- The Washington Times - Tuesday, March 13, 2007

NEW YORK (AP) — Big Media took its first big swing at YouTube yesterday as Viacom Inc., the owner of MTV, VH1, Comedy Central and other cable networks, filed a $1 billion copyright lawsuit against the video-sharing site and corporate owner Google Inc.

The lawsuit marks a sharp escalation of long-simmering tensions between Viacom and YouTube and represents the biggest confrontation to date between a major media company and the hugely popular site, which Google bought in November for $1.76 billion.

Last month, Viacom demanded that YouTube remove more than 100,000 unauthorized clips from its site, and since that time the company has uncovered more than 50,000 additional unauthorized clips, Viacom spokesman Jeremy Zweig said.

A quick search of YouTube’s site yesterday turned up numerous clips from Viacom programs including segments from Comedy Central’s “The Daily Show With Jon Stewart” and Nickelodeon’s “SpongeBob SquarePants” cartoon.

In the lawsuit, filed in U.S. District Court in New York, Viacom says YouTube “harnessed technology to willfully infringe copyrights on a huge scale” and had “brazen disregard” of intellectual-property laws.

YouTube’s soaring popularity has been a cause of fascination but also fear among the owners of traditional media outlets, who worry that YouTube’s displaying of user-uploaded clips from their programs — without compensation — will lure away viewers and advertising dollars from cable and broadcast TV.

Viacom is especially at risk because many of its shows are aimed at younger audiences who also are heavy Internet users. At the same time, Viacom is trying to find other, legal ways to distribute its shows digitally, such as by selling episodes of “The Daily Show” and “South Park” for $1.99 each through Apple Inc.’s ITunes service. Those shows can then be viewed on a computer or video IPod.

Google said yesterday it believed the courts will agree “that YouTube has respected the legal rights of copyright holders.”

“We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube and its ability to attract more users, more traffic and build a stronger community,” Google said.

YouTube says it cooperates with all copyright holders and removes programming as soon as it is notified. But Viacom argues that approach lets YouTube avoid taking the initiative to curtail copyright infringement, instead shifting the burden and costs of monitoring the site onto copyright holders.

Other media companies also have clashed with YouTube, but some, including CBS Corp., have agreed to provide some clips to the site. CBS Corp. used to be part of Viacom but has since split off into a separate company.

Universal Music Group, a unit of France’s Vivendi SA, had threatened to sue YouTube, saying it was a hub for pirated music videos, but later reached a licensing deal with them.

Bruce Sunstein, co-founder of intellectual-property law firm Bromberg & Sunstein in Boston, said YouTube was still in the early stages of what was likely to be a “very long working-out of arrangements” with the owners of broadcast copyrights.

Unlike the original Napster file-sharing service, which was shut down after complaints from music companies that it encouraged piracy, Mr. Sunstein said he expected YouTube and its corporate owners to eventually make peace with broadcasters.

“I think YouTube very much wants to be legitimate,” Mr. Sunstein said.

That doesn’t mean other lawsuits won’t follow Viacom’s. Other media companies may join the fray, warned Standard & Poor’s analyst Scott Kessler in a research note.

A major lawsuit against YouTube has been widely anticipated because so much of the online video pioneer’s success has been driven by easy access to copyrighted clips shared by its users.

While YouTube has yet to generate much revenue, its online traffic has been growing rapidly. According to ComScore Media Metrix, YouTube attracted 133.5 million visitors worldwide in January, up from 9.5 million a year earlier.

Google shares fell $11.72, or 2.6 percent, to close at $443.03 yesterday on the Nasdaq Stock Market amid an overall decline in the stock market, while Viacom’s Class B shares fell 9 cents to $39.48 on the New York Stock Exchange.

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