Saturday, March 20, 2010

Advertising v. royalties, QED

So are copyright owners harmed or helped when their material gets uploaded to YouTube? Are they being deprived of well-deserved royalties, or does the exposure count as free advertising that ultimately benefits them beyond any fees they could have realistically commanded?

The recently-released documents regarding Viacom's lawsuit against Google would seem to dispose of that question. It appears that even as Viacom was suing Google over unauthorized uploads, they were aggressively using YouTube as an indispensable marketing tool. The word-of-the-moment is "viral," the geometric expansion of attention as YouTube clips get linked from blogs, which get linked from more blogs, etc., until it's so famous that you can get a symphony orchestra to accompany a cat on the piano. Who, with anything to sell, wouldn't kill for that kind of fame?

What Viacom did (and it's surely a widespread practice) was not only post videos to YouTube, but go to great lengths to pretend that the clips were uploaded without authorization, or had even been stolen. They had third parties use untraceable email accounts, or reduced the quality to make it appear that they had been surreptitiously acquired, to disguise their advertising campaign as grassroots enthusiasm. Google charges that Viacom's smoke screen was so effective that they frequently lost track themselves, demanding their own clips be removed and later asking for reinstatement.

Google argues this as proof that they can't possibly keep track of authorized v. unauthorized uploads, if Viacom can't keep track of their own work. We'll see how that works out as a legal argument, but I'm more interested in the economic reality it indicates. As with radio play, free advertising benefits the bottom line far more than does trying to squeeze every last dime of performance royalties. At least, Viacom thinks so and they probably know their business.

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