Viacom demands its videos be removed from YouTube

Media company says it ran out of patience after months of discussions with Google and YouTube

Media conglomerate Viacom Inc. on Friday upbraided YouTube Inc. for continuing to host throngs of Viacom videos without permission and demanded that over 100,000 of its clips be removed from the popular video-sharing site owned by Google Inc.

Viacom, whose properties include MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central and Paramount Pictures, ran out of patience after months of discussions with Google and YouTube, the company said in a statement.

"It has become clear that YouTube is unwilling to come to a fair market agreement that would make Viacom content available to YouTube users," the statement reads.

YouTube and Google have failed to deliver efficient filtering tools so that "vast amounts" of unauthorized Viacom video exist on the video-sharing site, the company said.

YouTube acknowledged receiving a Digital Millennium Copyright Act request from Viacom to remove the videos. "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," YouTube said in a statement, adding that it will comply with the request.

Viacom's move is the latest from copyright owners who are upset over the unauthorized uploading and streaming of their videos on YouTube, which is one of the most popular Web sites in the world.

Viacom's action could establish a precedent and have serious consequences for YouTube, which could see its value to users and advertisers shrink, IDC said in a research note. "If Google and media companies cannot come to an agreement on the fair market value of content, Google may be left with the long tail of content -- paying the hosting and streaming costs for a huge catalog of content, each piece of which does not drive much traffic," wrote analysts Rachel Happe and Susan Feldman.

Meanwhile, Viacom could also be affected if its position angers consumers, the IDC analysts wrote. "Unlike the RIAA [Recording Industry Association of America], Viacom is not going after individuals, but that may not matter to users," they said. Viacom also risks missing out on the momentum of online video if access to its clips is too restricted. "Ultimately, it's not good for anyone that consumers cannot access content in multiple different ways, including on YouTube," Happe and Feldman wrote.

The copyright issue has long been a known liability for YouTube. Founded in early 2005, YouTube quickly became the world's most popular video-sharing site, beating established players including Yahoo Inc., Microsoft Corp.'s Internet unit, AOL LLC and Google.

Impressed with that popularity, Google bought YouTube last November for $1.65 billion in an all-stock transaction, but the company said it put 12.5% of the amount in an escrow account for one year to "secure certain indemnification obligations."

Since the acquisition, Google and YouTube have been busy negotiating with video content owners and developing technology to detect and remove copyrighted videos uploaded by users without permission.

Beyond its attempts to strike deals with corporations, Google has recently also indicated its intent to share revenue with individual content owners. It has also begun integrating YouTube with the similar Google Video service.

"We're pushing very, very hard for the success of YouTube as a brand. It has tremendous traction with the demographic that we care about. An awful lot of people are now using YouTube every day in their daily lives," said Google CEO Eric Schmidt this week during the company's quarterly earnings conference call.

Schmidt said Google's primary focus with YouTube is on user adoption while it also experiments with advertising models. YouTube is growing its user base and advertising very quickly, to the point that it's now clear to Google that the price it paid for YouTube is clearly justified, Schmidt said.

In its statement, Viacom complained that Google is benefitting from its content without providing Viacom with adequate compensation. "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," Viacom said.

Copyright © 2007 IDG Communications, Inc.

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