The question we raised at the launch of Google TV was just how was Google going to fill the device with content, given that it is in a legal battle with one of the major US content producers, Viacom, the one content owner that it has always most wanted to court.
Instead it ended up IN court with Viacom and that question has now been answered with the almost pointless court decision that Google’s YouTube has no case to answer, delivered by a District Court as the first step in the Viacom-Google battle over copyright infringement.
It’s funny that lawyers have such a difficult time sorting out messes like this. Two things are clear to any consumer who has ever used YouTube ‘ yes it does infringe on copyrighted material, and no they have no real problem with that.
Since the decision is technically the ‘wrong’ one for content companies Viacom is duty bound to continue its search for justice with an appeals court. It will take this one all the way to the Supreme Court, if allowed to and in the end only a decision that tells YouTube to ‘proactively’ remove content which it can discover is copyrighted, would end the process. Unless of course Google appealed, which it surely would. If this battle continues there will be no decision from an appeals court for at least a year and no decision from the US Supreme Court for yet another year, which brings us to mid 2012.
If Google TV has to wait that long to find peace with Viacom, it risks ceding the over the top video market to other players, led by Hulu, TV Everywhere and Apple, as these two years will be vital in the mindshare land grab for OTT customers.
Apple went through this process during the early days of music piracy. It placed adverts which used evocative words like ‘rip,’ and ‘burn, ‘so easily transposed with ‘rip off,’ a universal slang for stealing, here applied to content, and all the record labels and studios got up in arms about it. It was soon forgotten about once Apple removed the wording, and softened its image and began to court the record labels, and the rest is history.
Google needs to bring Viacom into discussion once again and this time soften its approach. It’s current intransigent position is that it has done no wrong, because it has another, non-infringing use ‘ User Generated Video ‘ and so while there IS infringement, it does not ONLY live on infringement. As a result this is the same situation as the original Supreme court decision over the use of VHS tapes.
In a similar way the Grokster Supreme Court decision was that there was no need for any new law, because had Grokster been found guilty of encouraging copyright infringement using existing laws, the Supreme Court made it clear it would back such a position. Again this was due to the fact that Grokster did nothing else BUT direct people to where copyrighted information could be stolen. It had no significant other use.
We would argue that actually YouTube has become THE nexus for UGC, ONLY because of its abuse and that’s more or less the same as the 30 year old VHS decision. VHS tape COULD be used to put your family films on, but it was ONLY used for that as an afterthought, at the suggestion of the companies pushing the product, it was Really used to infringe copyright.
This is a tough question, and it’s a matter of balance. A single VHS tape was usually watched by one family, perhaps 3 or 4 times. A tiny few of them are used to create a pirated analog file which can be passed through a DVD recorder or PC and be digitally re-encoded, and then uploaded to internet P2P sites. At the time of the VHS decision, had the Supreme Court understood fully that this would happen 20 years later, it might have taken a different view of VHS.
YouTube videos can be uploaded by anyone, for viewing by anyone else. This fundamentally changes the extent to which revenue for studios is impacted. Who knows what the US Supreme Court might come up with in order to return things pretty to much what they were in the past ‘ to the old status quo.
Our own view is that risking an appeal or a Supreme Court decision going against them, is too big a risk for Google. As it stands now, a company that it wanted a content deal with 4 years ago, has two more years of legal actions against it before it can consider a deal. In the future it could find itself on the wrong end of either of the next two decisions.
One thing that other observers have been keen to point out is the way the Grokster decision was thrown out of court, in essence the court saying that this instance was not similar to Grokster. But what it means by this is that it is not identical to Grokster ‘ however the result is largely the same, a large group of people can watch content that belongs to someone else, for nothing. So this case and the possibility that YouTube is positioned not as an infringer in its own right, but as an agent encouraging infringement, needs to be squashed and we think the initiative needs to come from Google ‘ before it’s too late and it finds it has lost the momentum on YouTube.
For instance what if Google said to Viacom ‘ ‘We will proactively look for your content and stop it loading, as long as you let us have say 5% of ANY single piece of Viacom content or 5 minutes of video, whichever is the smaller, and allow us to give it away for free.’
Google might even say that where it offers such free snippets, any advertising revenue achieved on those pages, might be shared, with a significant minority going to the content owner.
By proactively, we mean that every time a video is uploaded to YouTube it is subjected to a video fingerprint analysis and compared to a database of video. YouTube could provide tools to studios to upload their own video to create a fingerprint, and as a result create the largest video fingerprint database in the world.
Instead YouTube has always taken the view that if it loses pirated content it is in trouble, and has therefore left the onus on studios to provide it with take down notices of any content which they finds on the site. And in order to use YouTube tools to help them do this, the studios HAD to sign up with Google to give it online distribution rights to the entire work. This HAS to be wrong. You can’t promise to obey the law only if someone will do business with you.
But if any court decides that losing its pirated material will harm YouTube, this may well influence it. It might see this as making the situation MORE like Grokster and less like VHS.
Such a compromise as the one suggested above would give Viacom what appears to be a victory and give Google a potential position as the iTunes of video content, instead of allowing Hulu the chance to grow into that role.
Both sides in the first court battle agreed to a summary judgment at the lower court level, not because they wanted to get this case over with, but to get what they both probably see as an irrelevant decision out of the way, so they can get on with the real fight at Appeal and eventually in front of the Supreme Court. But a conciliatory move now by Google and YouTube has the power to single handedly change the landscape for US Over The Top video.
Viacom has so far issued this statement, ‘We believe that this ruling by the lower court is fundamentally flawed and contrary to the language of the Digital Millennium Copyright Act, the intent of Congress, and the views of the Supreme Court as expressed in its most recent decisions. We intend to seek to have these issues before the US Court of Appeals for the Second Circuit as soon as possible. After years of delay, this decision gives us the opportunity to have the Appellate Court address these critical issues on an accelerated basis. We look forward to the next stage of the process.’