Earth To Viacom: You're Being Kinda Dumb

The name ‘Viacom’ may not be familiar to some of you, but at least some of the media conglomerate’s assets probably are:

• Film Production and Distribution: Viacom International, Paramount Pictures, Republic Pictures, MTV Films, Nickelodeon Movies, Go Fish Pictures
• Television Networks: Comedy Central, Logo, BET, Spike, TV Land, Nick@Nite, Nickelodeon, TeenNick, Nick Jr., MTV, VH1, MTV2, CMT, Palladia

As you can see from the above list, the bulk of the company’s business is in ‘old’ media distribution channels; cinema and various television services. As such, you might suspect that Viacom is (like its peers in the music business) less than enthusiastic in its embrace of the realities of ‘new’ media distribution, i.e. the Internet. And you’d be right, judging from some of the company’s recent actions.

A writeup the other day in Maximum PC prompted me to finally going on this long-planned piece. Back in March of 2007, Viacom filed a $1 billion USD lawsuit against YouTube (which Google had only recently acquired), claiming ‘brazen’ copyright infringement in the form of Viacom-owned content (such as the Daily Show With John Stewart and the Colbert Report) posted on YouTube. But Viacom’s complaint seemingly ignores the fact that YouTube users, not the company itself, are the ones who did the uploading of the infringing content. YouTube is an Internet service. And just as is the case for Internet service providers, the DMCA (Digital Millennium Copyright Act) includes a Safe Harbor provision that documents a loophole critical to this legal dispute:

DMCA Title II, the Online Copyright Infringement Liability Limitation Act ("OCILLA"), creates a safe harbor for online service providers (OSPs, including ISPs) against copyright liability if they adhere to and qualify for certain prescribed safe harbor guidelines and promptly block access to allegedly infringing material (or remove such material from their systems) if they receive a notification claiming infringement from a copyright holder or the copyright holder’s agent. OCILLA also includes a counternotification provision that offers OSPs a safe harbor from liability to their users, if the material upon notice from such users claiming that the material in question is not, in fact, infringing. OCILLA also provides for subpoenas to OSPs to provide their users’ identity.

So why is Viacom still pursuing its case, three years later, in spite of the fact that its own iFilm subsidiary is doing the very same thing that it’s trying to put a stop to at YouTube, and in spite of the fact that a YouTube competitor won a conceptually similar case last fall? Specifically, Viacom hopes to find evidence that YouTube employees were among the folks doing the uploading for financial or other reasons (while also hoping to not find evidence that Viacom employees were also in on the game). More generally, I suspect that Viacom is hoping to use this case to get the Safe Harbor provision of the DMCA overturned (thereby explaining the ‘kinda’, versus ‘totally’ in this post’s title), which if successful would have a chilling effect on the Internet going forward. As such, I’m hopeful that the courts will quickly put an end to Viacom’s abuse of the legal system, no matter how many high-priced lawyers Viacom might throw at the case. I’m hopeful, but I’m also admittedly cynical. Stay tuned.

Here’s the irony; seven months after filing the lawsuit against YouTube, Viacom put the Daily Show archive on its own branded website. The following summer, Viacom struck a deal with Hulu to also host its material. And nine days ago, Viacom changed its mind and pulled both the Daily Show and Colbert Report from Hulu (this coming on the heels of a threat to pull all Viacom content from Time Warner Cable several months ago). Since I don’t have a pay television subscription, I’ve long enjoyed watching both Hulu-hosted shows on my TV via PlayOn and Xbox 360 intermediaries. So near-term I’m a bit bummed. But long-term, I doubt I’ll be without my favorite two political humor shows for long.

PlayOn is part of the reason why. My MediaMall Technologies contact, in response to an email I sent last Thursday asking "Any possibility of streaming these shows directly from the Comedy Central website to PlayOn in the future, as you do with ESPN etc?" quickly responded "Likely in the near future…" And finances are the other reason why I bet Viacom will soon realize the error of its ways and re-embrace Hulu.

Viacom’s decision was an obvious bet to drive all of the Daily Show and Colbert Report viewer eyeballs to its own site, where it wouldn’t need to share the resultant ad revenue with Hulu or anyone else. But much as it might think that YouTube, Hulu and other content aggregation sites are dependent on it, I think Viacom will quickly comprehend the allure of such aggregation to viewers, as it sees its shows’ online traffic plummet. And like NBC, which pulled its material from Apple’s iTunes service in late summer 2007 only to return to the negotiating table shortly thereafter and back to iTunes one year later, Viacom will soon realize that a slice of a large shared-advertising revenue pie is more lucrative than an entire, smaller, Viacom-only pie.

Viacom and its peers in the video content world are in many ways acting just like their record label predecessors, a situation which (in spite of the fact that I understand its deluded human nature foundations) I find completely baffling from a ‘Those who cannot learn from history are doomed to repeat it’ standpoint. If Viacom were to embrace inevitability, allowing clips from various shows it owns to be posted on sites other than its own, along with full episodes on sanctioned partners’ sites, I have no doubt that it’d experience the upside of new audience cultivation.

Instead, Viacom is predictably brandishing the lawsuit saber. And just as with music before it, all that’s going to happen as a result is that folks are going to turn to P2P services such as BitTorrent tracker sites to get their John Stewart and Stephen Colbert fixes, in the process cultivating life-long and generations-passed-down attitudes that such material is value-less.

Sigh. When will they learn?