Lots of businesses give things away to get attention. But when you're giving away what isn't yours, you might not like the attention you get. That's what landed YouTube and Google in court at the pointy end of Viacom's lawsuit last week.
Like Napster and Grokster before it, YouTube is the creation of the young and ambitious who built their business on giving people something for nothing. Napster and Grokster made money by selling access to copyrighted songs without paying royalties. In theory, they were only selling connections to whatever their users were interested in swapping, but what made people sign up for these services was the prospect of getting popular music for free. The courts decided that a business model built on encouraging piracy of copyrighted work violates the law.
The same result awaits Google/YouTube. YouTube's founders conceived their site as a way to share personal videos. But they marketed it to financial backers and customers as a way to access much more. Viewers tune into clips of the latest TV shows, sports events and more - everything and anything you can think of, digitized and on the Internet. While there's demand for home movies, personal photos and the like, much of what makes the site a success is taken from the slick productions of Hollywood and New York. After all, which would you rather watch: your neighbor singing karaoke or a Beyonce` video? YouTube knows this material helps build traffic for its site.
Few people take the trouble to see that royalties are paid for copyrighted material they view or post on the Web. YouTube's defenders say that giving fans of the shows, films and talent access to copyrighted material could increase demand for those works and the creative talent in them. In other words, copyright owners like Viacom should be happy for the free publicity. But as the saying goes, nothing in life is free. If a YouTube contributor each week posts a clip of the moment on "American Idol" when a contestant is cut, millions of people might decide to skip the program (or even the official "Idol" Web site) and tune in to YouTube instead. Advertisers for "Idol" will have lost the audience they paid for, while YouTube makes money from the copyright infringement of one of its contributors.
Even where pirated material is posted, the law - as amended by the Digital Millennium Copyright Act - provides a safe harbor against copyright liability for Internet businesses that do nothing more than store material from others. But YouTube does more than that, and it adds advertisements to postings to make money from viewers - more than 70 million of them watching more than 100 million postings. That takes it outside the DMCA's safe harbor, which isn't available to those who knowingly profit from copyright violations. YouTube's approach got it $1.65 billion from Google, but with that comes responsibility for controlling the site.
Not only does the law make YouTube responsible, common sense does as well. YouTube adds about 100,000 postings a day. Unlike outsiders, YouTube knows what is being added. It already screens postings to filter out pornography and profanity and could filter for evident copyright violations at far less cost than copyright owners. The alternative to YouTube screening its own databases for new postings with obvious copyright violations is having millions of copyright holders patrolling all 100 million postings on YouTube (along with the millions more on other sites). While a huge, successful company like Viacom might be willing to absorb the cost of such an effort, smaller copyright owners would be hard-pressed - and none could do it as efficiently as YouTube itself. That is why the DMCA puts sites that actively promote and add to content, or that profit from showing copyrighted material, outside the safe-harbor rules.
Viacom's fight against Google/YouTube isn't one to prevent the growth of new media. Instead, the fight is to ensure that those who create the products that make media attractive, new and old alike, can secure the returns from their creations. The law rightly favors creators over takers - because without the creators, there wouldn't be much to take.
RONALD A. CASS is chairman of the Center for the Rule of Law, dean emeritus of Boston University School of Law and author of "The Rule of Law in America." He wrote this article for the Mercury News.