likely be more public disputes and takedown requests.
In a worse case scenario, there could potentially be copyright infringement lawsuits, like those Universal Music already filed againt video websites Grouper and Bolt.com.
“With the News Corp. issue and now this, you’re seeing the first sparks of something that could ignite in the future,” IDC research manager Rachel Happe said.
Several big media congloms have also been talking about launching a YouTube competitor with all of their content pooled together. But insiders say that while the talks aren’t dead, it’s unlikely there will be an agreement anytime soon.
CBS is the only network to have pacted with YouTube, along with record labels Universal, Warner, and Sony BMG.
However, all four agreements, reached in the fall, included YouTube rolling out the content identification system as a key provision.
Though it was promised by the end of last year, YouTube is still working on deploying it.
“Content identification architecture is not one single component, but rather a collection of tools for our partners, some of which are already in use,” YouTube co-founder Chad Hurley told Daily Variety in a statement. “We will continue to evolve these tools and roll out additional components over time.”
Big media execs have been increasingly friendly toward websites that are earning money off their content, recognizing that ignoring or attacking them could alienate young consumers.
In fact, Viacom itself even pacted with Google Video last summer for a test of an ad-supported video syndication service.
But it was clear that the seas between Hollywood and Silicon Valley may be getting choppy again in the two companies’ public statements issued on Friday.
“Filtering tools promised repeatedly by YouTube and Google have not been put in place, and they continue to host and stream vast amounts of unauthorized video,” Sumner Redstone-led conglom said. “YouTube and Google retain all of the revenue generated from this practice, without extending fair compensation to the people who have expended all of the effort and cost to create it.”
By the afternoon, YouTube shot back that “It’s unfortunate that Viacom will no longer be able to benefit from YouTube’s passionate audience which has helped to promote many of Viacom’s shows.”
Conglom noted that it has a broad array of Web properties that feature its content. However, none match the availability and ease-of-use of YouTube.
MTV-owned IFilm, for instance, legally posts full episodes of shows like “The Colbert Report” and “Laguna Beach,” but doesn’t have nearly as many clips. In addition, YouTube users often cut up episodes to show only the exact moments that are most popular.