The Province reports that current courtroom adversaries YouTube and Viacom are about to become partners in the nascent online movie rental business.
YouTube has announced a movie rental partnership with Viacom subsidiary Paramount Pictures saying the platform would offer online rentals of nearly 500 Paramount films, including “Hugo” and “The Godfather”. Whilst terms of the deal have not been disclosed, it is even less clear why the two companies, whose parent companies have sparred in court for years, decided to put their differences aside for this licensing agreement. Except that maybe both sides see a good way to make some money from legitimate online content - and keep movie fans happy.
Viacom is currently seeking to overturn its defeat in its 2007 landmark $1 billion lawsuit in which the media conglomerate charged YouTube and parent company Google Inc with “massive” copyright infringement. Viacom said that it had found more than 150,000 unauthorized clips of its material on YouTube that had been viewed "an astounding 1.5 billion times". YouTube responded by stating that it "goes far beyond its legal obligations in assisting content owners to protect their works and U.S. federal Judge Louis L. Stanton agreed that Google was protected by provisions of the Digital Millennium Copyright Act. In 2008 a US court ruled in Lenz v. Universal Music Corp. that copyright holders cannot order the removal of an online file without first determining whether the posting reflected fair use of the material. The case involved Stephanie Lenz from Gallitzin, Pennsylvania, who had made a home video of her 13-month-old son dancing to Prince's song "Let's Go Crazy", and posted the 29-second video on YouTube
The Province tells us that YouTube, created in 2005 by three former PayPal executIves, is the world’s most popular online video website and streams 4 billion videos every day and its users upload more than 60 hours of video to the site every minute. Unregistered users can watch videos, while registered users can upload an unlimited number of videos. Videos considered to contain offensive content are available only to registered users at least 18 years old. In November 2006, YouTube, LLC was bought by Google for US$1.65 billion, and now operates as a subsidiary of Google. Although much of the content on YouTube consists of home videos that are free to watch, YouTube has increasingly added professionally-produced content, some of it available to rent for a fee.
The Paramount deal means that YouTube now has movie rental deals with five of the six major film studios, as well as more than ten independent film studios, giving it access to a catalog of nearly 9,000 films. Consumers can rent the films, generally for 24 hours or 48 hours, for anywhere from $2.99 to $3.99 in the USA and Canada.
More of this story here
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UPDATE: As I posted this artivle, we received news that the 2nd US Circuit Court of Appeals had reversed (Thursday 4th April) the June 2010 lower court ruling from Judge Louis Stanton in favour of YouTube, which resulted from the $1 billion lawsuit filed by Viacom, the English Premier (football) League and others in 2007 to stop the posting of clips from programmes like the Daily Show and SpongeBobSquarePants amongst 79,000 copyrighted works, giving YouTube DCMA protection.
A YouTube spokeswoman said in an e-mailed statement: "All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube. Nothing in this decision impacts the way YouTube is operating." Viacom, in a statement, said the appeals court "delivered a definitive, common sense message to YouTube: intentionally ignoring theft is not protected by the law."
http://www.csmonitor.com/Innovation/Latest-News-Wires/2012/0405/Appeals-court-reinstates-Viacom-lawsuit-against-Google-s-YouTube
A better idea might be to embed commercials in the movies and let people watch them for free. That approximates the traditional business model that television used for years.
The problem for the advertising paying for content production model is: Google and the like can deliver very precisely sorted audiences for advertisers (e.g people who google new car prices- delivered to people selling cars ) and Google and the like does not have to pay for content production ,google and the like has a significant competitive edge over traditional models like TV and newspapers supported by classified Ads
revenues.
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