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Business

Google faces $1 billion business model risk

GOOGLE AT RISK!
Written by Donna Bogatin, Contributor on
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IT'S OFFICIAL: Viacom has sued YouTube and Google in U.S. District Court for the Southern District of New York for massive intentional copyright infringement of Viacom's entertainment properties. The suit seeks more than $1 billion in damages, as well as an injunction prohibiting Google and YouTube from further copyright infringement.

In Viacom's own words:

YouTube is a significant, for-profit organization that has 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. Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws. In fact, YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden - and high cost - of monitoring YouTube onto the victims of its infringement.
This behavior stands in stark contrast to the actions of other significant distributors, who have recognized the fair value of entertainment content and have concluded agreements to make content legally available to their customers around the world.

There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process. This is value that rightfully belongs to the writers, directors and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity.

After a great deal of unproductive negotiation, and remedial efforts by ourselves and other copyright holders, YouTube continues in its unlawful business model. Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused.

TAKE THE POLL: Is Google afraid of big, bad Viacom?

ALSO: Google: Internet bubble 2.0? and Google vs Old Media: Who needs YouTube? and Why Google will never pay for content and YouTube: What Google CEO Eric Schmidt really thinks

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