• by Mike Bloxham , Op-Ed Contributor, March 14, 2007

At one level, the spat between Viacom and Google’s YouTube that finally went legal yesterday could be seen as the Goliath of Big TV, in the form of Viacom, calling out the David of Little TV, in the form of YouTube, to resolve their differences once and for all in a good old fashioned courtroom dust-up of biblical proportions.

But it really isn’t so easy a characterization.  After all, David’s big brother, in the form of Google, has a bigger cash pile and every bit as much legal muscle to bring to bear as Viacom, and will be more than willing to do so.  YouTube has way more Web traffic than anything Viacom can offer (or any of the other media conglomerates with the exception of News Corps’ MySpace) and Google’s share price is more than ten times the size of Viacom's. Who's Goliath now?

On Viacom’s side -- at least ostensibly -- is the precedent of copyright law (at least to some extent).  To date, YouTube has been good about taking down illegally posted clips when notified of their existence, in compliance with the Digital Millennium Copyright Act.  But Viacom is claiming that this unfairly puts the burden on it to monitor and report violations -- and it wants that to stop.

The argument for YouTube is that it has done what the law requires, responding when asked to.  But now the company has gone from scrappy start-up to being part of Google.  Understandably, that rankles a lot of folks in Big TV who are looking to emulate YouTube’s success in whatever way they can, which means ring-fencing their own content. 

How this will ultimately turn out is anyone’s guess. Many of you no doubt have opinions.  Maybe this is just Viacom using the courts to force a conclusion to negotiations between the parties that it has made no secret of finding frustrating.  Bearing in mind the complexity of the issues and the schizophrenic relationship that Big TV has with YouTube, this may be the optimal solution.

After all, different content owners take different approaches to YouTube and how to respond, ranging from cutting deals for distribution to sending in the legal team and mailing out endless streams of cease and desist letters (NBCU does both).

All of this makes the music industry’s response to Napster look like a smoothly run campaign in comparison.   A recent article in Variety shows brilliantly just how conflicted the TV industry is about YouTube -- seeing it as threat, partner, promotional platform and model for their own evolving propositions, all at the same time.

There is a Catch-22 in all this however, that underpins Big TV attitudes to YouTube.  Viacom and the others are driven by a need to protect their historical position in a media hierarchy that simply isn’t the same as it was (an unavoidable necessity for any publicly traded company where quarterly profits rule the day).  At the same time, they must try to figure out how to optimize the potential of vehicles like YouTube (or their own versions, should they attempt them).

The problem with the latter part of this challenge is that risk and uncertainty are inevitably higher, as the underlying lessons have yet to be learned.  That means these companies will endure loss-making initiatives in their pursuit of the answer, until such time as they identify their optimum solutions.  This is real-time, out-in-the-open R&D, but too much of it and institutional shareholders become tetchy.

But there is also a simpler fact that appears to be overlooked in the current scenario.  Even if we assume that Viacom is successful in its action against YouTube / Google, and even if that results in some of the touted filtering software being deployed to screen out illegal content, it doesn’t address the fundamental challenge.

If someone who wants to post a clip from a favorite show online can’t do it at YouTube, they’ll do it somewhere else.  If they can’t find their favorite TV where they want it, they’ll increasingly put it there themselves.  And experience shows that the fact it is illegal and discouraged will not drive those people to the site of the rights owner.  They’ll head to their destinations of choice based on a sense of ownership and belonging and -- of course -- if there’s an enjoyable experience to be had.  The only hope for this lies with the marketing and creative people, not with the lawyers.

Of course, I’ve been wrong many times before and will undoubtedly be so again, but I’d be prepared to bet that this particular battle of the titans will be settled out of court -- partly because there’s too much at stake that has yet to be fully defined, and no one wants to risk being shackled in ways that ultimately may not work to their advantage.

What do you think?