Media Companies Blast YouTube for Anti-Piracy Policy

NEW YORK – The media industry is clashing with YouTube over its proposal to offer anti-piracy tools only to companies that have distribution deals with the top online video-sharing service, media insiders said.

YouTube, owned by Google Inc. (GOOG), plans to introduce technology to help media companies identify pirated videos uploaded by users. But the tools are currently being offered as part of broader negotiations on licensing deals, they said.

The move contrasts with YouTube's biggest rival, News Corp.'s (NWS), popular Internet social network, MySpace, which said on Monday it would offer its own version of copyright protection services for free.

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YouTube's "proposition that they will only protect copyrighted content if there's a business deal in place is unacceptable," a spokesman for Viacom Inc. (VIA), owner of MTV Networks and Comedy Central, said this week.

One media industry source likened YouTube's policy to a "mafia shakedown."

Earlier this month, Viacom demanded YouTube remove more than 100,000 Viacom video clips from the site after the two sides failed to reach a distribution agreement.

Viacom has become the poster child of dissent against YouTube, trying to prevent the site from turning into the Apple Inc. (AAPL) of online video.

Apple CEO Steve Jobs is credited with saving the music industry by simplifying the process of buying and playing digital music with the iTunes online store, but the company's chokehold on the industry is now resented by record companies.

In a prepared statement, YouTube said the process of identifying copyrighted material is not an automated process and required the cooperation of media company partners.

For instance, a clip of a TV show owned by one company might contain music produced by another, making the process of identifying ownership difficult.

"These matters are very complicated and we are working with our partners to identify and solve these problems," YouTube said in an e-mailed statement.

Indeed, even Viacom admits to the difficulties of locating copyrighted content. About 60 to 70 videos out of the 100,000 it demanded to be removed were not owned by Viacom.

NEGOTIATING TACTIC?

Despite the public vitriol between YouTube and the media industry, some industry experts dismiss the spats as little more than saber rattling ahead of eventual deals.

Media companies — torn over how best to court younger viewers who split their leisure time between watching TV, surfing the Internet and playing video games — are attempting to make their programming more widely available, especially on popular services such as YouTube.

"The debates are about negotiations more than anything else — who's going to pay whom and how much," said Saul Berman, IBM's (IBM) global media and entertainment strategy leader.

Some legal experts said YouTube has no obligation to invest heavily in leading-edge technology only to give it away.

"There's no reason for me to spend a lot of money on a ... solution and give it away for free," said Gregory Rutchik, founding partner of San Francisco-based piracy litigation firm The Arts & Technology Law Group.

Forrester Research analyst James McQuivey agreed, adding that media companies might feel they are being blackmailed into signing distribution deals with YouTube.

"If YouTube can sweeten the pot and come back with a better offer, I think the concerns of the blackmail naturally vanish," McQuivey said.

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