06.23.10

Google vs. Viacom: Who Will Come Out on Top?

Viacom’s decision to sue Google’s YouTube over copyright infringement makes the once-hip media giant seem as though it’s lost its way. But the real winner will be decided at the appeal.

Forget the trial, let’s go straight to the appeal. That’s the takeaway from Wednesday’s court ruling in favor of Google against copyright infringement charges brought by Viacom.

More than three years ago, Sumner Redstone’s company sued Google’s YouTube for $1 billion in damages, claiming the video-sharing site knowingly let clips from Viacom-owned programs such as The Daily Show with Jon Stewart and The Colbert Report run, even though they were illegally posted. Google maintained that, while it was aware of copyrighted material being posted on YouTube, as long as it proactively sought to remove the infringing clips on their own or via the receipt of a takedown notice from the company, it was protected under the Digital Millennium Copyright Act. Both sides dug in their heels, viewing the outcome of the case as pivotal to the future of video content on the Web.

While media reports were quick to cast Google as the winner, the reality is that it has been a fait accompli from the beginning that any initial judgment in this case was going to be appealed.

That future now seems firmly in the hands of technology companies after U.S. District Court Judge Louis Stanton sided with Google. But that’s only if the judgment holds up. While media reports were quick to cast Google as the winner, the reality, as anyone familiar with the legal antagonism between media and technology companies is well aware, is that it has been a fait accompli from the beginning that any initial judgment in this case was going to be appealed. You can bet that if the judgment came down in favor of Viacom, Google would have been as quick to appeal as Redstone’s company. Indeed, all Wednesday’s decision did was save both companies the time and expense of going through a costly trial.

Calling the ruling “fundamentally flawed,” Viacom says it plans to appeal “as soon as possible.”

The ruling represents another blow to Viacom’s cool quotient. Once the arbiter of all things hip, Viacom lost its way in the Internet age as MySpace, Facebook, videogames, and even other cable networks rose up to grab the pop culture zeitgeist. Its decision to sue Google rather than strike a licensing deal like many of the other content companies made Viacom look like a Luddite, and further alienated its young, tech-savvy audience.

For its part, Google used the decision to galvanize consumer support.

“This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other,” the search company said in a statement. “We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world.”

The ruling is a symbolic, if not concrete, win for Google. Content companies already weary of Google viewed the $1.65 billion purchase of YouTube as overt antagonism. Moreover, despite its dominance, Google has been unable to develop a business model that capitalizes on YouTube’s massive audience.

But the ruling is just the undercard. The appeal, which should get underway in six to eight months, is the main event. That’s when the real winner will be decided.

Peter Lauria is senior correspondent covering business, media, and entertainment for The Daily Beast. He previously covered music, movies, television, cable, radio, and corporate media as a business reporter for The New York Post. His work has also appeared in Avenue, Blender, Black Men, and Media Magazine, and he’s appeared on CNBC, Bloomberg, BBC Radio, and Reuters TV.